--- title: "What Is an Agency Agreement in Insurance? — Lapidar" url: https://getlapidar.com/glossary/agency-agreement/ description: "Agency agreement (producer agreement): the carrier contract that sets commission, notice of rate changes, authority and run-off after termination." last_modified: "Wed, 14 Oct 2026 08:43:11 GMT" source: getlapidar.com (HTML converted to Markdown at the edge) --- Glossary · Insurance agency commissions # Agency agreement An agency agreement, also called a producer agreement or agency-company agreement, is the written contract between a carrier and an independent agency that sets what the agency may sell and bind, how premium is handled, how and when commission is paid or changed, who owns the expirations and what happens when the relationship ends. By Lapidar, the team building it · October 14, 2026 · Also called producer agreement; agency-company agreement; agency contract ## What it means The [appointment](https://getlapidar.com/glossary/carrier-appointment/) is what the carrier files with the state; the agency agreement is the contract behind it. The Big “I” Office of the General Counsel publishes reviews of individual carriers’ agreements, and they read like a list of the clauses worth negotiating. On commission, its [review of a Utica National agreement](https://www.independentagent.com/wp-content/uploads/2021/10/Utica-Agency-Agreement-Review-January-2022-October-2021.pdf) says: “The Agent may wish to seek longer notice for commission changes, such as 90 days, and require that a reduction in commission will occur no more than once per year.” What it means for commission: the agreement, together with the [commission schedule](https://getlapidar.com/glossary/commission-schedule/) it points to, is the only document that says what you should have been paid. It decides whether commission is earned on written or collected premium, how [chargebacks](https://getlapidar.com/glossary/commission-chargeback/) work, whether you may deduct commission on agency-billed policies, and how long renewals are paid after a termination. When a statement and your expectation disagree, the agreement settles it. This page is general information, not legal advice; your agreement and your state’s law decide. Check the rate Work out what a line should have paid from premium and rate with the free commission calculator. Lapidar runs the same check across every line of your carrier statements. [Open the commission calculator](https://getlapidar.com/tools/commission-calculator/?from=glossary-agency-agreement). ## How it shows on a commission statement The agreement never appears on a statement, but its effects do: a new rate after a notified commission change, a renewal paid at a run-off rate, a line that stops after the [carrier terminates the agency](https://getlapidar.com/glossary/carrier-termination/). The check starts from the version of the agreement and schedule in force on the policy’s effective date, not the one in force today. ### In reconciliation, and what Lapidar does Lapidar does not read agency agreements. It uses the rates you enter as a commission schedule per carrier, line and new or renewal business, and checks each statement line against your book premium times that rate. Keeping the schedule in step with your current agreement is what makes those checks meaningful. ## Example **Example data: clauses an agency might pull from one invented agreement before checking statements.** | Clause | What it says | What to check on statements | | --- | --- | --- | | Commission | Schedule EX-SCH-3, 90 days’ notice of changes | Old rate until the notice period ends | | Agency bill | Agency deducts commission when remitting | Account current nets commission correctly | | Termination | Renewals paid for 12 months at the same rate | Run-off renewals still arriving, unreduced | | Chargebacks | Pro rata on returned premium | Chargeback = rate × return premium | ## Common mistakes to check - Checking statements against a rate from memory instead of the schedule the agreement points to. - Missing a notice of commission change, then treating the new rate as an error, or the old rate as correct. - Not keeping a signed copy of every version, so a run-off dispute has nothing to stand on. - Assuming one carrier’s termination and renewal terms apply to another carrier. ## Questions ### Is an agency agreement the same as an appointment? No. The appointment is the carrier’s authorization, filed with the state in many states. The agency agreement is the contract that sets commission, billing, authority and termination terms. ### Can a carrier change my commission under the agreement? Usually yes, with the notice the agreement requires. Big “I” contract reviews suggest asking for longer notice, such as 90 days, and limiting reductions to once a year. ### What should an agency negotiate in a producer agreement? Notice periods for commission changes and termination, ownership of expirations, run-off renewal terms, chargeback rules and any production requirements. The Big “I” publishes reviews of specific carriers’ agreements. ### Where do I find my commission rates? In the commission schedule attached to or referenced by the agreement, which may be updated more often than the agreement itself. ## Sources - Big “I” Office of the General Counsel, [Utica National Insurance Group Agency Agreement (January 2022)](https://www.independentagent.com/wp-content/uploads/2021/10/Utica-Agency-Agreement-Review-January-2022-October-2021.pdf), contract review, October 2021 (PDF). Retrieved October 14, 2026. - Big “I” Office of the General Counsel, [Hanover Agency Agreement Review](https://www.independentagent.com/wp-content/uploads/2022/02/Hanover-Agency-Agreement-Review-November-2021.pdf), November 2021 (PDF). Retrieved October 14, 2026. Lapidar is [commission reconciliation software for independent insurance agencies](https://getlapidar.com/), in its founding pilot. Related: [carrier appointment](https://getlapidar.com/glossary/carrier-appointment/). In this entry 1. [What it means](https://getlapidar.com/glossary/agency-agreement/#meaning) 2. [On a commission statement](https://getlapidar.com/glossary/agency-agreement/#on-statement) 3. [Example](https://getlapidar.com/glossary/agency-agreement/#example) 4. [Common mistakes](https://getlapidar.com/glossary/agency-agreement/#mistakes) 5. [Questions](https://getlapidar.com/glossary/agency-agreement/#faq) 6. [Sources](https://getlapidar.com/glossary/agency-agreement/#sources) All 95 terms, from account current to written premium. [Glossary A–Z](https://getlapidar.com/glossary/) Check every line against the schedule your agreement sets. [See a sample report](https://getlapidar.com/sample-report/?from=glossary-agency-agreement) ## Reconciling statements is the hard part. Check every line against the schedule your agreement sets. [See a sample report](https://getlapidar.com/sample-report/?from=glossary-agency-agreement), or read [how the founding pilot works](https://getlapidar.com/pilot/). [Open an account — founding pilot](https://app.getlapidar.com/signup?from=glossary-agency-agreement) [Open the commission calculator](https://getlapidar.com/tools/commission-calculator/?from=glossary-agency-agreement)