Large Banks Breaking Commission Laws

[insurance1822]

So I have a friend who works for a large local banking institution & he does commercial lending. He specifically told me that if he refers business to their insurance division, he gets a cut of the revenues.

How could this be legal if he doesn't have an insurance license? We all know the banks are doing this & he specifically said it's based off "total revenues" but if that's coming from the sale of insurance products in certain situations, how the hell is that OK?

Meanwhile us retail agents have to watch out backs & never give money contingent upon a sale.

 

[cottonland]

They can do this because no one is going to call them on the carpet about it.

 

[riskybiz]

So I have a friend who works for a large local banking institution & he does commercial lending. He specifically told me that if he refers business to their insurance division, he gets a cut of the revenues.

How could this be legal if he doesn't have an insurance license? We all know the banks are doing this & he specifically said it's based off "total revenues" but if that's coming from the sale of insurance products in certain situations, how the hell is that OK?

Meanwhile us retail agents have to watch out backs & never give money contingent upon a sale.

This is all in the confines of a company. You can pay staff for finding business, why not another division?

 

[insurance1822]

This is all in the confines of a company. You can pay staff for finding business, why not another division?

Because you can't compensate somebody contingent upon the sale of an insurance policy unless they have an insurance license b/c that's splitting commissions

 

[nyc2phi]

Liberty Mutual has been doing this for years, the biggest players are credit unions. They get kick backs on everyone policy written for one of their customers. I assume if the bank is a licensed property and casualty entity that would be ok but as far as paying employees who aren't, yes that would go against the rules.

 

[Placementkid]

They most likely aren't being paid through commission, but a bonus program.

If you're so jealous of it, why not go work for them instead of "watching your back"?

Seems like your competition is outdoing you and you decided to complain about it on a public forum.

 

[insurance1822]

^ This is not my competition & I'd take a massive pay cut. Check yourself you moron. I'm in a debate w/ my friend who works at this bank & I'm getting affirmation on here.

 

[Arnage150]

Raise the question to your local insurance Association. I am a member of PIA and IIABA. I know they tackle issues like this on behalf of the independent agent system (if what they are doing is actually illegal). They went after Geico a few years back for their unlicensed phone sales people.
I'm not sure of the legality of the issue, nor have I experienced a significant loss in business to any banks in my area.
Good luck.

 

[cottonland]

Just like i said, no one will call them out on this.

 

[agentinsouth]

So I have a friend who works for a large local banking institution & he does commercial lending. He specifically told me that if he refers business to their insurance division, he gets a cut of the revenues. How could this be legal if he doesn't have an insurance license? We all know the banks are doing this & he specifically said it's based off "total revenues" but if that's coming from the sale of insurance products in certain situations, how the hell is that OK? Meanwhile us retail agents have to watch out backs & never give money contingent upon a sale.

It is not the actual commissions, it is part of a referral program. It works that way w/ all their line.... Mortgage, investments, loans, etc.... Very common in most banks. Now where they are skirting the law w/ insurance is the referral fee is only paid is the product is sold.