Fort Dearborn Exiting the Business

[insurehound]

Again, from Zenith Marketing. I hope I'm not re-posting something that has already been posted. Otherwise, I'll be sure to get one of those great sarcastic comments

Zenith Marketing Group has just received notice from Dearborn National (Fort Dearborn Life Insurance Company and Fort Dearborn Life Insurance Company of New York) that it will permanently exit the fixed and fixed indexed annuity marketplace effective at the close of business on Friday, July 23, 2010.​

Effective today, Zenith Marketing Group will not accept any annuity applications for Dearborn National.

Please be aware that Dearborn National has also announced that effective July 26, 2010, they will no longer pay commissions for additional premiums received for existing flexible premium contracts.

While it is difficult to have a carrier exit the annuity marketplace, fortunately this is a rare occurrence. We understand that you may have questions concerning your existing Dearborn National contractholders and what this may mean for them. Attached here is an FAQ sheet that Dearborn National has provided. Contact your Zenith Marketing Representative for more information.

 

[Norwayguy]

Please be aware that Dearborn National has also announced that effective July 26, 2010, they will no longer pay commissions for additional premiums received for existing flexible premium contracts.

I don't sell for them but isn't this great they have a contract with the consumer and must continue to take flexible premiums but they won't continue to pay comp....Great company. What stops a company from blocking annuity business like they do health and saying they won't pay comp on the older policies?

 

[insurehound]

Good point! That stinks! My question is why has a company that mainly sold fixed annuities, stopped selling what they are known for? Is this a reserve issue? Something they know that we don't know?
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...wait a minute, isn't there a contract between the agent and the company? People thought I was crazy for somehow suggesting that the we agents need to ban together for protection. When an insurance company can change the rules (unless it says in the contract otherwise), it's not a contract. A contract is something that two parties agree on and negotiate from both sides. Many said that the GAs would be there to help and protect the agent...and???

 

[Norwayguy]

Since I'm not contracted with them, I don't have a contract to read. But you make an interesting point what else do they sell?

 

[VolAgent]

I don't sell for them but isn't this great they have a contract with the consumer and must continue to take flexible premiums but they won't continue to pay comp....Great company. What stops a company from blocking annuity business like they do health and saying they won't pay comp on the older policies?

Not to quibble, but...

As I am sure you know, some companies do reserve the right to refuse future payments into an annuity contract. So, I'd say it is very shady to continue to accept premium deposits, but refuse to pay compensation on those deposits.

 

[Norwayguy]

Not to quibble, but...

As I am sure you know, some companies do reserve the right to refuse future payments into an annuity contract. So, I'd say it is very shady to continue to accept premium deposits, but refuse to pay compensation on those deposits.

No disagreement...The only question is, does anyone have a contract, I bet they have some sort of clause to let them out of paying the compensation.

Its too bad we can't tell the future so as to avoid these companies

 

[rjm63]

I have a contract with them...I will dig it out and see what it says....give me a few days.

I know back at the first of 2009 they stopped accepting new business for almost 5 months if memory serves .....said it was because they were swamped from the fall....which I always find hard to believe.

Now this....something is up.

 

[rjm63]

Found it!

There is a clause that they change or alter the contract at anytime to affect anythng in the contract and by signing you agree to it.

Still have not gotten the "inside" word on why they have stopped selling what they were best known for.

Soon as I hear....I'll post it.

 

[insurehound]

So it's not a contract if the Company can change any part of it at any time for any reason...this is why we need to start a Union of some sort

Usually, contracts are negotiable by all parties involved...

 

[arnguy]

So it's not a contract if the Company can change any part of it at any time for any reason...this is why we need to start a Union of some sort

Usually, contracts are negotiable by all parties involved...

It is still a contract. Under contract law such a contract is labeled a unilateral contract. In other words, one party holds all the aces as opposed to a bilateral contract.