American General New Chargeback Rule

SteveJH2

Expert
37
These guys are getting tougher. I wonder if this will be the new trend in the industry.

"American General has adopted new chargeback rules for term and UL business, effective January 1, 2013. Effective January 1, 2013, Term and UL products (except for EGI SVETR) will have the following chargeback rules added/changed as follows:


For the first six months (1-6), 100% chargeback will occur for surrenders and lapses
For the second six months (7-12), 50% chargeback will occur for surrenders and lapses
The EGI SVETR chargeback includes 100% in the first year on full surrenders"
 
I doubt itb will be a trend. As long as carriers view Agents as their real customers (and they do) then there will always be competition for Agent bus. If a carrier is primarily end customer direct, well then you see more of this. As long as "it's sold not, bought" remains the mantra of the carriers then Agents have little to fear.
 
These guys are getting tougher. I wonder if this will be the new trend in the industry.

"American General has adopted new chargeback rules for term and UL business, effective January 1, 2013. Effective January 1, 2013, Term and UL products (except for EGI SVETR) will have the following chargeback rules added/changed as follows:

For the first six months (1-6), 100% chargeback will occur for surrenders and lapses
For the second six months (7-12), 50% chargeback will occur for surrenders and lapses
The EGI SVETR chargeback includes 100% in the first year on full surrenders"

Interesting. This is very similar to what we had when I was captive with them. As a captive, it seemed like every time the company needed to improve their bottom line, agents' comp took a hit. My guess is that they've bottomed out on the captives' comp, so they're gonna take it from the indies now.
 
Having come from a more annuity background I am used to seeing clients pitching enough of a fit say 2 or 3 years into a contract and the carrier realizing its just easier for them to unwind the contract and chargeback commissions 3 years later as it doesn't cost them anything and they got free use of the money for 3 years.
 
Interesting. This is very similar to what we had when I was captive with them. As a captive, it seemed like every time the company needed to improve their bottom line, agents' comp took a hit. My guess is that they've bottomed out on the captives' comp, so they're gonna take it from the indies now.

I'm sure that is what is going on. They coupled this with a 10% comp cut across the board.
 
Interesting. This is very similar to what we had when I was captive with them. As a captive, it seemed like every time the company needed to improve their bottom line, agents' comp took a hit. My guess is that they've bottomed out on the captives' comp, so they're gonna take it from the indies now.

Yeah.. But they had the captives over the barrel.. They don't the independents...

Jim Mallon has assumed the helm of the American General Life Companies now that they have been merged together. .. He was the COO of ALGA.. Looks like he is going to try to try to base some aspects of the company on the AGLA captive model.
 
Yeah.. But they had the captives over the barrel.. They don't the independents...

Jim Mallon has assumed the helm of the American General Life Companies now that they have been merged together. .. He was the COO of ALGA.. Looks like he is going to try to try to base some aspects of the company on the AGLA captive model.

Well, if that doesn't work out, maybe AIG could just get another bailout!
 
Well, if that doesn't work out, maybe AIG could just get another bailout!

Oooh, very unfair allusion there.

I'm not here to defend American General, but the bailout had nothing to do with them or their financial fitness and everything to do with the parent company's (American International Group) extremely high exposure to risky credit based derivatives that put them on the hook for more money than they had available to pay.
 
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