Glossary · Insurance agency commissions
Volume requirement
A volume requirement, or production minimum, is a level of premium (written, earned or new business) that a carrier expects an agency to place with it, either to get or keep an appointment or to qualify for contingent or bonus commission.
What it means
Carriers set volume requirements in the agency agreement, a separate production or profit-sharing addendum, or informally in reviews of the agency. They are one reason smaller agencies join networks: IA Magazine’s Should You Join an Independent Agency Alliance? says members generally enjoy “higher income potential due to the enhanced volume of the alliance’s aggregated premium, which provides greater eligibility for profit sharing and expanded access to carriers and vendors.”
What it means for commission: a volume requirement rarely changes the rate on a single policy, but it can decide whether the agency receives a contingent commission at all, and missing it for long can put the appointment at risk. Which premium counts matters: written or earned, new business only or all, one line or the whole book, and whether business placed through an aggregator counts toward the agency or the aggregator.
How it shows on a commission statement
Statements do not show the requirement, but they are the raw material for checking it. The premium printed on a year of statements, less cancellations and return premium, is the closest independent check on the carrier’s own volume figure in a bonus worksheet.
In reconciliation, and what Lapidar does
Lapidar does not track production against carrier targets. It checks that each statement line pays the commission your book and schedule say is due; a premium figure on the statement that differs from your book is shown on the line so you can correct one or the other.
Example
- Invented requirement: written premium in the year
- $500,000.00
- Written premium per carrier worksheet
- $486,200.00
- Written premium summed from the agency’s statements
- $503,900.00
- Difference to explain before accepting the worksheet
- $17,700.00
Common mistakes to check
- Not knowing whether the requirement is measured on written or earned premium.
- Assuming business written through a network counts toward your own requirement.
- Accepting the carrier’s volume figure in a bonus worksheet without comparing it to your statements.
Questions
What happens if an agency misses a carrier’s production minimum?
It depends on the agreement. Commonly the agency does not qualify for that year’s contingent commission; some carriers review or end appointments that stay below expectations.
Do volume requirements change my commission rate?
Usually not on individual policies. They decide eligibility for contingent or bonus pay, which is calculated separately.
How do small agencies meet volume requirements?
Many join an alliance, network or cluster whose combined premium meets the carrier’s threshold, in exchange for a share of commission or fees.
Sources
- IA Magazine, Should You Join an Independent Agency Alliance?, September 1, 2025. Retrieved October 14, 2026.
Lapidar is commission reconciliation software for independent insurance agencies, in its founding pilot. Related: contingent commission.