Now I heard everything...

[VolAgent]

With all due respect mate, our job is to do what's best for the client and not the carrier.

I highly recommend you re-read your contract and the laws about churning.

I get it is well meaning, but it violates the contract and it meets the definition of churning.

 

[rousemark]

With all due respect mate, our job is to do what's best for the client and not the carrier.

Actually we have an obligation to both. However if you are an "agent", then you represent the carriers.

 

[springbokhouston]

So even if a client that was previously GI is now eligible for level you wouldn't write them? Call me guilty.

 

[VolAgent]

So even if a client that was previously GI is now eligible for level you wouldn't write them? Call me guilty.

Most companies don't care about the one offs. It happens from time to time and might get a phone call. Although some companies care more about this than others.

But to systemically roll your book? That is churning, even if you just left LH or SL, or any other carrier and suddenly have access to "better" products.

 

[goillini52]

So even if a client that was previously GI is now eligible for level you wouldn't write them? Call me guilty.

Hey Guilty, how're you doing today?

 

[springbokhouston]

Still guilty as charged. I guess that I'm just not in agreement with your definition of churning. If there is a benefit to the client and it's not done with the purpose of generating additional first year commissions I don't see how it breaks the law.

This is directly from the Texas Department of Insurance
Churning: Agent induces customer to use cash value of existing policy to purchase a new policy, resulting in another commission for the agent.

Another from Bill H.B 2762
“churning” (persuading a life insurance policyholder through misrepresentation to use the cash value and/or dividends of an existing policy to purchase a higher death benefit policy)

All that being said, I haven't and wouldn't replace a client of mine to save them a couple bucks.

 

[VolAgent]

This is a guy who would like to sue you.

What Is Insurance “Twisting” and “Churning”?

To use your earlier example where someone with a GI policy now qualifies for level. What if the claim for the level policy is denied? Did you improve their situation?

What if it was simply to get them a lower premium, and then their claim was denied?

Also don't forget the insurance company, tortious interference.

Now, I'm not trying to say you are a bad guy, but you are playing in a dangerous playground. Even you have said that insurance companies are trying to cut down on churning and twisting.

 

[springbokhouston]

Is that Charlie Runkle from Californication?

Again it's not a problem that I personally have. As a service LH agents are welcome to send me their overpaying clients.

 

[donamese]

Still guilty as charged. I guess that I'm just not in agreement with your definition of churning. If there is a benefit to the client and it's not done with the purpose of generating additional first year commissions I don't see how it breaks the law.

There in lies the problem. You may say $2 a month is a benefit to the client, another may say it is $20. Where does a company draw the line? The insurance company gets caught in a bad position because if they make rules to catch the bad guys, they also affect quality agents in the process.

Lets evaluate the example above, DOI would see that your client saved $24 on the year and reset their contestable period, you made an additional $800 in commission. Explain that to a jury and see how you do.

 

[springbokhouston]

Agreed, I would never replace a customer for $2 per month but if I run into a policy that's a year old with a 2 year wait I certainly would place them level if they qualified. There's a reason why replacement rules are in place.