- 8,707
So the simple matter is that I screwed up. I submitted an application for an annuity with a current client and with this annuity I submitted 2 policies for contract exchange. I am aware that this carrier like many carriers will decline a transfer if the client suffers a loss not recouped by a bonus on the product.
What I wasn't thinking of is the logic I used with my client would not work with the carrier. Both of these transfers where coming from the same company Great American. The transfers where of 2 totally different sizes. I forget the specifics but 1 was in the multiple of 10s thousands and the other was $1500. If you guessed my problem came up with the little itty bitty $1500 transfer you are right. Now I knew this policy would lose money with this transfer but as I looked at it the overall bonus between the two transfers would make up for the loss. The carrier didn't care they look at the transfers individually and this policy would suffer a loss. I explained that this was a 2 tier annuity and the client would never have the surrender charge equal the annuity value and that the only way to get out of the policy without a surrender charge was to annuitize the policy for a minimum of 7 years and that Great American will NOT annuitize a policy under $2000 in value and that by the time the policy was worth the 2K the client would reach required minimum distributions. I asked if the client could submit a letter of instruction acknowledging the surrender charge and that she still wished to proceed as that had worked with other carriers.
I know I screwed up because had I realized this was an issue I would have waited for the policy to issue on the first transfer and then submitted the transfer form with a second replacement form as this carrier only does suitability on the initial issue of the policy. They also stated that if I submitted the transfer again that the notes contained about the Great American money would get it declined.
So here is my solution and might be helpful for other agents out there when company policies are too rigid to meet the clients objectives.
I am appointed with Union Central. I noticed on the Union Central workbench they have a bank Accacia Federal Savings (I probably spelled it wrong) I called and I am able to open accounts for savings, IRAs, Checking accounts, CDs etc...Most of these accounts are non commissionable however they will provide me with the account numbers created.
If you guessed I rolled over the money to the Bank IRA savings account and as soon as the money hit I submitted transfer paperwork to the insurance carrier to rollover the account into the existing annuity.
For agents that have been accused of systematically rolling over business from a carrier violating a contract provision that is in many of our contracts I want to point out that Annuity to Bank Account and then Bank account to New Annuity does not require a replacement form.
Just a tip.
What I wasn't thinking of is the logic I used with my client would not work with the carrier. Both of these transfers where coming from the same company Great American. The transfers where of 2 totally different sizes. I forget the specifics but 1 was in the multiple of 10s thousands and the other was $1500. If you guessed my problem came up with the little itty bitty $1500 transfer you are right. Now I knew this policy would lose money with this transfer but as I looked at it the overall bonus between the two transfers would make up for the loss. The carrier didn't care they look at the transfers individually and this policy would suffer a loss. I explained that this was a 2 tier annuity and the client would never have the surrender charge equal the annuity value and that the only way to get out of the policy without a surrender charge was to annuitize the policy for a minimum of 7 years and that Great American will NOT annuitize a policy under $2000 in value and that by the time the policy was worth the 2K the client would reach required minimum distributions. I asked if the client could submit a letter of instruction acknowledging the surrender charge and that she still wished to proceed as that had worked with other carriers.
I know I screwed up because had I realized this was an issue I would have waited for the policy to issue on the first transfer and then submitted the transfer form with a second replacement form as this carrier only does suitability on the initial issue of the policy. They also stated that if I submitted the transfer again that the notes contained about the Great American money would get it declined.
So here is my solution and might be helpful for other agents out there when company policies are too rigid to meet the clients objectives.
I am appointed with Union Central. I noticed on the Union Central workbench they have a bank Accacia Federal Savings (I probably spelled it wrong) I called and I am able to open accounts for savings, IRAs, Checking accounts, CDs etc...Most of these accounts are non commissionable however they will provide me with the account numbers created.
If you guessed I rolled over the money to the Bank IRA savings account and as soon as the money hit I submitted transfer paperwork to the insurance carrier to rollover the account into the existing annuity.
For agents that have been accused of systematically rolling over business from a carrier violating a contract provision that is in many of our contracts I want to point out that Annuity to Bank Account and then Bank account to New Annuity does not require a replacement form.
Just a tip.
