Life Agent Administration System Upgrade

North American recently released a bulletin announcing the upcoming system upgrade of our agent administration system for our life insurance product line. In that communication, we referenced how we would provide additional details on the project and what changes you can expect.


Listed below, you will find details related to the changes that may be important to you and your business. For most topics, you can click on the Learn More hyperlink to be routed to a more detailed description. If you have any questions regarding these changes or this communication in general, you can reach Agency Services directly at the contact information below:


Contracting: NAContracting@sfgmembers.com
(866) 322-7068, Option 1


Commissions: NALifeCommissions@sfgmembers.com
(877) 872-0757 x 32170

New agent code

All of North American's life division agents and agencies will be assigned new agent codes to conduct life insurance business. These new codes will replace your current code and will follow you through the entirety of your relationship with North American.

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Flexible compensation payment frequency

North American's life division will now offer options on the frequency of your compensation payments. While initially you will be defaulted to weekly, agents and agencies will now have the option to receive compensation on either a daily, weekly, or monthly basis. Beginning May 4th, you can request payment frequency changes through email to our Commissions Team via NALifeCommissions@sfgmembers.com.

Consolidated statements and payments

To provide a single view for all of your compensation activity, commission payments from North American's life division will now be reported through a single consolidated commission statement. All of your compensation will pay to a single bank or credit union account of your choice.

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Asset-Based Trails ("Trails")

North American's life division will now pay asset-based trails on a monthly basis. Trails will be payable beginning in the 13th month of each eligible policy and will continue annually in the same month for all future anniversaries. The Trails will also be included once a month in your regularly scheduled commission cycle and include policy level detail.

Learn more

Taxable earnings

North American's life division is simplifying how we account for earnings received by corporations and their officers who also hold separate agent codes. Additionally we are making updates to our method of reporting for annualized compensation.

Learn more

Agent inforce correspondence on the web

North American's life division will move agent inforce correspondence content exclusively to our website, where you can access it 24/7. To ensure you receive future copies of this important correspondence, please update your notification settings on our agent website.

Learn more

Agent validation

Our upgraded system will ensure all parties are compliant on every sale. All agents must maintain the appropriate licenses and appointments in order to receive commissions on any life insurance sales.

Learn more

Statement changes for downline agents

Compensation arrangements between an upline and their Licensed Only Agents (LOAs) are complex and routinely change as the business partnership matures. We've found that many times the expected commissionable rate shown on our statements does not meet the needs of your business.

 

LOAs will continue to receive their compensation directly from their upline agency as they do today. North American's life division will no longer provide a commissionable percentage on the upline's statement to facilitate the payment of their licensed only agents.

Contract level structure

North American's life division is transitioning to a new contract level structure that will provide further consistency within our contract levels and compensation schedules.

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Policy mailing

At some MGAs, agent correspondence including Policy Mail, has been delivered to the MGA for review and redistribution. On May 1, North American will only send policies directly to the writing agent for expedited distribution to the client.

New agent code

All of North American's life division agents and agencies will be assigned new agent codes to conduct life insurance business. These new codes will replace your current code and will follow you through the entirety of your relationship with North American.

 

Agent codes will now be permanent, regardless of changes that may occur to your agent contract including reporting relationships and compensation. As long as your contract status remains active with the company, your new life division agent code will remain unchanged. Your unique agent code will be emailed to you in early April. This new agent code is only for your life insurance business and will not affect any annuity codes or business. Please use this new code on any documents, including New Business and Policy Change policy applications, starting May 1, 2020.

 

Some additional points of reference:

  • Based on your original contract date, your new code may be similar to the code you use today or one you have used previously.
  • For agents with multiple active agent codes today, you will receive a new agent code that replaces each of your current active codes. For your convenience, the new codes will contain a similar letter/number structure. You will receive a distinct email communication for each agent code.
  • Update your agent code within iPipeline to avoid delays in processing e-Applications.
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Consolidated statements and payments

To provide a single view for all of your compensation activity, commission payments from North American's life division will now be reported through a single consolidated commission statement. All of your compensation will pay to a single bank or credit union account of your choice.


Additional points for consideration:

  • All life insurance compensation the agent receives from North American's life division will be reported in a single, unified commission statement. This will consolidate compensation earned under multiple agent codes.
  • Compensation statements will continue to be found on North American's life division website. Once you log in, go to My Business > Producer Profile. Select the drop-down arrow to the left of Summary and select Statements & Correspondence.
  • We will continue to offer downloadable statements so you can easily import your commission data into Excel or your accounting software.
  • To ensure that we have the most accurate EFT information, please login to www.northamericancompany.com and validate your current bank information.
    • Select the My Business tab at the top and click on the Producer Profile link
    • Confirm that you are on your current, active life code by viewing the Summary page
    • To view your EFT information, select the financial option from the drop down menu next to Summary.
    • You can click on the “unlock” icon next to the Bank Account Number to view.
    • If you have more than one bank account associated with your Life business, please contact our agency services team to choose one primary account.
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Annuity Maximization: Consumer video

Asset-based trails ("Trails")

In our current process, North American's life division pays Trails to its agents on an annual basis, each January, based on the cash value of eligible policies as of December 31 the prior year. Eligibility for this form of trail compensation is only available after a policy has met its first anniversary and is active on that following calendar year end.

