National Marketing Companies – The 3rd Rail of Insurance

Many people are aware of brokers and insurance agents. They meet clients, explain possible coverage, and service existing customers. They also help people identify the insurance companies they are. You are buying coverage through an agent representing that company when you sign the dotted-line. There is an additional rail to the insurance system, and they are known as National Marketing Organizations (NMO’s).

National Marketing Organizations are also known as .

Field Marketing Organization (FMO).

Internal Marketing Organization (IMO).

National Marketing Organizations (or “middlemen”) are those who train and promote agents and brokers about insurance products. They recruit independent insurance agents and recommend insurance products to them. The NMO gets an over-ride in commissions if an agent writes business. They make more money the more agents they hire.

Independent Agents

NMO’s are independent agents that aren’t contracted with any insurance company. Think Allstate, Farmers and American National agents. Insurance brokers are sometimes referred to independent insurance agents. They can place business with any company that suits their client’s needs.

Less Expensive

Agents must contract with an NMO rather than directly with insurance carriers. Agents should be trained and supported by a third party to create competition among NMOs for the agent’s business. The insurance industry can pay less to market companies to train and service agents than to hire thousands of home-office workers who must service and market the same products. The insurance company doesn’t have to hire or fire employees based on fluctuations in business.

Time to sell

National Marketing Organizations are contracted with multiple insurance companies for annuities, life and disability insurance, as well as long-term care insurance. NMOs, such as the one I worked for, started by selling annuities in wholesaling and then added life insurance. To keep their contracts with insurance companies, NMOs must submit a minimum amount or production in order to make that insurance company available for sale to their agents.

Insurance Hierarchy

Insurance Company (s).




Insurance Company (s).


Broker Agent/ Insurance Agency


Agent Commissions

A broker dealer or an insurance agency may be located at the top of the commission hierarchy. Sometimes, the street commissions will take a cut or the agent will be assigned to a lower level of commission. The General Agent (GA), also known as a street commission level, is the highest agent level without receiving a portion from their NMO.

NMO Commissions

When an agent issues and pays out policies, marketing companies get an over-ride. According to their respective level, the agent and NMO receive direct payments from the insurance carrier. Agents and NMOs may be eligible for incentive trips, bonuses and deferred compensation plans. NMO’s can offer additional compensation to their top performers agents in the form of.25%-11% for their production. A NMO might do this for several reasons.

Nothing is better than something

It’s better to have a large producer in your organization than your competitors

A NMO can be helped by a big producer to achieve bonus levels with the insurance carriers

What to Look for When Choosing an NMO

* Training for salespeople (not Home Office People).

* Sales and marketing ideas

* Follow up on cases

* Technology

* Good Contracts

* Lead Systems (Most leads can be terrible)

Independent agents should ensure that the NMO gives you a waiver of any contract if you’re looking for another NMO. Before you sign a contract with them, make sure that this is done in writing.

You won’t believe how many times I have heard agents say they couldn’t move to my company because their NMO wouldn’t release them. An NMO will hold the contract for as long as possible. You will need to sell another company while you wait for the right one.

National Marketing Organizations (NMO) are essential for smooth movement of insurance transactions between clients and agents. NMO’s are essential for ensuring that business is placed quickly and that agents receive the right training about products to present to clients. NMO’s can be a real asset to the industry.