Commissions

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.

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

 

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

  • 1976-4, NAIC Proc. - Life Agents' Compensation Task Force
  • 1981/09/21 -  GOV -  INSURANCE AGENT COMMISSION DEREGULATION, SUBCOMMITTEE ON GENERAL OVERSIGHT OF THE COMMITTEE ON SMALL BUSINESS HOUSE OF REPRESENTATIVE

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. 

--Mr. Daniel F. Byrne

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.

Statutory Prohibitions on the Negotiation of Insurance
Agent Commissions: Substantive Due Process Review
Under State Constitutions

--  ROBERT H. JERRY, II* AND REGINALD L. ROBINSON**

https://kb.osu.edu/bitstream/handle/1811/64079/OSLJ_V51N4_0773.pdf

  • 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