Golden Rule/UHC 30 Day Wait, New Biz

[Crabcake Johnny]

Yay another nail in the golden rule coffin. Not to mention there is a good change of massive charge-backs with them come the end of this year. Those bastards keep twisting the knife.

Can you explain?

 

[jayrayl]

Can you explain?

A few months ago Golden Rule made a contract amendment that gives them the option to retroactively decrease commissions on all of their policies that are effective 3/23/10 or after. Essentially if commissions end up being effected by the new insurance regulations you commission (even commissions they have already paid you) can drop from 20% to as low as 5%. Now I don't expect it to be quite that extreme but from the way things are looking you can expect to at least have some drop. As soon as that drop happens they will give you a charge back for the difference on anything they paid for policies effective after 3/23.

Basically if you are writing Golden Rule right now you have to be careful because there is a good change you are going to have to pay a lot of it back.

 

[Crabcake Johnny]

I think maybe you're misreading it. GR has stated that all policies will earn 20% throughout the remainder of the year. However, those same policies are subject to the new comp structures after Jan 1st 2011.

Allow me to illustrate. Write a GR deal with a September 1st effective date and you're paid 20% September through December. That 20% is guaranteed and will not be charged back.

However, assume comp drops to 10%. That same deal will only earn 10% from January through August of 2011. So, 20% for 4 months and 10% for 8 months.

Currently GR is only offering advances to their key brokers for 6 months and come October it's 3 months. Why? Because GR will not advance key brokers past Jan. 2011. There is no chargeback liability.