Please Masa Please Masa Please Release Me

[somarco]

I'd be downright loquacious!

the aim is always pellucidity

I believe you can get arrested for that in most states. Maybe not in Kentucky as long as you are related.

 

[goillini52]

It's un-American I tell ya' ... at least it has been since 1865 or so, though vestiges of feudalism and slavery remain today, to be sure. I find it quite chilling how sanguine so many folks are about this today. Authoritarianism, despotism, exploitation in all forms remain phenomena of human existence against which we must remain ever vigilant.

The structure of the insurance business is but one small example of how easily folks will accept a type of bondage. But let's face it: It is admittedly a difficult task balancing the rights of the agent and the rights of the agency. Advanced commission debt is the real problem. With electronic accounting it is simple enough for a company to track pay-throughs and renewals to protect an agent's former agency. It it the exposure to someone else's debt that really gums up the works.

It makes me wonder if a system like Liberty Banker's Life where carriers withold 10% of the commission from the advance to pay for future chargebacks wouldn't be a good industry wide practice - especially among the final expense carriers. It would certainly make it harder for an IMO to refuse to release if the carrier had escrowed several thousand dollars to pay for any chargebacks that occur during the six to 12 months following an agent's release.

Years ago when I was captive with Globe Life, if a guy got too many kickbacks and his renewals weren't going to satisfy the debt soon enough, they'd hold out 10-50% from new commissions depending on the amount owed and the manager.

You could also have an amount held out each week like LBL, or you could use that money for your taxes.

 

[DayTimer]

Years ago when I was captive with Globe Life, if a guy got too many kickbacks and his renewals weren't going to satisfy the debt soon enough, they'd hold out 10-50% from new commissions depending on the amount owed and the manager.

Today, at least with the carriers where I have experienced it, if you have a chargeback, they take all commissions until the chargeback is paid in full. Again, many of the debt problems could be fixed with a simple policy like Globe Life used. I know agents will avoid writing a carrier if they need the money but also know that they have a chargeback and the carrier is going to clear that in full rather than pay the agent a new commission. Why not let the agent keep submitting business and take 10-20% of the new commission and apply that to the chargeback? The company gets to clear some debt and the agent gets to eat.

A couple of quick fixes, and agents, agencies, and carriers would all be in a much stronger footing:

1) Hold 10% of advance to pay for future chargebacks. That 10% hold back on any particular policy would be released to the agent upon payment to the company of the 12th monthly premium.

2) If the holdback fund is insufficient to clear a chargeback, then apply no more than 10-20% of new business commissions to paying back the chargeback so the agent will continue to receive a pay check and the company will continue to receive new business from that agent.

Win Win Win, right?

 

[shonceman]

Today, at least with the carriers where I have experienced it, if you have a chargeback, they take all commissions until the chargeback is paid in full. Again, many of the debt problems could be fixed with a simple policy like Globe Life used. I know agents will avoid writing a carrier if they need the money but also know that they have a chargeback and the carrier is going to clear that in full rather than pay the agent a new commission. Why not let the agent keep submitting business and take 10-20% of the new commission and apply that to the chargeback? The company gets to clear some debt and the agent gets to eat.

A couple of quick fixes, and agents, agencies, and carriers would all be in a much stronger footing:

1) Hold 10% of advance to pay for future chargebacks. That 10% hold back on any particular policy would be released to the agent upon payment to the company of the 12th monthly premium.

2) If the holdback fund is insufficient to clear a chargeback, then apply no more than 10-20% of new business commissions to paying back the chargeback so the agent will continue to receive a pay check and the company will continue to receive new business from that agent.

Win Win Win, right?

My first run at FE was with Life of Boston (who eventually became Lincoln Heritage). I don't know if they still do this, but they handled all debt, whether chargeback or lead debt, by taking 50% of your advance pay. You still got 100% of your paythru and renewal. That was enough to keep me writing for them, even though in those days they weren't captive.

 

[DayTimer]

My first run at FE was with Life of Boston (who eventually became Lincoln Heritage). I don't know if they still do this, but they handled all debt, whether chargeback or lead debt, by taking 50% of your advance pay. You still got 100% of your paythru and renewal. That was enough to keep me writing for them, even though in those days they weren't captive.

So maybe take 10-20% of the advance pay for agents with less than 2 years and then after two years capture 50% of advance as pay throughs and renewals will be more sustaining.

Anything would be better than the situation we have now where agents are essentially sentenced to "debtor's prison" in the form of a refuse to release IMO.

 

[bboman23]

Your idea is great, but it would need to be a little different. The debt usually comes from some niche company they throw 10k to all at once and it all lapses.

Youd need to have a way for the % held back to be applied to any carrier (which cant happen).

David, if you roll $1,000 to me with UHL, I pay it and I get any future pay of yours from UHL.

I think if an agent rolls debt to an upline, they should forfeit ALL future commissions with every carrier! Although that won't happen either.

IMOs start getting smart after a while. I have had some HUGE debt roll ups ($19k, $66k, $34k, $33k, $14k, etc.) It gets old after a while.

Another thing that people don't consider is that some IMOs (ones on here) don't honor the acceptance of debt.

You leave me to go to XYZ and XYZ agrees to all debt. Then company A gives you a new writing number under the new IMO. You have $3,000 in debt hit your OLD NUMBER, so I call your new IMO to collect and they DON'T PAY!

That's some of the stuff the IMOs have to deal with. You do things right David, so you're probably thinking of your situation. It's usually not a "David" asking to leave.

