North American or Midland National Life

[MNLU]

Both companies are owned by sammons, so the reversal rules I believe are the same on both products, no?
I was only comparing North Americans product to midlands....not saying anything about the chargeback policies/rules...again I believe they are the same.

I am admittedly biased here as I am not a fan of the NA bga distribution structure. I like being able to call the underwriters whenever I need to speak to them
, which midland offers. NA will not allow agents to speak to underwriters in my experience and everything has to go through the bga middleman.

I haven't read the specifics of both contracts; however, I know that the language for NA is

For cancellations by North American, there is a 100% commission chargeback throughout the entire surrender charge period of the contract. In addition and not limited by the forgoing, North American reserves the right to chargeback commissions at any time, in its sole discretion, pursuant to paragraphs 7 and 9 of the agent contract, which are expressly incorporated herein

(my emphasis)

That's WAAAYYY open ended and is very one sided. If a company's policy was to only chargeback when there was evidence of agent misconduct then the average agent could feel safe IF they have complied with ethical business practices. NA (and Midland); however, have used this broad latitude to make a profit on the business they get sued for.

They issue the annuities, get sued, drag out the litigation for YEARS, and then refund all of the policy premiums plus a modest amount of interest. They actually earn four or five percent more interest per year than they actually return to the policy holder.

They could make money from this scheme, alone, but they maximize their profits by charging back ALL (or almost all) the agents regardless of whether they sold the annuity the right way or not.

One other thing about Midland. Hope that your customer never Googles "Midland National Life" reputation. It's NOT a pretty picture.

 

[shooter]

I would have to second the caution on using Midland Life.
Everyday we see reports that more and more consumers
use the internet to purchase or research a purchase.

Midlands history for being sued goes back a lot
of years.
It isn't just a recent development.
Anyone can Google them and see the long list of law suits
it would almost seem they have a lack of instructional control in
their annuity division.

I'm not putting Midland down.
Just cautioning you to be prepared if the questions should
arise.

Shooter

 

[ATM]

I would have to second the caution on using Midland Life.
Everyday we see reports that more and more consumers
use the internet to purchase or research a purchase.

Midlands history for being sued goes back a lot
of years.
It isn't just a recent development.
Anyone can Google them and see the long list of law suits
it would almost seem they have a lack of instructional control in
their annuity division.

I'm not putting Midland down.
Just cautioning you to be prepared if the questions should
arise.

Shooter

Google any major insurance company and tell me if you don't find similar suits against them.

It's the nature of the beast today. If you sell annuity or life products you are going to be sued.

I have contracts with both North American and Midland. Products on the life side are similar on the IUL platform but not the same. No Lapse UL and term are identical I think, or really, really close on UL.

Big differences are on comp and service. Midland is the PPGA company. Meaning they are built to deal with a life insurance agent directly. I think I heard that they are the #1 PPGA company in the country now.

NA is Sammons brokerage company.

Base comp is probably a little higher for most people with NA but if you write life insurance more than one or two cases a year you will probably make more with Midland, and maybe much more. You will also be much happier and your business will turn around much, much faster on average.

I have had similar cases go to both companies and even though their underwriting is housed in the same building the NA policies always took weeks longer to complete.

My average turnaround time on a life app is less than 28 days at Midland, and they order the APS info. With NA it was closer to 2 months through my IMO and some times longer like the never ending 7 month long case.

I don't like either companies Annuity divisions that much and I don't write much annuity premium anyways. They are separate and distinct from their life divisions.

If you are a good life agent definitely Midland. If you do something else and write one or two apps a year - North American.

 

[CFP83]

Google any major insurance company and tell me if you don't find similar suits against them.

It's the nature of the beast today. If you sell annuity or life products you are going to be sued.

I have contracts with both North American and Midland. Products on the life side are similar on the IUL platform but not the same. No Lapse UL and term are identical I think, or really, really close on UL.

Big differences are on comp and service. Midland is the PPGA company. Meaning they are built to deal with a life insurance agent directly. I think I heard that they are the #1 PPGA company in the country now.

NA is Sammons brokerage company.

Base comp is probably a little higher for most people with NA but if you write life insurance more than one or two cases a year you will probably make more with Midland, and maybe much more. You will also be much happier and your business will turn around much, much faster on average.

I have had similar cases go to both companies and even though their underwriting is housed in the same building the NA policies always took weeks longer to complete.

My average turnaround time on a life app is less than 28 days at Midland, and they order the APS info. With NA it was closer to 2 months through my IMO and some times longer like the never ending 7 month long case.

I don't like either companies Annuity divisions that much and I don't write much annuity premium anyways. They are separate and distinct from their life divisions.

If you are a good life agent definitely Midland. If you do something else and write one or two apps a year - North American.

Your experience between the two companies is identical to mine....i do not write NA any longer.

 

[ATM]

Your experience between the two companies is identical to mine....i do not write NA any longer.

Love Midland..... hate NA.

It's funny because they are all in the same building!

The real difference I suppose is that I have a relationship with the Midland people. I have an underwriter and a case manager I can call and talk to.

With NA is have the IMO and I know they really don't have a relationship with the people at NA. They send them an email when they need something.

