NU Online News Service, Dec. 22, 2003, 6:08 p.m. EST – Agents in Wisconsin are exploring proposals that could open up new commission income sources.[@@]
One administrative rule change would allow agents to receive full commissions when they sell replacement long term care insurance policies.
“Wisconsin is one of only a couple of states where agents don’t get full commissions” for LTC replacement policies, notes Susan Linck, executive vice president of the Madison, Wis.-based Wisconsin chapter of the National Association of Insurance and Financial Advisors.
“The rule is a holdover from the time when regulators were worried about agents churning long term care policies,” Linck says.
Churning is the practice of writing one policy to replace another one, even though the existing policy doesn’t need to be replaced. Wisconsin regulators, concerned about this abuse, have limited the commissions an agent can earn on a replacement policy.
“The rule is damaging to consumers because many old LTC policies have restricted provisions,” Linck says. “Newer policies can give consumers more bang for the buck. But there’s no incentive for the agent to upgrade the person.”