Glossary · Insurance agency commissions
Commission schedule
A commission schedule is the carrier’s table of rates it pays your agency, usually by line of business and new vs renewal, sometimes by state or program.
What it means
The schedule is usually an exhibit to the agency agreement. It is the yardstick for every rate on every statement, which makes it the single most useful document in commission checking and, in many agencies, the hardest one to find.
Carriers can typically change schedules with notice, as the agency agreement allows. When a change takes effect, it matters whether the new rate applies to policies effective after a date, to renewals after a date, or to transactions processed after a date. The notice should say; if it doesn’t, ask.
How it shows on a commission statement
The schedule itself never appears on a statement. What appears is the rate actually applied, or just the commission amount. Your job is to compare the applied rate with the schedule rate for that line of business and transaction type. If the statement shows no rate, divide commission by premium.
Example
- Business owners policy, renewal premium
- $3,200.00
- Commission on statement
- $448.00
- Applied rate (448 ÷ 3,200)
- 14%
- Schedule rate, BOP renewal
- 15%
- Expected commission
- $480.00
- Short
- $32.00
Common mistakes to check
- Working from an old schedule after a mid-year change.
- Missing state or program exceptions buried in the schedule’s footnotes.
- Applying the new business rate to a rewrite the carrier treats as a renewal, or the reverse.
- Keeping the schedule only in someone’s inbox. Store it where whoever checks statements can find it.