Prouddad
Expert
- 59
I am the broker of record for a SPDA that was issued last week. It is funded by a 1035 rollover (approximately $340,000) from The Hartford Life Insurance Co. I submitted the application this year for my client’s policy with a guaranteed 3.4% interest rate for 10 years.
When The Hartford sent the rollover check to North American, it erroneously deducted $13,000+ surrender charge from the $340,000. The Hartford mistakenly believed that North American’s rollover request arrived after the no-surrender fee window expired. When The Hartford realized its error, it immediately sent the surrender fee to North American to complete the rollover.
North American’s New Business Dept. is now willing to issue only $327,000 of the $340,000 at the promised interest rate of 3.4%. A New Business Dept. Supervisor said to me that North American will pay my client 3.15% interest on the surrender charge refund that The Hartford sent to North American after what she calls the 45 day deadline to receive such funds.
North American's New Business Dept. won’t issue the entire annuity at the agreed upon rate because they're concerned about setting a “precedent.” Why can’t we set a precedent that values our clients and our commitments that we make to them?
I understand that The Hartford’s failure to accurately process my client's rollover request contributed to this problem. But is it morally and professionally right for me to tell my client that even though she complied with all of North American’s rules that it is unwilling to live up to what was promised to her?
If I tell my client that most of her money is earning 3.4% interest and the rest is earning 3.15%, it creates confusion, questions, complexity and a loss of credibility for both me and for North American. This also creates an income loss of between $450-$500 for my
client over the next 10 years.
I plan to also contact The Hartford and explain what happened. They are also responsible here since it was The Hartford that made the original error. Hopefully, The Hartford will make up the loss to my client.
Who in your opinion (if either carrier) should be held accountable to my client? I appreciate any feedback you can give me on this case and I welcome advice on how to get it resolved for my client.
Thanks.
When The Hartford sent the rollover check to North American, it erroneously deducted $13,000+ surrender charge from the $340,000. The Hartford mistakenly believed that North American’s rollover request arrived after the no-surrender fee window expired. When The Hartford realized its error, it immediately sent the surrender fee to North American to complete the rollover.
North American’s New Business Dept. is now willing to issue only $327,000 of the $340,000 at the promised interest rate of 3.4%. A New Business Dept. Supervisor said to me that North American will pay my client 3.15% interest on the surrender charge refund that The Hartford sent to North American after what she calls the 45 day deadline to receive such funds.
North American's New Business Dept. won’t issue the entire annuity at the agreed upon rate because they're concerned about setting a “precedent.” Why can’t we set a precedent that values our clients and our commitments that we make to them?
I understand that The Hartford’s failure to accurately process my client's rollover request contributed to this problem. But is it morally and professionally right for me to tell my client that even though she complied with all of North American’s rules that it is unwilling to live up to what was promised to her?
If I tell my client that most of her money is earning 3.4% interest and the rest is earning 3.15%, it creates confusion, questions, complexity and a loss of credibility for both me and for North American. This also creates an income loss of between $450-$500 for my
client over the next 10 years.
I plan to also contact The Hartford and explain what happened. They are also responsible here since it was The Hartford that made the original error. Hopefully, The Hartford will make up the loss to my client.
Who in your opinion (if either carrier) should be held accountable to my client? I appreciate any feedback you can give me on this case and I welcome advice on how to get it resolved for my client.
Thanks.
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