Such arrangements can be transparent to the distributing company's agents and treated much like any other reinsurance agreement. This is usually the case when Indianapolis Life manufactures survivor whole life. However, when Indianapolis Life marketed a disability income product developed by Portland, Me.-based UNUM Life Insurance Co. of America, a UNUM representative attended many of the agency meetings. Indianapolis Life also has helped to promote the term products it manufactures. Depending on the terms of the arrangement, capital also may be supplied by the manufacturer and profits may be shared.
Agents can be very interested in private labeling and sponsored brokerage arrangements.
They allow their companies to react very quickly and inexpensively to new product development needs. They also provide agents with cost-competitive products. This is especially the case when very high sales volumes are required to support the product or when the market is changing rapidly and new products are constantly in demand. There are many examples in the marketplace these days of two organizations forming a jointly-owned subsidiary company. The subsidiary would receive capital from both of its parents, which also might supply some of the needed functional expertise.