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MetLife pays Supplemental Compensation at a single Tax ID level. Payment is calculated in the following manner:
See the examples below.
Premium Capping
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MetLife will pay Supplemental Compensation on a maximum of $10 million of Received and Earned Premium (the “Cap”) per customer; the Cap applies to the aggregate of all Received and Earned Premium per customer.
If more than one broker is eligible for Supplemental Compensation with respect to one customer where more than $10 million of Received and Earned Premium is paid by such customer, MetLife may apply the Cap per customer and per broker so long as the brokers are not affiliated or under common ownership or control. Before making any Supplemental Compensation payment in that circumstance, MetLife may require the brokers to certify in writing that they are not affiliated or under common ownership or control.
If a MetLife customer acquires another company that does not have eligible MetLife group products, MetLife will apply the Cap to the Received and Earned Premium from the MetLife customer separately from the Received and Earned Premium from the acquired company for payments under the 2010 Supplemental Compensation Plan. MetLife reserves the right to consider the MetLife customer and the acquired company to be one MetLife customer in relation to any future supplemental compensation plans and to apply one cap to the Received and Earned Premium from the MetLife customer and the acquired company.
MetLife reserves the right to obtain written customer authorization before making any Supplemental Compensation payment and to determine in its sole discretion how the Cap is applied.
EXAMPLE:
Assume a broker qualified for 2% Supplemental Compensation. The broker is the Broker of Record for Company A and MetLife’s Received and Earned Premium from Company A is $15 million for Life and $20 million for STD Insurance. The $10 million cap is applied and the broker is eligible for a Supplemental Compensation payment for Company A of 2% of $10 million, even though the total amount of Received and Earned Premium is $35 million. |
| Products Sold |
Received and Earned Premium |
| Life |
$15M |
| Short Term Disability |
$20M |
| Total |
$35M |
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| Capped Total Amount |
$10M |
| Supplemental Compensation Percentage |
2% |
| Supplemental Compensation Annual Payment |
$200,000 |
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Note that here and under all other circumstances, the broker will not be entitled to Supplemental Compensation on and after the date the broker is deemed by MetLife or the customer to no longer be the Broker of Record.
ASO / PAR Cases
For ASO and Participating (“PAR”) cases, MetLife will apply the full ASO fee or the PAR premium amount towards qualification. For the Supplemental Compensation payment calculation, however, ASO fees and PAR premium are reduced to 25% of the actual ASO fees and PAR premium prior to applying the applicable Supplemental Compensation percentage.
EXAMPLE:
Assume a broker qualified for 2% Supplemental Compensation. The broker is the Broker of Record for Company A and MetLife’s Received and Earned Premium from Company A is $15 million for Life and $20 million for STD Insurance. The $10 million cap is applied and the broker is eligible for a Supplemental Compensation payment for Company A of 2% of $10 million, even though the total amount of Received and Earned Premium is $35 million. |
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Dental ASO |
LTD PAR |
| MetLife ASO Fee/ PAR Premium |
$50,000 |
$25,000 |
| Eligible ASO Fee/PAR Premium Percentage |
25% |
25% |
| Amount Eligible for Supplemental Compensation |
$12,500 |
$6,250 |
| Supplemental Compensation Percentage |
2% |
2% |
| Total Supplemental Compensation Payment for 2010 |
$250 |
$125 |
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