Legal & General reintroduces commission on authorisation for protection products

Legal & General has announced changes to its commission structure for protection policy sales, returning to the commission on policy authorisation model following feedback from its advisers and partners.

Starting May 30, advisers will be paid commission with immediate effect of the policy start date of a customer’s protection policy rather than upon the successful collection of a first direct debit payment.

The insurer said the decision to reverse the commission on first premium system had been taken to improve the cashflow positions of adviser firms in the face of difficult economic conditions over the past 18 months. However, commission on first premium will still be an option for firms that wish to remain on this payment method.

“After implementing the changes to our commission structure in 2021, moving from commission on policy authorisation to commission on first premium, we continually and actively consulted with our partners and firms,” Julie Godley (pictured), director of intermediary at Legal & General Retail, said. “While some have benefitted from the changes, others have told us that the decision created challenges, especially in the current economic environment.

“It’s important to pursue changes that improve industry best practice, but the timing needs to be right. Therefore, we feel the correct response is to reinstate commission on policy authorisation, while still giving those that wish to stay on commission on first premium the option to do so.”

Godley added that they are continually listening to their intermediary partners “with a willingness to take action” to ensure that they provide the best service, processes, and solutions for advisers and partners.