I was an agent with an independent marketing group that "advanced" their commissions. I was told that once a policy met the "earned" period, that the interest stopped accruing. I was just notified that I owed money to them with one of the carriers I did business with while with them. I only earned about $3000 with them the whole time, and somehow I owe them about $1400. It's been almost 2 years since I wrote a policy with them, and last time I checked, most of my policies were still on the book even after a year or more. Also, any chargebacks that I had were debited against any new advances, which I would have thought would have sort of voided out any new obligations in terms of interest owed. For instance, if I owed them after a chargeback $350 and I sold a new policy that paid $500, I would be paid $150 and any interest would be on that $150. What they told me is that any advance given, regardless, would not stop accruing interest. So, even if I had 100% persistency rate, I'd always be in debt. Has anyone ever heard of this? Do I have any legal grounds to see if this debt is legitimate? (none of their statements show the math of all this)
Can Anyone Explain Advance Commissions?
- Thread starter jmarkk1
- Start date
ScottHCO
Expert
- 79
Who were you working with?
- 7,790
Not I!
- Thread starter
- #4
- 7,790
Short answer: Advance commissions are the opposite of as earned commissions!
- 1,802
A loan of sorts.
My guess.... they figured the balance due as of the day you left. You did not earn any of the commissions after you walked out the door, therefore, you didn't earn down the balance.
Legal? Depends on the contract. Ethical? Hmm, depends which side of the fence you sit on, most would probably say not. The other side is that once you left, someone had to take over those policies and service them. They deserved to get compensated for this. (at least, thats what I've been told).
I would carefully read the contract. It probably discusses how advances are dealt with on termination.
Dan
Legal? Depends on the contract. Ethical? Hmm, depends which side of the fence you sit on, most would probably say not. The other side is that once you left, someone had to take over those policies and service them. They deserved to get compensated for this. (at least, thats what I've been told).
I would carefully read the contract. It probably discusses how advances are dealt with on termination.
Dan
- Thread starter
- #8
G
Guest
Guest
Ahh, going forward then, "advance commissions" could then be considered commissions that have not yet been earned in advance of selling a policy. 
- Thread starter
- #10
When I stopped producing.....I only had 1 policy that had terminated, while the rest stayed on the books for year if not longer....plus, the chargebacks that happened prior to leaving were paid off with new business that continued to stay on the books....
It's not like I left and had all of my policies cancel immediately. Plus, it's not like I shattered any sales records and sold a ton of policies. I'm just lost as to how the math works that has produced this debit balance that I owe.
It's not like I left and had all of my policies cancel immediately. Plus, it's not like I shattered any sales records and sold a ton of policies. I'm just lost as to how the math works that has produced this debit balance that I owe.
