COMMISSIONS - EXPLAINED

Advances are processed on a weekly basis based on Delivery Receipt turn-in.  They are comprised of 8 months of commissionable premium times the agent's commission percentage.  The Amount of the advance that you receive will be posted to your debit balance as a negative figure which will reduce as earnings from that advanced case are received from the Carrier.  Earnings above and beyond the initial advanced amount on the case will be applied to the debit balance account.

**All Advances are subject to the one app every 30 days rule!  No exceptions.

Example:

You submit a delivery receipt for a case with a commissionable premium of $300.00/mo., aft or credit card pymt mode;

You are advanced 8 x $300 x commission%

assume that your are a level 4 writing agent receiving Leads, and this is an AFC CompCare app;

8 x $300 x 20% = $480.00 in Advance

Your debit balance for the following month would reflect a negative $480.00, -$480.00; and there would be a 1% interest charge for your current outstanding debt as per the AFC Agent Agreement.

There is a maximum advance per case of $500 per issued policy.

Where an agent's contract becomes inactive due to lack of production, that agent's outstanding balances will be move to his/her Debit Balance account.  This includes both positive and negative charges.  An Inactive Agent may receive a balance due statement if the estimated earnings for that agent's block of business will not pay off the amount owed within Six (6) months from the date that the agent's contract becomes inactive.

Half of the Submit Advance is awarded the writing agent in the same week that the agent submits new business which has a premium payment mode of AFT or credit card as per the AFC Guidelines.  This advance amount is based on the amount submitted with the app, less the app fee and administrative/ppo charges which are non-commissionable.  These submit advances are awarded only to those agents who (1) have qualified as per the AFC Advance Guidelines, (2) are in good standing with AFC, submitting one app every 30 days, and (3) have submitted a complete application with quote.

Example:

You submit a new piece of business on Monday, and qualify for either Submit Advance Level.  We will assume a Submit Level 2 in this example, level 4 writing agent Commissions:

The cash-with-app is $366.00

Less the admin/ppo/app fee, $300.00

6 months x $300 x 20% = $360.00 paid to agent

Once the case is issued and placed, the agent submits a delivery receipt;

12 months x $300 x 20% = $720 first year less what the agent was already paid (6 mos.) $360.00 = $360.00

In this manner, if there are overages or shortages, the difference is made up in the second half of the submit advance.

There is a maximum advance per case of $500 per issued/placed policy for Submit Level 1 agents, and there is a maximum advance per case of $1000 per issued/placed policy for Submit Level 2 agents.

Where an agent's contract becomes inactive due to lack of production, that agent's outstanding balances will be move to his/her Debit Balance account.  This includes both positive and negative charges.  An Inactive Agent may receive a balance due statement if the estimated earnings for that agent's block of business will not pay off the amount owed within Six (6) months from the date that the agent's contract becomes inactive.

In the event that a case that has been advanced/submit advanced on ISSUE:

1.  Defaults in the first 6 months

2.  Is closed by the Carrier - issued

3.  Is closed by the Client - issued

4.  One person on the app is declined

5.  or any other situation where the advance is in jeopardy of default,

All advances are subject to being charged back for the full premium that was advanced on the case.

Example:

You have received your second half submit advance as described above, so you received a full $720.00 in first year commission for the case.  Then, the client decides that he doesn't want the policy, for whatever reason.

You would receive a premium charge back on your next commission statement in the amount of $3600.00 in PREMIUM, (12 mos. X $300).  This will post as a negative $720.00, -$720.00, on your commission statement  This is the total amount of the advance that you received on the case.

This negative balance, if not paid in full by the statement on which it appears, will be moved to your miscellaneous adjustment balance.  It will remain as a negative until future earnings/advances pay off the balance.

Where an agent's contract becomes inactive due to lack of production, that agent's outstanding balances will be move to his/her Debit Balance account.  This includes both positive and negative charges.  An Inactive Agent may receive a balance due statement if the estimated earnings for that agent's block of business will not pay off the amount owed within Six (6) months from the date that the agent's contract becomes inactive.

