Assurant Health, headquartered in Milwaukee, WI, will no longer be paying agent commission on individual health insurance policies sold in Florida, Nevada, Georgia, Indiana, Michigan, Texas, and Pennsylvania.
Assurant claims this change is not related to the medical loss ratio requirements within the Affordable Care Act which requires insurance companies to spend 80-85% of premiums collected on claims. This ratio includes agent compensation making it more difficult for insurance carriers to continue payments to agents with a defined profit margin.
75% of brokers surveyed by the National Association of Insurance and Financial Advisors reported a decrease in commission payments since the medical loss ratio went into effect on January 1, 2011 and nearly a quarter of those surveyed said they have reduced services to their clients as a result of that decrease. Assurant is the first carrier to discontinue commissions but agents are likely wondering who’s next.