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The terms and conditions set forth in this brochure govern the Supplemental Compensation Plan. There will be no changes to the Supplemental Compensation Plan unless set forth in writing and signed by a Senior Vice President of MetLife.
Eligibility for payment under the Supplemental Compensation Plan requires the broker to be appropriately licensed and appointed and to comply with all applicable laws and regulations, including, without limitation, those that apply to disclosure of compensation. In addition, in order for the broker to be eligible for Supplemental Compensation with respect to any given customer’s business, the broker must be recognized by MetLife and the customer as Broker of Record. MetLife reserves the right to notify its customers of a broker’s eligibility to receive compensation under the Supplemental Compensation Plan and the amount of any payment made or to be made, and to obtain written customer authorization prior to making any payment.
MetLife reserves the right to change the terms of the Supplemental Compensation Plan or to discontinue the sale of any product. It is not MetLife’s practice to specifically factor Supplemental Compensation into the price of a customer’s group insurance plan. However, Supplemental Compensation is a component of MetLife’s Institutional Business distribution expenses and, like other expenses, is factored into the price structure of MetLife’s Institutional Business products.
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MetLife requires customer consent by means of the Customer Authorization Form in order to include a Zero Commission Coverage for qualification and/or payment purposes. MetLife will only pay Supplemental Compensation on Zero Commission Coverages with an effective date on or after January 1, 2009, provided MetLife receives a Customer Authorization Form by November 30, 2009, and MetLife recognizes the broker as the Broker of Record as of the effective date of the coverage. Both the broker and customer must sign the Customer Authorization Form.
If a customer submits a Customer Authorization Form to MetLife for the 2010 Supplemental Compensation Plan, it will remain in effect for subsequent MetLife supplemental compensation plans unless the customer notifies MetLife in writing of its intention to terminate the authorization. MetLife may provide annual notices to customers who have submitted the Customer Authorization Form describing changes to its supplemental compensation plan from the prior year.
The customer may terminate the authorization at any time. Termination of the authorization will take effect within thirty (30) days after notification is received by MetLife and no payments in relation to that customer’s premium will be made thereafter under any MetLife supplemental compensation plan. In addition, such customer’s business will not be counted for qualification purposes.
The Customer Authorization Form must be completed and submitted via U.S. Mail, overnight delivery service, fax, or e-mail to one of the following contact points below by November 30, 2009:
Supplemental Compensation will apply to the first billing date in 2010, after the date of receipt of the Customer Authorization Form by MetLife. MetLife will not consider the Customer Authorization Form to be received by MetLife until the form is received at one of the contact points listed above. If the form is submitted to another area of MetLife (for example, a MetLife sales office), MetLife will not consider the form to be received until it is received by MetLife at one of the contact points listed above, and the business may not be counted for Supplemental Compensation purposes. Any Customer Authorization Forms received by MetLife at one of the contact points listed above after November 30, 2009, will apply to payment only and will not affect the broker’s Supplemental Compensation percentage for the 2010 Supplemental Compensation Plan. Click here to download a PDF version of the form now.
Compensation paid under the MetLife Supplemental Compensation Plan is an overhead expense of MetLife and MetLife does not add the cost of Supplemental Compensation to the price of a customer’s MetLife product except as an allocation of overhead expense. The price of a MetLife product and the impact broker compensation may have on price or premium depends on a variety of factors, and is determined solely by MetLife. MetLife reserves the right to exclude from its supplemental compensation plans any business where a broker may have represented that broker compensation paid under MetLife’s supplemental compensation plans with respect to a customer’s MetLife coverage will reduce the price or premium rates with respect to the customer’s coverage.
