New tax rules for cash value accumulations in whole life policies may have had a silver lining: They sparked a stampede in year-end sales for many MGAs.
Qualified Financial Services CEO Kevin Cott says that 2016 was his most profitable year since QFS was founded in 1997. “Last year, we had twice as many advisors than ever before, doing more than $100,000 of first year commissions.”
BridgeForce Financial Group CEO Michael Williams also reports record growth in 2016. He also attributes this strength to the tax changes which took effect on Jan. 1.
“There’s been fire sales. I heard that one carrier worked on December 31, from 3:00 to 9:00 pm. They wanted the last policies out the door. We have to continue that momentum in the first quarter of 2017, and then through the year. It’s not the first time we see movements like this in the industry. Remember four years ago when carriers increased the price of the level cost of insurance?” he recalls.
Yan Charbonneau, CEO of MGA Groupe AFL, says that some insurers handled the year-end rush smoothly. “Sun Life Financial sold a high volume of participating whole life products. Most insurers had set the deadline of October 15 for receiving proposals with all the pricing information, to be able to issue a policy under the 2016 rules in time for January 1, 2017. Sun Life stretched the deadline until December 31, 2016 by launching a provisional term whose maximum insurance amount ranged up to $10 million. Everyone sold it. I sent a proposal on December 20, and it was all complete. The policy was issued on time,” Charbonneau confirms.