This big health insurance company relies heavily on insurance brokers to sell group policies to small and medium-size businesses, according to an IT pilot fish working there.

“While looking over some Cobol code, I came across a curious bit of logic, where a broker’s commission wasn’t calculated at the standard rate, but rather was input by the brokers themselves!” fish says.

“Only certain brokers had a special code to enable this logic. I stopped in at our CFO’s office — he had an ‘open door’ policy — to ask him why we allowed some brokers to calculate their own commissions.”

CFO explains that these “trusted brokers” either have high sales numbers or work in undermarketed areas, such as rural markets. Their contracts set their commission rate at 24.8 percent, and also specify that the brokers get to collect the premiums from customers, calculate and keep their commissions and send the rest to the company.

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