In the event that a case that has been SUBMIT ADVANCED:

1. Remains pending for >75 days

2.  Is closed by the Carrier - pending

3.  Is closed by the Client - pending

4.  One person on the app is declined

5.  Bank draft, AFT, or credit card information is incorrect, declined, incomplete

6.  Premium payment mode is changed

5.  or any other situation where the advance is in jeopardy of default,

All advances are subject to being charged back for the full premium that was advanced on the case.

Example:

You qualify for a submit advance as described above.  You submit a case to AFC and receive your same-week submit advance check.  Then, the carrier reports to AFC that the case is a Decline.

You would see a Submit Advance charge back entry on your next commission statement, identified by S1C or S2C, where the premium on which you were advanced will appear as a negative.  This will post as a negative $360.00, -$360.00, on your commission statement  This is the total amount of the advance that you received on the case.

This negative balance, if not paid in full by the statement on which it appears, will be moved to your miscellaneous adjustment balance.  It will remain as a negative until future earnings/advances pay off the balance.

If the case is still able to be Issued, depending upon your agent status with AFC, the case in question may be set to be paid as EARNED, or set up for Advance on Issue.  You will be notified which is the case.

Where an agent's contract becomes inactive due to lack of production, that agent's outstanding balances will be move to his/her Debit Balance account.  This includes both positive and negative charges.  An Inactive Agent may receive a balance due statement if the estimated earnings for that agent's block of business will not pay off the amount owed within Six (6) months from the date that the agent's contract becomes inactive.

Monthly Earnings are received by AFC in the 3rd week following the month in which the premium was due for the client.  AFC then posts those earnings against outstanding debit balances, miscellaneous adjustments, etc., and sends the writing agent statements, both a debit balance statement and an earnings statement, in the 3rd week of the following month.  Therefore, you can rely on the fact that you will be mailed your earnings statement every 3rd week of the month.

Example:

A case is issued in May.  The carrier posts the premium after May 31st.  AFC receives the commission from the carrier in the 3rd week of June.  AFC then enters the statements into the advance commission program, applying earnings where appropriate.  AFC then audits those entries, posts the commissions to the agent accounts, and cuts checks.

AFC mails out monthly statements in the 3rd week of July.

Therefore, from the time the case is issued, or for issued business, where premium was due from the client, you must add 7 weeks before you can expect to see an entry on your commission statement from AFC.  For earned cases, this means that you will not see commission until AFC mails out the statements.  For advance cases, this means that you will have your commissions far before AFC will have received any monthly earnings from the Carrier. . .

This is the best systematic way that there is to make sure that all carrier statements received in a given month are entered into the AFC Commission program, and released to the correct writing agent or manager.

Once an agent sees the case on his/her statements, he/she can expect to see that posting every month, barring late payment by the client, closed cases, etc.

Premiums are posted EXACTLY as they are received from the Carrier. No Exceptions.

Where an agent's contract becomes inactive due to lack of production, that agent's outstanding balances will be moved to his/her Debit Balance account.  This includes both positive and negative charges.  An Inactive Agent may receive a balance due statement if the estimated earnings for that agent's block of business will not pay off the amount owed within Six (6) months from the date that the agent's contract becomes inactive.

AFC receives carrier commission statements throughout a given month. 

The cutoff period for entering in monthly commissions for AFC is the end of the 3rd week of any given month.

AFC posts Monthly Earnings after the end of the month.

Monthly Earnings are posted after the end of the month in which AFC receives the carriers' statements.  This means that the Carrier statement may be dated for April 30th, but AFC posts it on May 31st.  The statements are then mailed to the writing agents, along with checks where applicable, the 3rd week of June.

Advances are posted and mailed every week, on Thursdays.

Month-Ends are mailed the Thursday of every 3rd week of the month.