Insurance business and clawbacks

[Gemmab1]

I am a sole trader in the insurance business.

I receive clawbacks I am wanting to not do the business anymore. Im looking for advice on what happens to the clawbacks and how to get out of the industry?

 

[Lisa Thomas]

If you ceased trading when would the last clawback fall due to you?

 

[Gemmab1]

My clawbacks are ᗯITᕼIᑎ ᗩ 4 YEᗩᖇ ᑭEᖇIOᗪ

 

[Mark T Jones]

What does your contract say?

Also, why are people cancelling their policies - it’s not usually a big problem.

 

[Gemmab1]

I ᖇᑌᑎ ᗰY Oᗯᑎ ᗷᑌᔕIᑎEᔕᔕ ᔕO I ᗩᗰ ᗩ ᔕOᒪE TᖇᗩᗪEᖇ Oᖴ ᗰY IᑎᔕᑌᖇᗩᑎᑕE ᗷᖇOKEᖇ.

OᗷᐯIOᑌᔕᒪY ᔕOᗰE ᑕᒪIEᑎTᔕ ᗩᖇE GOIᑎG TO ᑕᗩᑎᑕEᒪ TᕼEᖇE IᑎᔕᑌᖇᗩᑎᑕE ᑭOᒪIᑕIEᔕ I ᗪOᑎT ᕼᗩᐯE ᗰᗩᑎY ᗷᑌT ᑭEOᑭᒪE ᑕᗩᑎᑕEᒪ ᖴOᖇ ᑎᑌᗰEᖇOᑌᔕ ᖇEᗩᔕOᑎᔕ TᕼEY ᑕᗩᑎT ᗩᖴᖴOᖇᗪ TᕼE ᗰOᑎTᕼᒪY OᑌTGOIᑎG ᗰᗩIᑎᒪY.

I ᒍᑌᔕT ᗪOᑎT ᗯᗩᑎT TO ᖇᑌᑎ ᗰY IᑎᔕᑌᖇᗩᑎᑕE ᗷᖇOKEᖇ ᗩᑎY ᗰOᖇE ᗷᑌT I ᗪOᑎT KᑎOᗯ ᕼOᗯ TO ᗯᗩᒪK ᗩᗯᗩY ᖴᖇOᗰ IT ᗩᑎᗪ ᗯᕼᗩT ᕼᗩᑭᑭEᑎᔕ ᗯITᕼ TᕼE ᑕᒪᗩᗯᗷᗩᑕKᔕ?

 

[Gemmab1]

OᗷᐯIOᑌᔕᒪY Iᖴ Iᗰ ᑎOT ᖇᑌᑎᑎIᑎG TᕼE IᑎᔕᑌᖇᗩᑎᑕE ᗷᖇOKEᖇ ᑎO ᗰOᖇE I ᗯOᑎT ᗷE ᔕEᖇᐯIᑕIᑎG ᗰY E᙭IᔕTIᑎG ᑕᒪIEᑎTᔕ ᔕO ᑕᒪIEᑎTᔕ ᗯIᒪᒪ ᑕᗩᑎᑕEᒪ ᗩᔕ TᕼEY ᑭᕼOᑎE ᗰE ᖴOᖇ ᕼEᒪᑭ ᗯITᕼ TᕼEᖇE ᑕᒪᗩIᗰᔕ.

I ᒍᑌᔕT ᗯᗩᑎT TO ᗯᗩᒪK ᗩᗯᗩY ᖴᖇOᗰ TᕼE ᗯᕼOᒪE ᗷᑌᔕIᑎEᔕᔕ

 

[Mark T Jones]

Again, what does your contract say? Ultimately you will almost certainly be personally liable for the clawback period

It’s rare for claw backs to be a major issue -typically it would suggest a degree of miss-selling or poor delivery by the insurer

If the latter is the case, you might have an argument to not honour clawback

 

[tony84]

You will have personal guarantees in place with the insurers. I do with mine.
I am a limited company and I am still liable for any clawbacks personally in the event my company can not pay.

If a claim is made and the policy pays out and then ends, you are not liable for any clawbacks. It is only if the customer cancels the policy or stops paying the premiums.

If the customer can not afford the monthly premium... why did you sell the policy to them in the first place? You can just flog a load of policies and then close down when they start getting cancelled.

In 7-8 years, I have only had 2-3 cancellations in the claw back period. I also used to be an account manager for a life insurance company and clawbacks really were quite rare, probably less than 5% for most companies. As Mark says, this should not be a major concern.