EXAMPLE:
Broker A and Broker B each have a book of business with $12 million, which includes new business and inforce business. For each broker, the only new business in 2009 is one Zero Commission Coverage effective March 1, 2009, with $1.5 million in New Business Premium. Broker A submits the Customer Authorization Form to MetLife on September 1, 2009, and Broker B submits the form to MetLife on January 5, 2010. MetLife will accept the Customer Authorization Form submitted by Broker A and the coverage subject to the Customer Authorization Form will result in $1.5 million in New Business Premium being counted for Supplemental Compensation qualification purposes. Broker A’s Supplemental Compensation percentage will be 2%. Since MetLife will not accept the Customer Authorization Form submitted by Broker B, the $1.5 million is not counted towards qualification and Broker B will not qualify based on New Business Premium. Instead, Broker B will qualify based on Inforce Premium and his Supplemental Compensation percentage will be 1%. |
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Your MetLife representative is available to answer any questions. Brokers may also contact MetLife’s dedicated Broker Service Center at the number below.
When contacting MetLife by fax or e-mail, please state the topic of your request in the subject line and include pertinent details in the body of the message. Information needed to respond to your request may include the broker’s name, address, e-mail address, phone number, broker number, customer name and coverages.
Working with MetLife, you can be assured of MetLife’s commitment to disclosure of information about MetLife’s compensation plans to customers and potential customers. Certain customer and prospect communications will include a compensation notice similar to the notice below explaining to customers and prospects how MetLife compensates brokers.
INTERMEDIARY COMPENSATION NOTICE
MetLife enters into arrangements concerning the sale, servicing and/or renewal of MetLife group insurance and certain other group-related products (“Products”) with brokers, agents, consultants, third-party administrators, general agents, associations, and other parties that may participate in the sale, servicing and/or renewal of such Products (each an “Intermediary”). MetLife may pay your Intermediary compensation, which may include base compensation, supplemental compensation and/or a service fee. MetLife may pay compensation for the sale, servicing and/or renewal of Products, or remit compensation to an Intermediary on your behalf. Your Intermediary may also be owned by, controlled by or affiliated with another person or party, which may also be an Intermediary and who may also perform marketing and/or administration services in connection with your Products and be paid compensation by MetLife.
Base compensation, which may vary from case to case and may change if you renew your Products with MetLife, may be payable to your Intermediary as a percentage of premium or a fixed dollar amount. In addition, supplemental compensation may be payable to your Intermediary. Under MetLife’s current supplemental compensation plan, the amount payable as 11 supplemental compensation may range from 0% to 2.25% of premium. The supplemental compensation percentage may be based on: (1) the number of Products sold or inforce through your Intermediary during a prior one-year period; (2) the amount of premium or fees with respect to Products sold or inforce through your Intermediary during a prior one-year period; and/or (3) a fixed percentage of the premium for Products as set by MetLife. The supplemental compensation percentage will be set by MetLife prior to the beginning of each calendar year and it may not be changed until the following calendar year. As such, the supplemental compensation percentage may vary from year to year, but will not exceed 2.25% under the current supplemental compensation plan.
The cost of supplemental compensation is not directly charged to the price of our Products except as an allocation of overhead expense, which is applied to all eligible group insurance products, whether or not supplemental compensation is paid in relation to a particular sale or renewal. As a result, your rates will not differ by whether or not your Intermediary receives supplemental compensation. If your Intermediary collects the premium from you in relation to your Products, your Intermediary may earn a return on such amounts. Additionally, MetLife may have a variety of other relationships with your Intermediary or its affiliates that involve the payment of compensation and benefits that may or may not be related to your relationship with MetLife (e.g., consulting or reinsurance arrangements).
More information about the eligibility criteria, limitations, payment calculations and other terms and conditions under MetLife’s base compensation and supplemental compensation plans can be found on MetLife’s Web site at www.whymetlife.com/brokercompensation. Questions regarding Intermediary compensation can be directed to ask4met@metlifeservice.com, or if you would like to speak to someone about Intermediary compensation, please call (800) ASK-4MET.
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For any new business (including new customers or new coverages added for an existing customer) having an effective date on or after January 1, 2008, MetLife requires evidence of a customer’s receipt of MetLife’s compensation notice prior to paying Base Compensation, Supplemental Compensation or service fees.
