Paying for Referrals - Compliance Question

[DHK]

From What i know you can pay for the referall - but not the sale. [As in every referal, not just the ones that land sales.] Unless the referrer folks have the correct license and I would not dare do it unless they have their own E&O. This might be called a commission split. If you are doing commission splits you may want to review your agency contracting. If the commission split or the consumer are cross state lines, all of this needs to doubled: Licensing, and E&O.

A true commission spit is done on the application itself.

While you can do 1099 commission splits (obviously between like-licensed individuals), everything else is subject to interpretation.

As an example, if you have a staff person and you pay them a bonus based on your production, that's a bonus (that you paid out of your earnings), not a commission split, (unless you put them on the app itself).

Other than an app split or a 1099 commission split... everything else is marketing expense.

 

[marindependent]

A true commission spit is done on the application itself.

While you can do 1099 commission splits (obviously between like-licensed individuals), everything else is subject to interpretation.

As an example, if you have a staff person and you pay them a bonus based on your production, that's a bonus (that you paid out of your earnings), not a commission split, (unless you put them on the app itself).

Other than an app split or a 1099 commission split... everything else is marketing expense.

Frankly I think we are both assuming that we "know the line of business here" and I do not see any evidence of this. What you state is probably more true in Life Applications, but in the P&C world, it can be the dirtiest of interpretations.

For all we know this question involves Travel Insurance in Puerto Rico. As always with these questions its helpful to know the state and the type of insurance involved, otherwise we are just all speaking in generalizations.

 

[DHK]

It's in the life insurance subforum... so yeah. I'm making that assumption.

 

[jdeasy]

I give a gift card to restaurants for referrals. Not contingent on a sale but I can't remember the last time a referral wasn't a sale.

Only problem I've had is using Boston Market. For some reason people can't use Boston Market cards.

 

[rousemark]

I give a gift card to restaurants for referrals. Not contingent on a sale but I can't remember the last time a referral wasn't a sale.

Only problem I've had is using Boston Market. For some reason people can't use Boston Market cards.

Dollar General will occasionally have gift cards on sale for 15 -20% off. They had them 15% off last Friday. We bought several for Cracker Barrell, Chilis, Applebees and Waffle House. (The Waffle House was for me)

 

[jdeasy]

Dollar General will occasionally have gift cards on sale for 15 -20% off. They had them 15% off last Friday. We bought several for Cracker Barrell, Chilis, Applebees and Waffle House. (The Waffle House was for me)

People love the restaurant gift cards. Golden Corral is a favorite that's asked for.

But yes, Dollar Store is king here. When I do seminars you gotta have door prizes. Or you will never be invited back.

I used to use Walmart. And that's still good. But those Dollar Store gift cards go over like soft shoes on old people!!

 

[rousemark]

People love the restaurant gift cards. Golden Corral is a favorite that's asked for.

But yes, Dollar Store is king here. When I do seminars you gotta have door prizes. Or you will never be invited back.

I used to use Walmart. And that's still good. But those Dollar Store gift cards go over like soft shoes on old people!!

You continue to amaze me.. I thought all you did was run leads F2F and then I found out that you do some phone sales. And, now I learn you do seminars..

 

[Allen Trent]

like soft shoes on old people!!

Big Mike is down on his luck these days & could use your support. Maybe you could buy your clients these as presents:. Women's Moccasin MySlippers

 

[jdeasy]

You continue to amaze me.. I thought all you did was run leads F2F and then I found out that you do some phone sales. And, now I learn you do seminars..

It's not news. I've talked about those things for years. There was even a thread here many years ago about how approach seminars. I said then that I just do my normal presentation, (how much, what kind, who from, when), in a group setting. I've always enjoyed the seminars. Just never did a lot of them. And haven't for a while now. At least 2 years because of Covid restrictions.

As for phone sales, talked about that many times too. I don't much FE phone sales but I have done some from the time I've been in FE. Before being FE focused I did quite a bit of phone sales. Some medicare but mostly term. Like 99% term. Worked with Dayne Vickers and used his system. Ben so long I might even be spelling his name wrong? Been at least since 2008 since I got leads to sell term by phone.