Scroll down for a discussion on Assurant Chargebacks within the Individual Health Insurance Forum.
I was wondering if anyone else had run into charge-backs with Assurant health insurance sales. Apparently they have this practice that if the business does ...
I was wondering if anyone else had run into charge-backs with Assurant health insurance sales. Apparently they have this practice that if the business does not stay on the books for FOUR MONTHS, then they charge-back all commissions for that policy. Of course, they keep the premium.
This is certainly not an ethical practice toward the agents and probably should not even be legal.
Anyone here had any experience with this?
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A.M. Hyers
Hyers and Associates, Inc.
That policy is clearly stated in their agent agreement. If you disagree with it, don't write for them. However, it's three months, not four. If the policy lapses before the 4th premium is collected it's a full chargeback.
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Why should this be not legal? many companies do this, and I personally I have no problems with this at all. If you write good business, you have nothing to worry about; if you are writing crap and getting an advance then you deserve to repay all the money. This is why I am a proponent of being As-Earned.
Last edited by TristanTLC : 11-04-2009 at 10:41 AM.
Like others mentioned this is clearly stated and if you do not agree with it do not sign the contract!! Please tell us what do you consider unfair about this arrangement??
I think this is a rotten practice, and have no idea why anyone thinks otherwise. Why some of you defend it makes little sense. I don't think the carrier thinks it's fair either, but they can do what they want, it's their company.
If they knew that agents were praising them for it, they'd think you were idiots.
Another thing for those who don't know, they do not pay a commission on policy changes as family members are added.
I've experience this on a couple of occasions. The most notable was when I had a single male client add his wife and children in the first policy year. I was paid on him only and the renewals are handled the same.
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No Government can be long secure without a formidable Opposition.
I go down to the bank and apply for a loan on my home. The loan comes with a "prepayment penalty," saying that if I pay off my loan before the total of 5 years, on a 30 year loan, then I have to pay an addition 5% interest.
Do I bitch at the bank and say that this is unfair practice? No! If I did bitch at the bank, do you think they would care? No! I am the one that needs the loan, and even though they are benefiting - I need them more than they need me. If I don't like the terms of the loan, I go to another bank and find another loan. It's a contract, it's in writing, it was disclosed to me, I signed it.
I don't go crying because I agreed to the contract, there is nothing unfair about this practice. In fact, I think it's a good deterrent to keep agents from writing crappy business. If you write good business, this is a non issue. Sure, no one can know for sure what will happen once the policy is issued; but if 30% of your policies fall off the books, then it's not the clients that are causing bad business - it's the agent that is causing the bad business.
Here's the truth; Assurant is one of the only carriers in the country that advances agents directly a full 12 months. To offset this liability something else has to give - notably that you'll incur a full chargeback unless the policy has been on the books 3 full months.
I just got hit with one this month for $1200, the policy was only on the books for 2 months. The client went from being an independent contractor for the last 5 years, then unexpectedly went from the sales side to management within the company and qualified for a fully paid group plan by his employer.
I don't see the big deal with the practice, they want to discourage people from signing up that are likely going to lapse right away. From an agent standpoint, Assurant has to be the most agent friendly health insurance company I've worked with by a wide margin. Unfortanetly, besides STM plans, I sold one or two policies with them last year. They just don't compete in my area.
Here's the truth; Assurant is one of the only carriers in the country that advances agents directly a full 12 months. To offset this liability something else has to give - notably that you'll incur a full chargeback unless the policy has been on the books 3 full months.
If you're not a fan of that system go as-earned.
The charge back is not limited to agents taking advances. I've always been "as earned".
How about this, they are the only carrier that charges back in the first 4 months, and the only one that doesn't pay commission on first year additions. Put that in your pipe and smoke it.
Like others mentioned this is clearly stated and if you do not agree with it do not sign the contract!! Please tell us what do you consider unfair about this arrangement??
I suppose it would be fair then if they refunded all the premium back to the client. And of course they don't do that. And for the record - I go as earned as well.
