Rollups and Overrides

[somarco]

This question is for FMO's only . . . some agents have their own opinion about "life at the top of the food chain" but I don't believe much of what is posted.

I think it is pretty much understood and agreed that commission advances on lapsed business results in a loss and rolls up to the FMO/GA. But what happens when an agent leaves the business and does not renew their license and/or complete annual certification?

My assumption is the business becomes a house account and the commission (renewals, etc) are reassigned to an in house agent. Carrier commissions and overrides continue and are simply paid to a different writing agent.

Or does the FMO lose future earned commissions and overrides?

 

[Newby]

This question is for FMO's only . . . some agents have their own opinion about "life at the top of the food chain" but I don't believe much of what is posted.

I think it is pretty much understood and agreed that commission advances on lapsed business results in a loss and rolls up to the FMO/GA. But what happens when an agent leaves the business and does not renew their license and/or complete annual certification?

My assumption is the business becomes a house account and the commission (renewals, etc) are reassigned to an in house agent. Carrier commissions and overrides continue and are simply paid to a different writing agent.

Or does the FMO lose future earned commissions and overrides?

I can tell you on the Life side. I’ve had a number of agents to retire. The company pays their overrides to them but they will reassign usually me as the servicing agent. So I handle the service calls but the original agent keeps all the renewals.

 

[somarco]

original agent keeps all the renewals.

Even if they don't maintain their license?

 

[Newby]

Even if they don't maintain their license?

Yes. I don’t know if that’s the same with all carriers. But I have one that retired and dropped his license that I just dealt with in December and the carrier sent out letters to all the clients to call me as their servicing agent but said they can pay him his renewals ongoing.

 

[somarco]

Yes. I don’t know if that’s the same with all carriers. But I have one that retired and dropped his license that I just dealt with in December and the carrier sent out letters to all the clients to call me as their servicing agent but said they can pay him his renewals ongoing.

So you are working for free on that situation.

Life insurance and Medigap require a license, but MAPD requires a license and certification. I wonder if MAPD rolls up to the FMO or, as some agents have alleged, comissions and overrides cease and are charged back?

 

[Newby]

So you are working for free on that situation.

Life insurance and Medigap require a license, but MAPD requires a license and certification. I wonder if MAPD rolls up to the FMO or, as some agents have alleged, comissions and overrides cease and are charged back?

I’m not sure on MA if the agent doesn’t recertify. Probably goes to the top of his food chain. But MA clients drop off fast if you stop working your book anyway. They scatter.

 

[somarco]

I’m not sure on MA if the agent doesn’t recertify. Probably goes to the top of his food chain. But MA clients drop off fast if you stop working your book anyway. They scatter.[/QUOTE]

Some agents seem to have a differing view on that . . . in their world MAPD clients are easy, no complaints, no need for annual review . . . or maybe that is simply their justification for proclaiming that MAPD is the "Life of Riley".

 

[maalox]

Commissions when an agent does not certify do not roll up

 

[somarco]

Commissions when an agent does not certify do not roll up

Are you an FMO?

 

[Bill_Kiray]

I think it is pretty much understood and agreed that commission advances on lapsed business results in a loss and rolls up to the FMO/GA. But what happens when an agent leaves the business and does not renew their license and/or complete annual certification?

My assumption is the business becomes a house account and the commission (renewals, etc) are reassigned to an in house agent. Carrier commissions and overrides continue and are simply paid to a different writing agent.

Or does the FMO lose future earned commissions and overrides?

There are two scenarios in how this works for MA/PDP:

• 90% of Carriers - Examples would be UnitedHealthcare, Aetna, Humana - when the agent's license lapses, or does not complete annual certification, commissions cease to be paid to all levels of the hierarchy. Agent doesn't receive commissions, nor do any levels of hierarchy (GA, MGA, etc) that exist between the Agent and the FMO. No one gets paid, and you cannot "reassign" the policy to another Agent.
• 10% of Carriers - Example would be smaller local carrier like state specific BCBS plans - The carrier reaches out to us and ask to whom we want the business reassigned in terms of Agent of Record (AOR). If the Agent was direct to N&F, we will assign the business to our Agency and service the policyholder. If the Agent was contracted through a downline Agency, we will reassign it to them and they will have to service the policyholder. This only happens after repeated attempts to get the Agent to complete certification or get their license reinstated. There are many times we make these outreaches and the Agent asks us to stop calling them, even though we explain they will lose their renewal commissions on the business in force.

That is why our team at N&F - and I would assume at other FMO offices - work so hard at offering resources, reminders, etc to Agents about completing annual recertification for Medicare Advantage.