BCBS Commissions on Rate Increases?

[TopHat]

Does BCBS of NC pay commissions on the original premium forever, or does the commission rate still apply fully after the premiums increase? I've seen evidence of the former, in which case it appears the agents I work with are not being paid their due.

 

[goillini52]

Does BCBS of NC pay commissions on the original premium forever, or does the commission rate still apply fully after the premiums increase? I've seen evidence of the former, in which case it appears the agents I work with are not being paid their due.

I don't know of any company that pays commissions on premium increases...only on original premium. The last time I saw a company pay on the increases was 20 years ago.

 

[TopHat]

I don't know of any company that pays commissions on premium increases...only on original premium. The last time I saw a company pay on the increases was 20 years ago.

Thanks for the quick reply, goillini52. I was surprised that even the agents I work with did not know the answer to this. I've been doing accounting for independent agents (commission splits) since 2010, but this is the first time this issue has come up. I appreciate the info.

 

[moonlightandmargaritas]

I don't know of any company that pays commissions on premium increases...only on original premium.

While in the minority, there are carriers that pay comp on premium increases.

 

[goillini52]

While in the minority, there are carriers that pay comp on premium increases.

Any in the senior market? Which ones?

 

[mcando]

Not the ones in IL. So far... let's see in Jan 2014

 

[dgoldenz]

Anthem in VA pays on premium increases...

 

[TxOnline]

That's why many agents work their book-of-business every year.
They churn em over and over....for that 1st-year comm. on a higher premium.
Not that smart if you think about it....unless client got a terrible rate increase.
But, I guess it's a warm market to keep them busy.

The insurance companies who want to retain customers AND have stable rates over-the-years tend to pay on client's CURRENT premiums (in my experience).

 

[goillini52]

That's why many agents work their book-of-business every year.
They churn em over and over....for that 1st-year comm. on a higher premium.
Not that smart if you think about it....unless client got a terrible rate increase.
But, I guess it's a warm market to keep them busy.

The insurance companies who want to retain customers AND have stable rates over-the-years tend to pay on client's CURRENT premiums (in my experience).

You get 1st year commissions for 6 years, so unless there's a big premium increase....you only need to churn em every 6 years.
I assume you're talking Med Supps.

 

[russelltw]

With under 65, your commissions are generally front loaded, meaning there is incentive to continue to write business. I know of some who move business to earn the 1st year commission again. I can see that if it's good for the client. In the over 65 market, my experience is that you will likely move a med sup client every 3-4 years. It's a win/win situation for the client and the broker. Even though payout is level for 6 years, you better be paying close attention to your clients rate increases...you can bet they are. You can also bet they are getting calls/emails/letters...