Commission payouts

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Jim M

Is it normal for an annuity carrier to pay commissions 90 days out (in a direct from carrier commission)? If not, why might an FMO have it set up that way? Thanks.

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  • Jim M on September 12, 2024

    Thanks, Caleb, that helps quite a bit. I'm sure it's the latter in your examples, but I'm going to reach out to this particular organization to confirm.

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  • Caleb North on September 12, 2024

    Hey Jim, paying commissions 90 days out from the policy being issued is strange. Paying commissions 90 days out from the submitted application is a different story. By the time an app goes through initial review, suitability, approval, and gets funded it can be weeks and sometimes months after it was submitted which ultimately delays the commission payout. I've also seen carriers pay a portion of commissions and delay the remainder of commissions on big cases to get past the free look period before paying it all to the agent. Ultimately each carrier does it a bit differently so I can't say that it's wrong, but if it's 90 days from the policy being issued, that seems strange. Lastly, I don't of any reason why an IMO would have commissions paid 90 days late except to get past the free look period but that's typically just 30 days. Hope this helps!

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  • Caleb North

    Hey Jim, paying commissions 90 days out from the policy being issued is strange. Paying commissions 90 days out from the submitted application is a different story. By the time an app goes through initial review, suitability, approval, and gets funded it can be weeks and sometimes months after it was submitted which ultimately delays the commission payout. I've also seen carriers pay a portion of commissions and delay the remainder of commissions on big cases to get past the free look period before paying it all to the agent. Ultimately each carrier does it a bit differently so I can't say that it's wrong, but if it's 90 days from the policy being issued, that seems strange. Lastly, I don't of any reason why an IMO would have commissions paid 90 days late except to get past the free look period but that's typically just 30 days.

    Hope this helps!

  • Jim M

    Thanks, Caleb, that helps quite a bit. I'm sure it's the latter in your examples, but I'm going to reach out to this particular organization to confirm.

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