Glossary · Insurance agency commissions
Commission reconciliation
Commission reconciliation is checking each line of a carrier’s commission statement against your records and schedule for missing or wrong payments.
What it means
A full reconciliation works in both directions. From the statement: does every line match a policy, the right premium and the contracted rate? From the book: did every renewal, endorsement and new policy that was due actually appear? The second direction is the one most often skipped, and the one that finds missing money.
Differences are not all errors. Timing, rounding and transactions done outside the AMS explain many of them. What’s left goes on a list to raise with the carrier, and stays there until the correction arrives.
How it shows on a commission statement
The statement is the input. The output is a result for each line (matched, short, over, duplicate, unmatched) plus a list of expected items that never appeared.
Example
| Policy | Paid | Expected | Result |
|---|---|---|---|
| EX-18011 | 276.00 | 276.00 | Matched |
| EX-18024 | 168.00 | 192.00 | Short 24.00 |
| EX-18024 | 168.00 | 0.00 | Duplicate |
| EX-18040 | 310.00 | Missing |
Common mistakes to check
- Reconciling the total only.
- Starting only from the statement, which can never show a missing line.
- Raising discrepancies and not checking that the correction arrived.
- Doing it once a quarter, so errors are three statements deep before anyone looks.