None of the other insurance companies I work with have such a practice. Oftentimes, there are unforeseen, mitigating factors that cause policies to lapse in the first few months. It's not as if 30% of anyone's business is falling off the books.
"Don't sign the contract" is an ridiculous argument so save that for someone else please.
Why is "don't sign the contract" a ridiculous argument? Do you somehow believe you that have the authority to tell the company how it should run it's operations? These are the company's policies, if you don't like it then don't work for them. Work for someone else, and if enough people don't work for them then they will have to either change their policy or go out of business.
I visited a restaurant the other day that doesn't serve hot sauce. GASP! I know! I ordered some Chili and asked for hot sauce and the excuse they gave me was that hot sauce is not fresh and they don't carry anything that is not fresh. The best they could do was offer me some sliced jalapenos. I asked if they made their own liquor and that if they made their own salt in the back as well since those aren't "fresh" either. They didn't have much to say to me, but I didn't get mad because this is not my restaurant. I don't make the rules at someone else's establishment. If I don't like it, I can say something to them then I can not go there again; but if I think I can tell them how to run their establishment then I've got another thing coming to me. If they are wise, they would listen to my suggestions, but the decision is still theirs to make.
If you don't like the policies, don't sign the contract. Perfectly valid statement. If they had done something against what they stated, I would be all onboard with you carrying the pitch forks going out for a witch hunt.
Why is "don't sign the contract" a ridiculous argument? Do you somehow believe you that have the authority to tell the company how it should run it's operations? These are the company's policies, if you don't like it then don't work for them. Work for someone else, and if enough people don't work for them then they will have to either change their policy or go out of business.
I visited a restaurant the other day that doesn't serve hot sauce. GASP! I know! I ordered some Chili and asked for hot sauce and the excuse they gave me was that hot sauce is not fresh and they don't carry anything that is not fresh. The best they could do was offer me some sliced jalapenos. I asked if they made their own liquor and that if they made their own salt in the back as well since those aren't "fresh" either. They didn't have much to say to me, but I didn't get mad because this is not my restaurant. I don't make the rules at someone else's establishment. If I don't like it, I can say something to them then I can not go there again; but if I think I can tell them how to run their establishment then I've got another thing coming to me. If they are wise, they would listen to my suggestions, but the decision is still theirs to make.
If you don't like the policies, don't sign the contract. Perfectly valid statement. If they had done something against what they stated, I would be all onboard with you carrying the pitch forks going out for a witch hunt.
This is a discussion board. Agents are bringing information that may be helpful to others including this company's policy on chargebacks.
Pointing out that we all have the option of not signing the contract is pointless and does not contribute to the discussion. It also makes you look like a jerk.
This is a discussion board. Agents are bringing information that may be helpful to others including this company's policy on chargebacks.
Pointing out that we all have the option of not signing the contract is pointless and does not contribute to the discussion. It also makes you look like a jerk.
Thanks for your opinion, it's duly noted.
As for "discussion," pointing it out totally constitutes a discussion. Expressing your opinion about the policy then invites other people to express their opinion. Here's my opinion: If you don't like the policy, don't sign the contract. Doesn't matter if it's Assurant of BCBS. If you don't like their product and how they pay, then don't sell it.
Last edited by TristanTLC : 11-05-2009 at 09:27 PM.
Of course you have an option of signing with a carrier or not. To say otherwise is foolish.
I have a Time contract but rarely use it. Has nothing to do with their screwy commission deal, but more having to do with their lack of competitiveness and ridiculous underwriting criteria.
I write maybe 1 case a year and when I do it is because I couldn't find a "fit" for my client elsewhere. Most of my clients are that way, including the healthy ones. If they want to make a change it is going to cost them a lot more than what they are paying now, or they will be giving up benefits they can't get elsewhere.
I have a Time contract but rarely use it. Has nothing to do with their screwy commission deal, but more having to do with their lack of competitiveness and ridiculous underwriting criteria.
Because of their uw, I would think that you had to place more than one client a year with them.
They will take some of the multiple med cases that none of the other carriers will approve. That should give you a minimum of about 1-2 per month. You need to re-check your Assurant totals.
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