question- terminated vested agent, company not paying agent renewals

CFP83

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In talking with an acquaintance in the business over this past weekend, he shared with me that a life insurance company that he did business with as a broker, and utilized their B/D as a independent RR, terminated his agents contract in 2016 for what they deemed "for cause". He stated that the company cited violations of company policy, in that his assistant on 3 different occasions received checks from clients for annuities and didn't mail them to the home office for 2-3 business days, another item cited was a violation of their social media policy. He stated that he was thinking about pursuing legal action against the life division of this company for not paying him his renewals in which we was vested.

Him not getting anything from the b/d standpoint is industry standard, however the life arm of this company not paying him renewals sounds off.......if he was vested he owns those renewals correct?
Not that this matters in terms of the life renewals, however he stated that FINRA looked into these remarks on this advisors U-4/U-5 by sending him a series of letters after his relationship was terminated with this insurance company B/D and took no action or sanctions.....seems like a "civil dispute" between this advisor and the company.
 
In talking with an acquaintance in the business over this past weekend, he shared with me that a life insurance company that he did business with as a broker, and utilized their B/D as a independent RR, terminated his agents contract in 2016 for what they deemed "for cause". He stated that the company cited violations of company policy, in that his assistant on 3 different occasions received checks from clients for annuities and didn't mail them to the home office for 2-3 business days, another item cited was a violation of their social media policy. He stated that he was thinking about pursuing legal action against the life division of this company for not paying him his renewals in which we was vested.

Him not getting anything from the b/d standpoint is industry standard, however the life arm of this company not paying him renewals sounds off.......if he was vested he owns those renewals correct?
Not that this matters in terms of the life renewals, however he stated that FINRA looked into these remarks on this advisors U-4/U-5 by sending him a series of letters after his relationship was terminated with this insurance company B/D and took no action or sanctions.....seems like a "civil dispute" between this advisor and the company.
Many, if not most, life contracts void the vesting provision if the termination is "for cause".
 
He stated that he was thinking about pursuing legal action against the life division of this company for not paying him his renewals in which we was vested.

Fortunately, Ohio (if that's where he's located) has a very long statute of limitations for breach of written contract lawsuits (8 years) so if he thinks his termination was bogus he needs to stop thinking about it and start doing something about it if there's enough money involved to make it worthwhile.
 
I highly recommend reading the RR contract and life contract again in full. Perhaps even run them past an attorney. There may have been a clause that allowed them to terminate the other for cause when one was terminated. So it is entirely possible they are following the contract. I would definitely start there.
 
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