I hate doing business like that. There is so much lost when you just send emails back and forth. I cannot tell you how many times I have called my Midland underwriter and gotten a better offer than the one based off just the paperwork that the underwriter looked at and simply stamped the book rating to.

Had a case last week where she had a flat extra on for occupational hazard. Talked to her and standard in 2 seconds. I can guarantee that if this was with NA the email the IMO sent would have been looked and and maybe two or three weeks later the rating would have been removed, but maybe not.

I can guarantee my frustration level would have been much higher.

 

[luxent]

Both companies are owned by sammons, so the reversal rules I believe are the same on both products, no?

I guess so. Anyone can confirm?

 

[wln417]

Does the chargeback policy on annuities that MNLU talks about concern any of the rest of you like it does MNLU? Midland's is the same word for word (except substitute Midland of course).

What do Paras 7 & 9 say?

 

[VolAgent]

I guess so. Anyone can confirm?

It is plastered all over their forms, website, etc. It isn't a secret by any stretch.

 

[MNLU]

Google any major insurance company and tell me if you don't find similar suits against them.

Yes, that's true; but ..................

Midland National seems to attract legal trouble like it's iron shavings and they're an electro magnet. These class action suits go back almost thirty years and when they get their hand slapped for one transgression their marketing department seems to come up with another scheme.

All of this would be almost funny if it weren't for the agents that been destroyed in the process.

Before I go any further I want to disclose that I have had my own problems with Midland National and my remarks are tempered with that experience.

Other companies like Allianz have crossed the line, got caught, and changed their practices. Midland National, not so much. There's another thread in this forum discussing Midland National getting fined 1.3 million in California in February as a result of their having to make a 31 million dollar settlement there on policies last fall.

This is the THIRD time they've been caught in California in the last ten years. I mean, who are their compliance officers; the Three Stooges?

Midland National got busted last year for abusing the Social Security Administration’s Death Master File. Midland National stopped making annuity payments to people the list showed as having died, BUT Midland National intentionally did not search for the beneficiaries of life insurance policies on the lives of policy holders that the list said had died.

This forum doesn't have the bandwidth to list all of the crap they've pulled and the published reports are all over the internet.

So are the consumer complaints. Midland National must have hired their customer service employees from a cell phone or cable company to be that bad. You see descriptions like "horrible", "rude", and "abusive" in review after review.

Somehow, Midland National seems to find a way to make money from all of these schemes. They offer their agents higher commissions to sell their products and then charge back those commissions when they're forced to settle the lawsuits.

The agents are left to clean up the mess. Really; what do you say when a prospect shows you a computer screen that's full of consumer complaints and published stories describing enforcement actions, consent agreements, class action lawsuits, and attorney general investigations?

What do you say if they ask if ALL companies have a history like that? If you lie and say yes you take the chance that they'll do some research and find out you mislead them. How does THAT develop trust in your relationship?

If you're comfortable having dig through that poop in order to pull out the pony then......good luck, but each agent should carefully consider the pros and cons of the companies they represent.

 

[BNTRS]

I'm going to preface everything I'm about to say by noting that I have a broker relationship with Midland National and North American. I do not have any special information about the company that is not publicly available and all of what I'm about to discuss comes from that publicly available information.

Regarding Midland and lawsuits for annuities sales (or any other complaints related to their business practice) I think it's extremely important to keep things in perspective.

Regarding the most recent lawsuit in CA, the alleged $31 million in damages totals roughly 1.2% of the total annuity premiums Midland collected in 2013 alone.

Googling as MNLU has suggested provides numerous web sites covering the same lawsuit in California. The number of web sites covering the same issue does not make it any more or less of a significant event, and given the size of the lawsuit and the fact that is achieved class action status, there would be no wonder that several law reporting web sites would publish content on this subject.

Attempts to find real consumer complaints found three web site:

Complaints Board - where someone who used to operate a web site called Midland Life Reviews carried on a short back and forth about alleged problems at Midland.

RipOff Report - where a consumer showed up to complain about being sold an indexed annuity issued by Midland, but seemed to have more problems with the agent who sold it.

Pissedconsumer - where there were 18 complaints. Using 2013 as an example again, Midland issued 36,468 life insurance contracts. Now, Midland issues more annuity contracts than life insurance contract, but I don't have the specific number of annuity contracts issued in 2013 handy. These 18 complains would equal 0.05% of all life insurance contracts issued in 2013. Just to give some scale to the number of complaints.

But not all of these complaints are actual complaints about Midland. One is a complaint about Midland Funding, LLC (a debt collection agency) and another is a lengthy diatribe from a life insurance agent that is very similar in tone to the discussion above.

Now, none of the above should be construed as a way to excuse bad behavior from Midland or any company. If, as it appears the courts in California have decided, they made a mistake then they certainly owe those affected--and by the looks of it they are making good on that.

If an agent is negative impacted by such events because he or she was involved in the problem that led to lawsuit, it should come to that agent as no surprise that he or she might face negative consequences as a result.

As others have already commented within this discussion, several companies have faced lawsuits for various business practices. Additionally, every financial services related company faces multiple fines every year. It's the cost of doing business.