Chargeback for IUL Underperforming (Accordia)

Discussion in 'Indexed Universal Life Forum' started by Champion692G, May 2, 2017.

  1. Champion692G
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    Champion692G New Member

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    Hello Everyone,

    I am appointed with Accordia and have written several IULs with them over the last couple of years, going back to when they were Aviva. I was randomly checking my commissions one day and saw that I had a sizeable negative balance. I checked my book of business and saw that all of my clients were active and paying, no lapses or cancellations at all.

    I called the company and they told me that the chargebacks were because the policies didn't perform to what the illustration projected so they took back the difference in my commission between the projection and how the policy actually performed.

    My question is, has anyone else ever heard of this? Every person I have spoken with has never heard of any company doing this and is appalled that Accordia would. Also does any one know any recourse I have to combat this because having this balance is preventing me from getting any renewals because it all goes to paying down the balance.

    Thank You
     
  2. DHK
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    DHK Well-Known Member

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    I've never heard of this practice either.

    1) Was the performance difference actually credited to the policies?
    2) Was this more of a disincentive to not "over-promise" performance of IUL?
    3) Was this for recent policies or older policies before the new IUL illustration regs came into effect?
     
  3. Champion692G
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    Champion692G New Member

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    1) Yes
    2) No, this is what their software default illustrated.
    3) This practice went into effect when Aviva was bought by Global Atlantic and became Accordia.
     
  4. pfg1
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    pfg1 Well-Known Member

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    I've not heard of that. Not understanding how they could actually do that... an illustration is just an estimate of what the policy might do, based on a snapshot in time.
    The actual design of any perm policy is what drives the commission (target/excess for IUL, base/pua for WL). I'd be seriously questioning what they are doing, and NO WAY would I write another thing with them.

    The only experience I have is a client of mine has an Accordia (old Aviva) policy that I didn't write. He's 10yrs in and just broke even, with 5 more yrs of surrender charge. He's not happy with them, said he had to jump through a bunch of hoops to get an inforce illustration.
     
  5. VolAgent
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    VolAgent Well-Known Member

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    Any chance you kept your contract and all commission schedules you received? I don't see how they could do this without it being specified in the contract or commission schedule. If done retroactively, I don't see how it could be legal.

    That is definitely a company I would avoid at all costs.
     
  6. DHK
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    DHK Well-Known Member

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    I do remember that the Aviva IUL policies had a 3%(?) minimum interest guarantee. I do not recall there being a clause that it would be funded by the commissions of the selling agent, NOR that it is in the policy's failure to beat the ILLUSTRATION.

    I don't know about Accordia. I don't really like it when insurance companies change their names really frequently. It was AmerUs, then Aviva, and now Accordia/Athene - all within a 10-year period.
     
  7. scagnt83
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    scagnt83 Well-Known Member

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    Ive never heard of an IUL chargeback because of underperformance. Even if you dont have your agent contract and commissions schedule anymore, you can request it from them.


    However, certain IULs that have multiple commission options, can have chargebacks in the first 5 years for Withdrawals or Loans over 10% in a single year... at least for certain comp options.

    Always read the fine print on that commission schedule.
     
  8. Champion692G
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    Champion692G New Member

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    I couldn't find anything that supports what they are doing. Maybe someone else sees something I'm missing.
     

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  9. scagnt83
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    scagnt83 Well-Known Member

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    You need to look at the Commission Schedule. That is the document which usually spells out what can cause a Chargeback.

    There is nothing in what you posted that really tells you about Chargebacks. Other than just the fact that you agree to pay them back in a timely manner.

    However, it seems that Accordia charges agents 6.75% per year on any debt they have.... I wonder if any of my contracts have something like that in it?...
     
  10. jboussea
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    jboussea Well-Known Member

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    does the illustrated rate affect the target premium?
     

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