Business sustainability in the career of an agent.

The insurance industry is an activity based on identifying, assessing, estimating and reducing risk. We analyze the client’s needs, indicate the areas to be secured, finally on the tray, providing appropriate solutions. What about our risk? Only about us agents?
Is the family, employees, employees and customers risking with us?

Most insurance agents run a business in the form of a sole proprietorship, acting alone or cooperating with the OFWCA. JDG is the most frequently chosen form of running a business by entrepreneurs. According to the data of the Central Register and Information on Economic Activity for 2022, the number of registered entities in CEIDG exceeds 2.5 million. This constitutes nearly half of all companies registered in Poland.
The time spent on its registration and the ease and availability of this process, financial outlays, simplified accounting are advantages in its favor. It is also a convenient form for a novice entrepreneur. It allows you to test yourself in the insurance industry. It can be a springboard for the development of the company.

Where is the risk?

The activity does not have a legal personality separate from the entrepreneur. The total risk resulting from ignorance of the law, professional mistakes or financial problems of the entrepreneur translates into the company. Her property is also the property of the owner. Thus, his entire family will be responsible for the activities of one person. Creditors can satisfy themselves from material goods that are part of the marital property community.

The contracts concluded include the owner of the DG. NIP and REGON are assigned to a specific natural person. Therefore, it is unequivocal that in the event of his death, the subject will be deleted from the CEIDG database.

Can an entrepreneur remedy this or at least minimize the probability of financial liability in connection with the conducted activity? Of course. improving qualifications, following procedures, powers of attorney, using the help of specialists, having a third party liability insurance policy, the most important thing – changing the form of business.

What about the durability of JDG’s existence?

The death of an entrepreneur or spouse in a situation where the company is a component of marital commonality causes many problems. The main thing is the inability to continue this activity. What about customers and their protection? with long-term contracts, e.g. group policies that generate high commission each month? The spouse and children may remain destitute if the agent or his legal heirs do not take care of it in time.

Let’s take a look at large agencies and multiagencies not only in terms of goods, but also cooperating people. What will happen to the OFWCA, can they be calm about their business, earnings?

As soon as the entrepreneur – the agent – ceases to function, the entire enterprise ceases to function. Power of attorney granted by the insurance company ceases to function. The OFWCA will not be able to conclude new contracts. Their financial liquidity is questionable.

How to secure the future of your business?

The first solution is to change the form of business activity from JDG to sp.z o.o. By changing the legal form of the conducted activity to the Company, we establish an entity with legal personality, operating on the basis of its own NIP and REGON. The company is responsible for the company’s obligations, and the death of one of the shareholders does not entail the loss of legal personality – the company still exists and functions.

The second solution will be the succession board. Like a lifebuoy, the legislator introduced the act on succession management to the enterprise of a natural person into the legal order in force. convenient, but demanding conditions allowing for the continuation of activities after the deceased. Conducted as a “inheritance enterprise” may function on the basis of previous administrative decisions, the concluded contracts do not expire, and there is no threat of financial liquidity.

In the Insurance Distribution Act, we also find regulations regarding the succession manager. Briefly, the succession manager who replaces the deceased insurance agent does not have to be an agent, and if he concludes contracts, only with the help of natural persons who are authorized.

The succession manager may be appointed by the entrepreneur himself, by adding an entry in CEIDG, the consent of the indicated one is sufficient or, in the absence of an entry, the legal heirs / debt collectors shall make the selection within two months from the entrepreneur’s death.

separation of property

Marital joint property at the time of establishing DG is another element that should be taken into account in the event of the entrepreneur’s death, but not only his. The death of a spouse who was not professionally related to the company may also be problematic. Remember that the joint ownership of JDG is part of the inheritance from the agent’s spouse.

The children of the deceased are in the first place to be appointed in accordance with statutory inheritance. Therefore, it may happen that a legal guardian will act on behalf of the minor child of the deceased spouse (from the previous relationship). Completely out of business with the company. Therefore, it is worth considering the separation of property.

A testament with a debt collection record

The greater the fortune, the various obligations, the more difficult the probability of easy, conflict-free closure of “JDG in inheritance”. A conscious entrepreneur, in order to avoid unnecessary conflicts in the family, can pass the DG to a committed, competent person who may continue the work of the deceased in a new company.

The solution is to write a notarial will with an indication of the debt collection legatee (spouse or other person). At the time of death, the debt collector becomes the owner of tangible and intangible components intended for running DG, e.g. movable property, real estate, accounting documents, etc. He enters the rights and obligations under civil law contracts. Debt collection is not part of the estate.

Most entrepreneurs did not wonder how many people indirectly influence the operation of “his” company. It is worth rethinking this issue and securing the future and continuity of activities. As you can see, there are many risks. Let us use the possibility of securing the future of our relatives, colleagues and customers. It is an important element of awareness and property management. 

Jadwiga Reszelewska
Training and Development Manager eofwca.pl