Commission Disclosure Required In New York?

[0b1kanobee]

I received an email recently but I trashed it however another agent just called me and said that from what he gathered, in New York you will soon have to disclose your commissions on product to the client. Although he doesn't live in New York, you just wonder if that is going to spread or if this is just a New York thing (maybe California too).

That would kind of suck to be sitting with a client and disclose you just made 46K in commission by taking 1.2 million dollars and putting some into an immediate annuity to fund a new life insurance policy with 72k per year premiums and the rest in a long term annuity. Yikes!

The client easily forgets about the last 3 meetings you had with them where you didn't do any business plus the service work you will be doing for the next 15 years.

 

[Norwayguy]

I received an email recently but I trashed it however another agent just called me and said that from what he gathered, in New York you will soon have to disclose your commissions on product to the client. Although he doesn't live in New York, you just wonder if that is going to spread or if this is just a New York thing (maybe California too).

That would kind of suck to be sitting with a client and disclose you just made 46K in commission by taking 1.2 million dollars and putting some into an immediate annuity to fund a new life insurance policy with 72k per year premiums and the rest in a long term annuity. Yikes!

The client easily forgets about the last 3 meetings you had with them where you didn't do any business plus the service work you will be doing for the next 15 years.

I believe Colorado also has a commission disclosure law...While it sounds nice my commission does not affect the premium required by the insured. All this does is one make the insured think we are overpaid take a life insurance sale for instance the compensation is heaped and front loaded, two it may lead to a request to rebate commissions which is illegal in most states...Just show me what it does beneficially for the client...should the client choose the product or agent that makes the least say both Agents A&B show the same product and premium but Agent A shows his commission is 100% and Agent B shows his compensation is 25% because he is a Primerica Rep who has a low cut of the commission the carrier is still paying out the same commissions its just flowing to more people for Agent B as opposed to agent A.

 

[Todd King]

Does the letter say you actually have to tell them how much commissions or that you have to just disclose the fact that you make "a" commission?

 

[Norwayguy]

Does the letter say you actually have to tell them how much commissions or that you have to just disclose the fact that you make "a" commission?

I read an article on this about a week ago...You have to disclose the amount of compensation...There was question though of how it was to be calculated.

 

[360]

My understanding was that a disclosure is required informing them that you receive commission from the insurance company and they can request a detailed breakdown by requesting that in writing from the agent. Most clients are going to sign and and go no further.

Here is a text from one of the disclosures.

My role as an insurance agent licensed by the State of New York is to facilitate your purchase of insurance coverage. In keeping with New York State law, I am required to disclose to you that I will receive compensation from XYZ Insurance Co. as the result of your completing an application to purchase this insurance policy, for the duration of the policy.

Compensation may be in the form of a commission or fee. I may also be eligible for additional compensation depending upon a number of factors including premium and policy volume. You may obtain detailed information about the expected compensation if you make a written request to me.

 

[BNTRS]

Human nature, has nothing to do with protecting people. It's like every year when I get the town report and give it a once over and immediately go back to the delinquent tax payers to see whom I know who is on the list.

We are nosy people. The discussion of expenses is one you either get or you don't. If a client (actually prospect) is too worried about how much you are making off the sale of a policy to the point they won't buy if they don't know and still won't buy if they think it is too much, that person lives a sad life, and should probably stop buying everything.