Guide · 9 min read
When a carrier changes your commission rate: how to check the new schedule is applied
Short answer. When a carrier changes your commission rate, get the new schedule in writing and find out which date it keys on: usually the policy or renewal effective date, sometimes the transaction or statement date. Then check that the new rate appears only on the lines, states and programs it covers, only from that date, and that endorsements and chargebacks on older policies still use the rate those policies were written at. Update the expected rates in your own system so next month’s check uses the right figure.
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A rate change is one decision at the carrier and thousands of lines on your statements. The errors tend to sit at the edges: the wrong date, the wrong product, the month the change takes effect.
TL;DR
- Get the new commission schedule in writing, with its effective date and what it covers: lines, states, programs, new business or renewal.
- Ask which date the change keys on. Policy effective date, transaction date and statement date give different answers for the same policy.
- Watch the transition: policies that straddle the date, endorsements on older terms, and chargebacks on commission paid at the old rate.
- Update expected rates in your agency management system and producer pay, or every later check will be measured against the wrong number.
Carriers change commission schedules, and in recent years agency trade press has reported commission cuts, including in hard coastal property markets (IA Magazine, 2024; IA Magazine, 2025). This guide isn’t about whether a change is fair or how to negotiate it. It is about the step after: making sure the statements reflect the schedule you were given, no more and no less. We’re building Lapidar, a tool that will check commission statements line by line; it isn’t available yet. This guide covers property and casualty business. Practice varies between carriers and states, and your agency agreement governs.
What counts as a commission rate change?
Anything that changes the rate the carrier pays on a given policy. The common forms:
- A new schedule replacing the old one, often as an amendment or attachment to the agency agreement.
- A change for one segment: a line of business, a state, a program, or new business against renewal.
- A change in how the rate is reached: tiers tied to volume or loss ratio, or a base rate with a separate bonus or profit-sharing agreement.
The first question is the same for all of them: what exactly changed, and from when. A rate that drops on a statement without a schedule to explain it is a discrepancy until the carrier shows otherwise.
How does the change usually arrive?
Usually as a written notice or a revised schedule from the carrier, sometimes through its agent portal. How changes must be made and notified is set by your agency agreement and, in some cases, state law; we can’t tell you what applies to yours. What helps on the statement side:
- Keep the schedule itself, not only the cover letter, with the date you received it.
- Write down what it covers in your own words: which lines, states and programs, new business or renewal, and from which date.
- Ask about anything it doesn’t say. A notice that says “renewals from March 1” may not say what happens to endorsements on a February renewal.
Which date does the new rate key on?
This is where many errors start. Three dates can sit on the same statement line:
| Keyed on | What it means | What to check |
|---|---|---|
| Policy or renewal effective date | Terms starting on or after the date get the new rate; terms already running keep the old one until they renew. | A term that started before the date but was paid at the new rate. |
| Transaction date | Anything processed after the date, including endorsements on older terms, gets the new rate. | Whether that is really what the schedule says, or a system default. |
| Statement or payment date | Every line on statements after the date gets the new rate. | Installment and audit commission on older terms swept in at the new rate. |
New business and renewal can also behave differently. A schedule may cut the renewal rate and leave new business alone, or the reverse; see new business vs renewal commission.
Did it apply only where it should?
A change meant for one segment sometimes reaches others. After the first statement under a new schedule, sort its lines by line of business, state and program, and look at the rate on each group. You’re looking for:
- the new rate on a line, state or program the schedule doesn’t mention;
- the old rate still showing where the new one should apply (which can mean an overpayment that comes back later);
- a rate that matches neither schedule.
Overpayments matter too. A carrier that later corrects them may take the difference back in one adjustment, so it is better to know the amount before it arrives.
What goes wrong in the transition month?
The worked example uses a schedule that cuts the renewal rate for terms effective on or after a date. The policy renewed just before that date, then had an endorsement after it.