Beginning in 2009, MetLife will send to all group insurance customers an annual statement indicating all compensation MetLife paid to the customer’s Broker of Record in the prior year. MetLife currently provides such information to group customers for whom ERISA requires such information to be provided.
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Qualification Period
New business with an effective date between October 1, 2008, and September 30, 2009
Inforce Premium as of September 30, 2009
Customer Authorization Form
Completed and received by MetLife by November 30, 2009 – for qualification and payment purposes
Completed and received by MetLife after November 30, 2009 – will apply to payment only
Notification of Qualification
Estimate of Qualification – intended to be mailed in November 2009 to brokers qualifying for 2010 Supplemental Compensation
Broker book of business corrections – due to MetLife by November 30, 2009
Official Notification of qualification – mailed in January 2010 to brokers qualifying for 2010 Supplemental Compensation
In addition to the defined terms below, some terms may be defined where they first appear in this brochure.
- “Annualized Billed Premium” – the billed premium amount during the Qualification Period,
which is calculated as a monthly average and multiplied by twelve.
EXAMPLE:
Assume a January 1 effective date with an initial bill due on January 1. The total billed premium ($6,100) is divided by the total number of bills (7) to calculate an average monthly bill ($871.43). The average bill is multiplied by 12, which provides the Annualized Billed Premium ($10,457.16). |
| Billing Month |
Estimated Monthly
Billed Amount |
| January |
$1,000 |
| February |
$900 |
| March |
$1,100 |
| April |
$1,000 |
| May |
$800 |
| June |
$700 |
| July |
$600 |
| Total |
$6,100 |
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- “Broker of Record” – the broker recognized as broker of record by both the customer and MetLife for the customer’s eligible group insurance coverage.
- “Coverage Grouping” – one or more coverages or group products or services marketed by MetLife that are eligible for qualification and payment under the Supplemental Compensation Plan.
- “Division Number” and “Experience Number” – terms used internally by MetLife. A Division Number or Experience Number may be used to identify sub-groups within a customer. For example, a customer may choose to have one sub-group of its employees covered for basic life insurance benefits under one Experience Number and another sub-group of its employees covered for basic life insurance benefits under a different Experience Number. MetLife reserves the right to determine in its sole discretion whether to permit multiple Division Numbers or Experience Numbers under one customer.
- “Inforce Premium” – the Annualized Billed Premium for customers whose group coverages are in force on the last day of the Qualification Period. Inforce Premium does not include premium for Zero Commission Coverages where MetLife has not received a signed Customer Authorization Form by the deadline set forth in this brochure. If MetLife receives a Customer Authorization Form by the deadline set forth in this brochure for a Zero Commission Coverage, then the Zero Commission Coverage will be included in Inforce Premium.
- “Opt-out” – the act of electing to exclude a broker’s Tax ID, customer, Division Number, Experience Number and/or Coverage Grouping from participating in the Supplemental Compensation Plan. This can be accomplished by contacting the Broker Service Center.
- “Received and Earned Premium” – the premium paid by a customer to MetLife and allocated by MetLife to loss experience, expense and profit for the customer’s case, and used to calculate base compensation.
- “Tax ID” – an individual’s social security number or a firm’s taxpayer identification number.
- “Zero Commission Coverage” – group coverage where the Broker of Record is not receiving base compensation from MetLife, whether or not MetLife or the customer pays any amount to that broker. Both the broker and customer must sign the Customer Authorization Form to include a Zero Commission Coverage in the Supplemental Compensation Plan for purposes of determining eligibility and Supplemental Compensation payable. Once a Customer Authorization Form is completed and submitted to MetLife for the 2010 Supplemental Compensation Plan, it will remain in effect for subsequent MetLife supplemental compensation plans unless a customer notifies MetLife in writing of its intention to terminate the authorization.
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