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A broker may qualify for Supplemental Compensation based on:
New Business Premium is Annualized Billed Premium for new coverages with an effective date during the Qualification Period. Qualification is calculated using a single Tax ID. Multiple Tax IDs will not be aggregated for qualification purposes. Each broker will be placed into a Tier corresponding to a particular level of Supplemental Compensation to be paid. MetLife will establish a broker’s Tier by December 31, 2008. Once established, the broker’s Tier cannot be changed for the 2009 calendar year. Brokers who qualify for 2009 Supplemental Compensation will receive an estimated Tier notification in November 2008. Each broker must submit any corrections regarding its book of business to MetLife by November 30, 2008, in order for an adjustment, if appropriate, to be made prior to December 31, 2008.
A broker will be placed in only one Tier. If the New Business Premium, new Coverage Grouping count, or Inforce
Premium results in conflicting Tier qualifications, the broker will receive only the Supplemental Compensation at
the highest paying Tier percentage4. New business and Inforce Premium Tiers cannot be combined.
NEW BUSINESS QUALIFICATION
A broker’s Tier is determined under a single Tax ID by either the New Business Premium or the number of new Coverage
Groupings sold.
If the number of enrolled lives for a coverage increases or decreases for an existing customer, there will be no impact to the New Business Premium qualification calculation or the new Coverage Grouping count qualification calculation. Table 1
For a given customer, a broker will receive a single Coverage Grouping count for each new Coverage Grouping. The Broker of Record on the date the Qualification Period ends will receive full qualification credit for New Business Premium or Coverage Grouping counts, and there is no prorating. If two or more brokers split base compensation, only the New Business Premium will be apportioned. This apportionment will be determined by MetLife in the same manner as the base compensation apportionment. There is no limit on the amount of New Business Premium for qualification purposes. However, a customer who chooses to Opt-out of the Supplemental Compensation Plan will not have its business counted for any broker for qualification purposes and no Supplemental Compensation will be paid in relation to that customer’s premium. In addition, a decision to Opt-out of the 2009 Supplemental Compensation Plan cannot be changed after September 30, 2008.
EXAMPLE:
During the Qualification Period, the broker has New Business Premium of $1.45 million that consists of 65 Coverage
Groupings. The broker qualifies for Tier 2 and a 2.00% Supplemental Compensation payment of Received and Earned
Premium for the broker’s total book of business in 2009.
EXAMPLE:
During the Qualification Period, a broker has New Business Premium of $900,000 which consists of 15 Coverage
Groupings. The broker qualifies for Tier 2. The broker will receive a 2.00% Supplemental Compensation payment
of Received and Earned Premium for the broker’s total book of business in 2009.
INFORCE PREMIUM QUALIFICATION
For those brokers who do not qualify for payment based on new business (See Table 1 on page 4), there is another
way to qualify for the Supplemental Compensation Plan. A broker qualifies for an Inforce Premium Tier if the
broker’s total book of business is $5 million or more of Inforce Premium as of the last day of the Qualification Period (See Table 2 below).
Table 2
The Broker of Record on the day the Qualification Period ends will receive full qualification credit, and there will be no prorating of the qualification credit. The Inforce Premium determines the broker’s Tier.
EXAMPLE:
During the Qualification Period, a broker writes new business with $700,000 of New Business Premium and five
Coverage Groupings. The broker would not qualify for Supplemental Compensation based on new business. However,
the broker has $7.5 million of Inforce Premium as of September 30, 2008, which includes the New Business Premium
of $700,000. The broker will receive Supplemental Compensation of 0.50% of Received and Earned Premium for the
broker’s total book of business in 2009.
4 A broker may limit its eligibility under the Supplemental Compensation Plan to the percentage associated with Inforce Premium qualification only. Written notification of the broker’s desire to have this limitation apply must be received by MetLife (see contact information on page 10 of this brochure) on or before November 30, 2008. |
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