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disability of the debtor, depending on the type of policy. Prior
to the formation of AFLIC, petitioner employed licensed insurance
agents who sold insurance policies underwritten by outside
insurance companies. Petitioner was not and never has been
licensed under Mississippi law as an insurance agent; it has
always employed licensed agents who sold the insurance. Some
portion of the premiums from these sales was remitted to
petitioner as commissions.
After the formation of AFLIC, petitioner offered only AFLIC
credit insurance to its customers. Petitioner required all of
its branch managers to acquire a license to sell the insurance.
If a customer chose to purchase insurance, then the premiums were
added to the amount of the loan. Petitioner would then remit the
entire premium amount to AFLIC. AFLIC would not pay the licensed
branch managers or petitioner commissions or other compensation
for selling AFLIC insurance. Petitioner, however, would pay
bonuses to its licensed branch managers based on the amount of
insurance each manager sold.
AFLIC sells credit insurance to debtors of other creditors
besides petitioner through agents who are not employees of
petitioner. AFLIC pays these other agents sales commissions,
usually between 45 and 65 percent of the premium.
AFLIC has no employees or offices. It does not advertise.
It pays another company to do its tax returns, compute its
reserves, and do its actuarial work.
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Last modified: May 25, 2011