Can Anyone Explain Advance Commissions?

[moonlightandmargaritas]

Who were you working with?

AHCP

Oops.

 

[jdeasy]

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)

This is what happened to me and it sounds like what you are going thru;

I was with NAA when they brought Life Investers on board. I didn't write a lot of LI, but, I did about $4000 ap with them on a 75% advance. All my policies were on the books when LI and NAA parted ways just a few months after joining up. LI sent me a notice that I owed them back about $2000 on the unearned advances even though all of them were still on the books. They said they would pay me for all policies that stayed on the books, but, only "as earned". In other words, I was to send them back the $2000 and then they would give it back to me as policy holders paid their premiums. If the policies stayed on the books, I would get all the money back plus the other 25% that I had not been advanced.

I was able to negotiate with them to allow my debit to be paid down and I didn't have to send them a check. They were within their right to demand payment and barring that negotiations, I would have had to pay up. Other agents were not able to negotiate with them and had to cut a check.

This may not be what is happening in your case, but, it sounds the same.