- New renewal rate for terms effective on or after March 1 (was 15%)
- 12%
- Renewal effective February 20, premium $2,400.00, paid at 12%
- $288.00
- Expected at the old rate, 15%
- $360.00
- Endorsement in March on the same term, +$300.00, paid at 12%
- $36.00
- Expected at 15%
- $45.00
- Paid on this policy
- $324.00
- Short against the schedule as written
- $81.00
On one policy that is small. The same pattern repeats on every term that renewed in the weeks before the change, which is why the transition month deserves a closer look than any other.
What rate should chargebacks use after a change?
Usually the rate the commission was originally paid at, though your agreement governs. If a policy written at 15% cancels after the schedule moved to 12%, a chargeback at 12% takes back less than you were paid; after a rate increase, a chargeback at the new rate would take back more. Either way it no longer matches the payment it reverses. Check the first chargebacks after a change against their original lines; disputing a commission chargeback covers what to ask for.
What do you need to update on your side?
- Expected rates in your agency management system, by carrier, line and effective date, so the old rate stays on older terms and the new one starts where it should. Overwriting the old rate outright makes the old terms look wrong.
- Producer pay. If producers are paid a share of agency commission, a lower carrier rate usually lowers their share too; check what your producer agreements say about timing and apply any change consistently; see producer commission splits.
- Your notes on the schedule: what it covers, the date it keys on, and the carrier’s answers to your questions, so the next person checking statements doesn’t have to ask again.
How do you raise a rate that looks wrong?
List the lines, not the feeling. For each one: the policy, its effective date, the statement line, the rate paid, the rate you expected and which schedule says so, and the difference. Ask the carrier to correct it or to tell you which provision it applied. Several items at once fit in a commission discrepancy letter. If a rate looks wrong on renewals only, why carriers stop paying renewal commissions lists other causes worth ruling out first.
Why this is hard at scale
A schedule change touches every carrier statement for months: each line needs the right rate for its own term, not the rate of the day it was paid. Lower rates also make each error a larger share of what is left. A Big “I” Virtual University article by Al Diamond, looking back at the long soft market that began in the late 1980s, gives an example of an account whose commission rate fell from 20% to 12–15% over ten years while premiums fell and the service required grew (Big “I” VU, 2025). Checking the rate on every line, against the schedule in force for that term, is the work that tends to get skipped.
Where Lapidar fits
We’re building Lapidar to check each statement line against the rate you expect for that policy term and to flag lines paid at a rate that doesn’t fit, inside the Lapidar web app. Keeping your schedules current and talking to the carrier stay with you; Lapidar won’t contact your carriers. It is in its founding pilot, it has no customers yet, and we’ll say so until that changes. If you’d like to try it, the founding pilot is open below.
Frequently asked questions
Does a new commission rate apply to policies already in force?
It depends on the schedule and your agency agreement. Many changes key on the policy or renewal effective date, so in-force policies keep the old rate until they renew, but some key on the transaction or statement date. Ask the carrier which date it uses before you check a single line.
Should an endorsement on an old policy be paid at the new rate?
Often not. If the change keys on the policy effective date, an endorsement on a policy written before the change would normally carry the rate of that policy term. Some carriers handle it differently, so confirm it with the carrier and check the first few endorsements after the change.
Can a carrier cut my commission without telling me?
Changes are usually made through the agency agreement and its commission schedule, and the agreement says how changes are made and notified. We can’t tell you what yours says. If a lower rate appears on a statement and you have no new schedule, ask the carrier for the schedule and its effective date in writing.
Sources
- IA Magazine, E&O Risk Management Strategies to Strengthen Client Bonds in 2024, February 12, 2024. Retrieved October 10, 2026.
- IA Magazine, 4 Tips to Navigate Hard Coastal Insurance Markets, April 2, 2025. Retrieved October 10, 2026.
- Big “I” Virtual University, Producer Compensation: A Base/Growth Model, by Al Diamond, August 19, 2025. Retrieved October 10, 2026.
Lapidar is commission reconciliation software for independent insurance agencies, in its founding pilot. Related: insurance commission calculator · how to write a commission discrepancy letter.