Chubb Life NZ says its new system of calculating commission clawbacks will be beneficial for everyone.
Last week Chubb Life announced that clawbacks, which are currently calculated as a percentage of the total upfront commission paid based on the number of premiums a customer has paid over a 24-month period, would now be calculated based on the number of months elapsed since the start date of the new policy or benefit (see: Change to How Commission Clawbacks Calculated).
A Chubb Life NZ spokesperson told Riskinfo that for advisers, the change means there’s more transparency around the clawback period and for the insurer it means it can automate processes and simplify calculations.
“Our current method calculates clawbacks based on the number of premiums paid over a 24-month period. However, this number can be difficult to determine if payment frequency is not monthly and is weekly or fortnightly.
…This change will make it fairer for advisers and their customers…
“For example, if a customer decided to cancel their policy after nine months, their adviser may be subject to a larger clawback than expected, depending on how frequently their premium was paid in the period from commencement.”
The spokesperson says that starting from October 20, clawbacks will be calculated based on the number of months from the start of a policy.
“This change will make it fairer for advisers and their customers and easier for our people to assess.”