Commissions

  • "compensation patterns and product design"
  • "Special Compensation" - "incidental advice"
  • Renumeration

We designed commission rules that anticipated a relatively large number of rollovers of existing policies; full commissions are paid provided:

  • the new universal life face amount is at least two times the face amount of the replaced policy.
  • All cash values are rolled over to the universal life policy.
  • The new premium is at least equal to the current premium.

--  Phillip B. Norton, not a member of the Society, is Vice President of The Lincoln National Life Insurance Company


1983 - INDIVIDUAL LIFE INSURANCE RETENTION AND REPLACEMENT STRATEGIES, Society of Actuaries - 24p

  • 1976-4, NAIC Proc. - Life Agents' Compensation Task Force
  • 1981 0921 -  GOV -  INSURANCE AGENT COMMISSION DEREGULATION, SUBCOMMITTEE ON GENERAL OVERSIGHT OF THE COMMITTEE ON SMALL BUSINESS HOUSE OF REPRESENTATIVE
  • 1990 - LR - Statutory Prohibitions on the Negotiation of Insurance Agent Commissions: Substantive Due Process Review Under State Constitutions, ROBERT H. JERRY, II AND REGINALD L. ROBINSON - 50p
  • Mr. Birdsall asked if the agent compensation structure for IUL products provide greater incentives for agents than is provided by the compensation structure of traditional universal life (UL) products.
  • Mr. Samuelson (MetLife) said that a compensation study he had previously conducted found that, on average, IUL policies have a target premium 80% higher than the average target premium for UL products.

2014/11/14-15, IULWG -  6-63

  • From a distribution perspective, I think one of the challenges that face us in UL is the servicing of UL. 
  • Flexible premium, high-degree-of-service UL products have little or no renewal compensation paid if there’s no premium paid. 

--  Daniel F. Byrne, M Financial

1999 - The Next Generation Universal Life, Society of Actuaries - 30p

William Albus (National Association of Life Underwriters) commented that:

  • ...the requirement for disclosing sales commissions is unnecessary because it is superfluous and would only confuse consumers.
  • ...the purpose  of disclosure is to provide information for making an informed decision and the disclosure of sales commissions has nothing to do with making this decision.

1988-2, NAIC Proc.

  • The other question I have, coming from the standpoint of a mutual company, is that with our agency system it would be hard for us to replace whole life insurance with a commission rate that is around the level of a YRT commission plus 3% of premium.
  • That is about 10% of what we are now paying in the first year on a permanent insurance plan.

1979 - FUTURE TRENDS AND CURRENT DEVELOPMENTS IN  INDIVIDUAL LIFE PRODUCTS, Society of Actuaries - 24p - rsa79v5n44

  • Longer guarantees with corresponding higher gross premiums further increase commissions.
  • There is an incentive for agents to sell longer guarantees even when they are not needed.

--  BRIAN KAVANAGH

1995 - Life Valuation Issues -- XXX/Regulation 147, Society of Actuaries