Chargebacks and Advances-

[TPAAgent]

Been writing for over a decade- mainly MP from 1999-2006- Lapses were very few, if any at all- The Senior market seems to have the highest rate of lapses, and rightfully so- one would assume that with fixed incomes etc-

I had a nice set of agents working the Health sector back in 2007- decided to get out of that with the responsibility of the agents lapse- Do have a couple FE agents making a small 5% clip-

Had a lapse on one of the agents and he asked me about his chargeback and really, just didnt have an answer for him- When my chargebacks come through my pending business usually clears up my debt- So I just let it roll-

Anybody here got the skinny on how companies chargeback? I'm kinda curious if its a standard practice or if each company treats them differently..

For ease and simplicity

Lets assume an example

75% advance @ 100%

Jan 1 2013... sold a $100 monthly premium

Advance would be = $900 -

Client NSF's on Junes pmt and policy lapses somewhere in July-

5 months were collected - (or $500)

What would the chargeback be?

900-500 or ($400?)

Anybody got the skinny on how some of the top companies chargeback?

Mon, Foresters, AA, UHL, Americo etc?

 

[PaperHanger]

If the policy goes belly up, they take back all 'unearned' commish.
The company collected $500, so you earned $500 with that 100% contract. You don't have to pay that back.
Everything else that was advanced is 'unearned' and has to be paid back.

Companies may differ as to how long after the NSF they will cause the chargeback....but none of the companies are going to let you keep 'unearned' commish (as far as I know).

You have the right idea....but the companies probably won't differ.
The specific 'How' is they deduct it from your *next* commission. If there isn't a *next* commission, they send you a bill, and if you don't pay that, they report you to Vector, which is a little like SPECTRE, which will in turn extort,er, collect the money from you.

 

[jdeasy]

Been writing for over a decade- mainly MP from 1999-2006- Lapses were very few, if any at all- The Senior market seems to have the highest rate of lapses, and rightfully so- one would assume that with fixed incomes etc-

I had a nice set of agents working the Health sector back in 2007- decided to get out of that with the responsibility of the agents lapse- Do have a couple FE agents making a small 5% clip-

Had a lapse on one of the agents and he asked me about his chargeback and really, just didnt have an answer for him- When my chargebacks come through my pending business usually clears up my debt- So I just let it roll-

Anybody here got the skinny on how companies chargeback? I'm kinda curious if its a standard practice or if each company treats them differently..

For ease and simplicity

Lets assume an example

75% advance @ 100%

Jan 1 2013... sold a $100 monthly premium

Advance would be = $900 -

Client NSF's on Junes pmt and policy lapses somewhere in July-

5 months were collected - (or $500)

What would the chargeback be?

900-500 or ($400?)

Anybody got the skinny on how some of the top companies chargeback?

Mon, Foresters, AA, UHL, Americo etc?

In the case you cited $400 chargeback would be how it is with most companies. Some have some squirrelly rules and not in the agent's favor. For quite a long time Foresters had a rule that they charged back 100% for all lapses in the first six months. They only changed that about the time they came out with PlanRight.

In MP, OM/F&G had a similar rule but it was for 3 months instead of 6.

You would have to check with each company to know for sure and then keep up with when they change it.

 

[Agentguy5]

Last year ING had a nice mortgage protection product that we were writing.. When the client canceled or the policy lapsed, you would get a letter from ING asking for Immediate Reimbursement.. They no longer have that policy BTW! This was the first I ever heard of such a thing... Our backend would have been wayy more than enough to take care of the debt...