Life Insurance Question

2 replies [Last post]
FP38's picture
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Joined: 2013-10-05

I work for a broker dealer that is owned by a Life Insurance & Annuity company. I have been getting frustrated that I have to give the house half my commission when they aren't providing me with any benefits, administrative support, etc. Therefore, I had wondered if I could place my life insurance business independently outside of the company if it's fixed business. I had asked the compliance manager in my office, they told me that even if it's fixed, it would be considered selling away. However, I thought that only applied to variable business. Can someone help with this?

ttanin's picture
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Joined: 2013-10-17

It depends on the contract you signed. However, as a general rule even if the contract allows you to sell outside, as a broker dealer they have to approve your outside business anyway. So if you sell a lot of business for them and want to place some outside, they will approve it, if you try to cut them out, it is considered selling away.Some are really more flexible then others.

PWMG's picture
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Joined: 2015-04-14

"Therefore, I had wondered if I could place my life insurance business independently outside of the company if it's fixed business. I had asked the compliance manager in my office, they told me that even if it's fixed, it would be considered selling away. However, I thought that only applied to variable business. Can someone help with this?"

First, let's clarify a few things here. You specifically refer to life insurance business, so, when you say "fixed" -- do you mean "non-variable" business? Whole life, UL? Second, when you say variable -- are you referring to VL?

That said, yes, as ttain said, it depends on the contract you signed. I have producer contacts with several carriers (PPGA contracts and the like). I also have several producer contracts with large firms -- let's say the Crump's of the world -- as well as several broker contracts with large general agencies. However, I can place UL and WL wherever I want -- and my B/D (my old B/D) has zero to say about it. Yet, VL or private placement coverage, must go through the B/D (my old B/D).

Good luck.

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