Just my .02

(As a side note, I have never not released an agent direct to me!)

 

[GMDM100k]

Your idea is great, but it would need to be a little different. The debt usually comes from some niche company they throw 10k to all at once and it all lapses.

Youd need to have a way for the % held back to be applied to any carrier (which cant happen).

David, if you roll $1,000 to me with UHL, I pay it and I get any future pay of yours from UHL.

I think if an agent rolls debt to an upline, they should forfeit ALL future commissions with every carrier! Although that won't happen either.

IMOs start getting smart after a while. I have had some HUGE debt roll ups ($19k, $66k, $34k, $33k, $14k, etc.) It gets old after a while.

Another thing that people don't consider is that some IMOs (ones on here) don't honor the acceptance of debt.

You leave me to go to XYZ and XYZ agrees to all debt. Then company A gives you a new writing number under the new IMO. You have $3,000 in debt hit your OLD NUMBER, so I call your new IMO to collect and they DON'T PAY!

That's some of the stuff the IMOs have to deal with. You do things right David, so you're probably thinking of your situation. It's usually not a "David" asking to leave.

Just my .02

(As a side note, I have never not released an agent direct to me!)

There are things you can do to protect yourself as a manager and Imo. And I agree these new imos are figuring out about replacing and debt.

I think holding a release would encourage someone to replace. If an agent is not ever planning on writing with the company again they will be more likely to flop business. If they are planning on having future commissions from that company they probably won't.

I imagine if they are asking for a release they would be planning on still using them. So they wouldn't be planning to rewrite. But obviously if they need money they will.

There is definitely an easy way to have the possibility to keep their future commissions. Thats why some agencies have longer vesting periods . Usually agents that flop don't stay for very long. And don't flop every single app.

I don't know about you but for me most of my agent roll up comes from agents that were with me for less than two years. Some a tiny bit over. So having a two year vesting helps me wash out on some of the debt. But these are also changes that agents hate .

I see it all the time . A new ad. Top commissions! Day one vesting. Can sign up with any carrier you want.

Then a couple years later, these same guys have ads saying hiring captive agents! Starting com 80 percent.


There is a reason that captive companies and old imos do things the way they do them. And they get bashed repeatedly about it.

Quick to vector. Hate it. Omg .They vectored my advance debt!??? Criminal!! Two year vesting???? Wtf? I'm not ever working with them. I'm going with this guy that gives me super high comp so I can learn and leave him for even higher comp. Get that release form he said he'd sign up front before I write. So he makes a tiny spread and is in the hook for my 200k in advances I'm gonna roll.

The problem is what you're seeing right now with release thread. A new manager that offered all these things. And now it's biting him in the ass.

He'll wise up . And make changes . The imo too probably. But two years later some new agency will come along and do the same thing. They'll be like, high comp. Day one vesting, upfront release form. Duhhh. Why didn't anyone think of that before! I'm going to get so many agents. That's what they want! I'll give it to them. Lol

 

[DayTimer]

Your idea is great, but it would need to be a little different.

I guess my idea would make it better for honest agents and honest agencies, but it sounds as though it would not necessarily protect against the not so honest folks.

What do you do when the agent just up and leaves the business entirely and doesn't give a rat's behind about owing charged back commissions?

I really have no desire to build an agency. I could see maybe bringing on a Spanish speaking agent to work with me locally. Maybe, if any of my kids want into the business I'd figure out a way to help them with that. But otherwise, God bless you guys on the hook for the debt of dozens, or even hundreds of folks - but that is not for me.

 

[GMDM100k]

I guess my idea would make it better for honest agents and honest agencies, but it sounds as though it would not necessarily protect against the not so honest folks.

What do you do when the agent just up and leaves the business entirely and doesn't give a rat's behind about owing charged back commissions?

I really have no desire to build an agency. I could see maybe bringing on a Spanish speaking agent to work with me locally. Maybe, if any of my kids want into the business I'd figure out a way to help them with that. But otherwise, God bless you guys on the hook for the debt of dozens, or even hundreds of folks - but that is not for me.

Well there is a way to completely protect the manager from agent debt. That would be to have every agent get paid as earned. How it was wayyyyyy back when some of you guys started. It wasn't an issue then. Zero debt. For the agent and manager.

But I would make it even harder for a new agent to make it in the business . And doesn't seem like a viable way to have stable growth as an agency.

Hopefully its not a trend in the industry. If Imos start drowning in debt it would be more likely they start to lower advances.

It's possible the industry will make a full circle and no one will want to adanvad agents.

That is of course until some new company starts up and says... Hmmmm why don't we advance the agents their commissions!?? What could go wrong??? Hahaa

 

[rousemark]

Well there is a way to completely protect the manager from agent debt. That would be to have every agent get paid as earned. How it was wayyyyyy back when some of you guys started. It wasn't an issue then. Zero debt. For the agent and manager.

But I would make it even harder for a new agent to make it in the business . And doesn't seem like a viable way to have stable growth as an agency.

Hopefully its not a trend in the industry. If Imos start drowning in debt it would be more likely they start to lower advances.

It's possible the industry will make a full circle and no one will want to adanvad agents.

That is of course until some new company starts up and says... Hmmmm why don't we advance the agents their commissions!?? What could go wrong??? Hahaa

Back when I left the debit company and started an agency, there was very little debt to roll up.. Very few companies were paying advances.. especially in the health business.. There were a few advancing in the life business but for the most part it was limited to 3-6 months..