 

Because of this, eligible policies written in 2019 would pay Trails in January of 2021 (23 months later), even if the policy written in 2019 was written in January of that year.

 

North American's life division will now pay Trails on a monthly basis. Trails will be payable beginning in the 13th month of each eligible policy and will continue annually in the same month for all future anniversaries. The Trails will also be included once a month in your regularly scheduled commission cycle and include policy level detail. Please see the example below.

  Former Process New Process
Policy issued 8/1/2019 8/1/2019
Policy anniversary 8/1/2020 8/1/2020
First payment 1/1/2021 9/1/2020

In order to support the transition to this enhanced payment timing, policies paying in the first twelve months after implementation of this change will pay on a prorated basis prior to resuming standard yearly payment on the policy's second anniversary in 2021. On December 31st, 2019, all policies that have already met their first anniversary will generate a full annual payment. This will close out our last calendar year end process. Upon implementation of our system upgrade in May 2020, all policies that have reached their first anniversary between January 2020 and April 2020, will receive a prorated trail. Going forward, any policies that reach their anniversary after April 2020 will be subject to a proration and is demonstrated on the chart below.

Policy Anniversary Date Pay Date Proration Amount
December 2019 January 2020 12/12 (No Proration)
February 2019 May 2020 2/12 (Prorated)
July 2019 August 2020 7/12 (Prorated)
June 2020 July 2021 12/12 (No Proration)
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Taxable earnings

North American's life division is simplifying how we account for earnings received by corporations and their officers who also hold separate agent codes.
Additionally we are making updates to our method of reporting for annualized compensation.


For Corporations & Officers

Currently, when a Principal Writing Agent is contracted to their corporation, commissions are generated under the officer's agent code. In a second step, North American's life division then transfers the tax liability to the corporation. In May, each officer will report as a Principal Writing Agent on policies written under the contract hierarchy, yet commissions will generate only under the corporation's agent code. This change will improve transparency as to which entity is responsible for the earnings. This will also simplify the commission reporting process as detail will only display on the statement for the corporation where the earnings are paid.


For Annualized Policies

North American will implement a change to its method of reporting taxes for annualized compensation. Currently, when compensation is annualized to North American's life division agents, the taxes are reported on the full annualized payment. Taxes for annualized compensation will now be reported as they are earned.

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Agent inforce correspondence on the web

In May, all agent copies of inforce policy correspondence (statements, grace notices, lapse notices, letters, etc.) will be kept on the website and made available to you whenever you need them. We have integrated notification technology on our website that can alert you via email when a piece of client correspondence is being mailed, thus giving you a preview of the letter the customer will receive. To ensure you continue to receive notifications of inforce correspondence, please review your website access and sign up for notifications. review your website access and sign up for notifications.


After May 1st, copies of correspondence can only be obtained online at www.northamericancompany.com.

  • This section of the website can be viewed by logging in - selecting “My Business” on the top of the webpage and then selecting “Inforce Correspondence” within the dropdown.
  • Search results listing will display up to 200 documents from the last 30 days. A search can be completed on the same page for specific correspondence types, date ranges, or policy numbers.
  • In the search tool, additional correspondence types have been created to make identifying the correspondence that you are looking for a simple process.
  • Notifications and alerts can be established for correspondence and other policy events by selecting “My Business” on the top of the webpage and then selecting “Notifications” within the menu. View step-by-step instructions for setting up notifications.


The following are some other notable benefits of electronic copies of correspondence:

  • Reduction in paper that is sent to your office that needs to be sorted by you or your staff.
  • Elimination of the mailing delay that exists today. Electronic versions will be available to you before they are mailed to your client.
  • Easy access to inforce correspondence for each of your policies will be available for viewing online.
  • Easy navigation as correspondence categories can be selected and documents can be viewed by document type.


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Agent validation

Our upgraded system will ensure all parties are compliant on every sale. All agents must maintain the appropriate licenses and appointments in order to receive commissions on any life insurance sales. Several processes will be enhanced to ensure agent and client information continues to be properly validated in accordance with all state regulations.


Important notes about agent validation rules with North American's life division:

  • For new policy applications, we validate that the agent writing the application and all upline agent/agencies in the hierarchy hold active licenses (and appointments where applicable) in the policy application state. Inactive or missing state licenses or appointments for an upline agent/agency where one is required will not hold up policy issuance; however, it will prevent the upline from receiving commission.
  • For agent of record changes, North American's life division will validate the agent license against the client's new state of residence if the client requests a change after they have moved to a new state. This differs from our current process, which validates the license against the original application signed state.
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Contract level structure

North American's life division is enhancing the contract level structure for our agent and agency base. With the growing business climate of acquisitions, mergers, and transfers, North American is introducing a new single channel contract structure to replace the current model. This will provide expanded level options and increased flexibility. North American will provide additional information regarding new contract levels in April. These new levels are for our life division only and has no impact on your North American annuity business.

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Sammons FinancialSM is the marketing name for Sammons® Financial Group, Inc.'s member companies, including North American Company for Life and Health Insurance.® Annuities and life insurance are issued by, and product guarantees are solely the responsibility of, North American Company for Life and Health Insurance.


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FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.

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