Vector One Report From AIL

[LifeATX]

So I have been reading this forum since I started my career in Life Insurance 6 months ago and finally I am doing a post.

I started working for American Income Life Insurance Company which I don't regret as I learned a lot about the industry. What I also learned is that I don't want to be a captive agent especially for a company like them. So I decided to leave AIL for greener pastures. As I was wrapping things up with my clients through them, I was getting appointed through the companies with my new IMO. They saw that I got new appointments and terminated me.

All was fine as I was just waiting for one more policy to go through. Then, about a month later I received a letter from AIL stating that I owed them thousands of dollars for my 5 months of working for them and that I was reported to Vector One. After several emails (so I had documentation of the conversations), the representative claimed that because I no longer work there and did not qualify to earn "future commissions" I had to pay back the balance.

If I had written bad policies, I would have no problem paying back the commissions. However, most of my policies are still in force. If you know anything about AIL, they pay low commissions (40%-55% of the Annualized Premium) and only advance you 65% upfront and the remaining 35% goes into a "bucket" to cover policy cancels and such.

I was told that the thousands of dollars I have to pay back is even for active policies as I am no longer able to earn commissions. So those policies I received 65% of my commissions, I will not get the 35% put towards the money they say I owe them even if the policy is in force after one year because I cannot "earn" those commissions since I do not work for them anymore.

ALSO, lets say I wrote a policy 2 weeks before I left AIL and was advanced my 65% of the commission for the first years premium, I had to pay back all the commissions minus the 2 weeks I "earned" while I was working there.

Is this legal? Is this standard for companies that hire captive agents? I was looking through the contract to see if it stated anything in there and I did not see anything. I knew that I would not be eligible for renewals on the policies because I was not "vested". I am fine with not receiving renewals but commission I earned should still be paid to me and all I want is to not have a negative balance with them so to have my "bucket" be used to pay what they claim I owe them.

As far as Vector One, the representative gave me an address for them in Scottsdale, AZ if I wanted to dispute their claim. Can you inform me of the best way to dispute this claim? Do companies I am contracted with or want to in the future look at the claim and disputes on Vector One to make a decision or if there is a claim that is unpaid no matter what they will deny my contract?

I hope you all can help with this situation. I promise now that I have signed up for this forum I will participate and not just read LOL

 

[PaperHanger]

When I left AIL, it wasn't to go indy at that time...but I do know that being there less than 1 year, I did not receive the remainder of my 'bucket' or any other checks at all from the good policies I had on the books.
I believe if I'd been there 1 year, you were 'vested' to get the backend and 1 year of renewals.

Your backend bucket should pay off your advance account...

I was my understanding at the time that the upline would get my renewals...but I would certainly assume that would come after your own debt was re-paid.

 

[Norwayguy]

To answer your question this is not standard...However there are some companies that have a clause concerning vesting in their contract and their stance is since you are not vested then you don't recieve anything for future premium payments even during the policies first year turning any balance still outstanding on a policy advance into a debt that is owed. I would make an appointment with an attorney to review your contract and you might find he says the same thing I am saying. You might need to consider this a life lesson and make arrangement for a payment plan back to AIL.

 

[PaperHanger]

If that's the case, it's pretty messed up..."you don't want to work for us?...well then you ain't gonna sell insurance for nobody".....

I'd heard AIL had cleaned up their act since I'd been there years ago...hoping this gets worked out w/o you having to give them back your money....if you didn't "earn" those commissions, then who did?

"You didn't build that!"
Image:

 

[Josh]

This whole situation seems a little odd. When I left AIL they didn't ask for any type of a payback on anything. I did write a lot of good business, but it sounds like something goofy that office is doing vs standard AIL operating procedure. Either that, or maybe there are some other pieces of the puzzle missing.

 

[magagent]

Keep in mind the SGA or MGA (if its a satellite office), can basically run the office anyway they wish.

This whole situation seems a little odd. When I left AIL they didn't ask for any type of a payback on anything. I did write a lot of good business, but it sounds like something goofy that office is doing vs standard AIL operating procedure. Either that, or maybe there are some other pieces of the puzzle missing.

 

[WinoBlues]

If as stated, that sounds bad. You very well may need to pay the unearned comp back.

However, In my opinion they then become your clients to do with as you please. They can not have it both ways. Yeah, yeah yeah, I know, the contract. I hope you kept your records off site.
American Income is very easy to rewrite.

 

[cds251]

I have heard this scenario a number of time in the last 12 months of agents leaving AIL.

They basically charge you back all of the advanced commissions and since you are not vested from day one, future commissions belong to the company.

You only get the benefit of the future commissions if you stay with them.....sucks, but I'm sure AIL/Torchmark has this set up as tight as possible in their favor........

 

[VolAgent]

I didn't bother to read the OP's post, but I agree with Wino. Either I get the comp or I get the client. They charge back even on the premium that is paid, I'd flip them in a minute if I could.

 

[LifeATX]

I have read over my contract again. I wonder if it is because I was "terminated" because I did not provide written notice 30 days prior to being appointed with other companies and so that violated my contract. Was anyone else "terminated" from AIL?

Here is what the contract states about commissions:

"Commissions are determined by the schedule in effect at the time the insurance is issued. There are no commissions on premiums that are waived, or on extra premiums for hazards or physical conditions. Commissions will be paid on premiums received by the Company on business produced by the Agent, less any premiums returned to the insured for any reason. Recognizing that the Agent’s profit or loss is solely dependent upon Agent’s degree or skill and effort, these commissions are to be in full satisfaction of all claims upon the Company
account of services or expenses under this contract. At the option of the Company, payment of commissions will be held in abeyance for 180 days after contract to determine the existence of any sums due the Company, which are to be recouped from commissions.

The right to receive vested renewal commissions, if any, shall immediately terminate without notice if:
1. This contract is terminated for cause or any violations of any of the provisions or agreements of this contract.
2. In any calendar year following termination the amount of such vested renewal commissions paid under this contract is less than
$150 per calendar quarter.

At the option of the Company, payment of commissions may be held in abeyance for 180 days after termination to determine the existence of any sums owed the Company, which sums are to be recouped from commissions.

This contract has the standard commission schedule (AGSTD) unless otherwise indicated. Commissions earned after termination shall be credited in accordance with the union contract with OPEIU Local 277."

I don't see anything about commissions I "earned" not being put towards what I "owe". In fact, it states that my commissions will be held to pay back my debt. I just wonder about the last part under the union contract. Time to contact OPEIU Local 277...