Base Commission. Producers are generally paid a Base Commission for the sale and service of policies placed with us. Base Commission is a fixed percentage of the policy premium or a fixed amount per policy, generally set prior to the sale (effective date) of the policy to which it applies. The percentage or amount may vary depending on certain factors, such as the type of product, the risk classification, whether the policy is new or a renewal, whether another policy is written for the same insured, and the services provided to the policyholder. In some cases, the percentage or amount may be negotiated on a transaction by transaction basis, and may vary by Producer based, at least in part, on the Producer’s past performance and the expected value of the Producer’s business going forward.
Supplemental Commission. Certain Producers may be eligible for Supplemental Commission in addition to Base Commission. Like Base Commission, Supplemental Commission is a fixed percent of premium or a fixed amount per policy, which is generally set prior to the sale of the policy to which it applies. Eligibility for, and the amount of, Supplemental Commission paid on current business is based upon a Producer's ability to meet certain past production, growth, profitability or other historical performance objectives established by us. Supplemental Commission is generally paid separately from Base Commission on an annual or other periodic basis.
Contingent Commission. Certain Producers may be eligible for Contingent Commission, which may be offered in lieu of or in addition to Supplemental Commission. Contingent Commission is generally a particular percent of the premium written during a preceding performance period or a particular sum that is based upon a Producer's ability to meet certain production, growth, profitability or other performance objectives established by us for that preceding period. As such, eligibility for, and the amount of, Contingent Commission cannot be determined until after the sale of policies that occur over a given period of time. Contingent Commission is generally paid separately from Base Commission on an annual or other periodic basis.
Other Services, Benefits and Support. Certain Producers may receive other services, benefits and support from us, which may also depend on the Producer meeting production and other performance objectives established by us. These other services, benefits, and support may include:
Individual Producer and CSR Incentive Awards
We may provide individual Producers and customer
service representatives employed by an agency with
incentives for placing business with us or taking other
actions. These incentives may be in the form of cash or
non-cash awards based on the number of policies written,
number of quotes obtained, or other performance
objectives established by us, such as the number of
policyholders signed up for our electronic funds
transfer premium payment method.
Marketing and Other Support
We may assist or pay for a Producer's marketing
efforts and certain other business expenses. This
assistance may include, but is not limited to, items
such as education, training expenses, lead generation
services, advertising assistance, sales and business
meetings, and other services that help the Producer
promote us and our products.
Other Benefits
We may provide certain Producers with other
benefits, including, but not limited to, entertainment,
tickets to sporting events, travel, gifts, branded
merchandise, and attendance at corporate-sponsored
meetings, including transportation, accommodations, and
meals.
Policyholder Services
We may make available various policyholder services
to certain Producers with or without charge to the
Producer. When a fee is charged to a Producer for such
services it may also be waived based upon the Producer
meeting certain production or other performance
objectives established by us. Fees charged for such
services are generally offset against commissions
payable to the Producer and therefore result in a
reduced commission being reported on policies issued
through the Producer.
Loans
We do not have any outstanding loans to Producers.
Interest on Premiums Collected
In some instances, interest earned on premiums
collected by Producers and placed on deposit before
having to be paid to us may be retained by the Producer,
as permitted by law.
Fees for Services and Enhanced Commission
We pay fees to some Producers for services they
perform for us. The fees may be payable in fixed sums
over a period of time, as a percentage of premium, in a
fixed amount per policy, or based upon other measures.
The services performed may be similar to the services
provided by other Producers, who may choose to be
compensated through commission only. The services
provided may be of a marketing nature, including, but
not limited to providing: (i) data, reports and
information on our market performance and industry
trends; (ii) information on the Producer's accounts to
better match them with our underwriting appetite and
assist in the selection of accounts to request quoting
opportunities; (iii) tools such as an electronic quoting
or policy issuance platforms; (iv) assistance with the
development of sales and marketing plans; and (v)
assistance in communicating our marketing messages. What
we will pay for some of the services may depend on the
value of the business that the Producer has with us. In
some cases, we may pay an additional or "enhanced"
commission for a combination of the placement of
business and such services.
Surplus Lines Insurance Brokers, Employees, Producer-Owned Captives, and Other
Surplus Lines Insurance Brokers
We may distribute certain products and services
through approved surplus lines insurance brokers by
referral. These
individuals and firms generally are compensated in the
same manner as Producers, described above.
Employees
We also have employees who sell insurance for us.
In addition to their regular salary, these employees may
receive additional cash or non-cash compensation based
on the number of policies sold or other performance
objectives established by us. to reach maximum
compensation agent must provide superior service above
and beyond what is standard and be recognized by our
management team as doing so.
Producer-Owned Captives
Certain business may be reinsured by an external
contracted or non contracted entity
in which the Producer of the business has an ownership
or other financial interest, known as a Producer-owned
captive. These Producers participate in the underwriting
profitability or loss on such reinsured business.
Other
We may also pay compensation, including endorsement
fees, royalty fees and administrative service fees,
(where permitted by law), to
associations and other entities that endorse NJ Direct
Insurance Brokerage and promote the sale of our products and
services.
Some Producers may or may not charge their customers a fee (where permitted by law) on their own account related to services they provide to their customers. Any such fee would not be part of the premium we charge or collect, would not be charged on our behalf, and may be in addition to receiving compensation from us.
On some transactions multiple Producers receive divisible compensation from us.
Base Commission, Supplemental Commission, and Contingent Commission ranges by type of policy for property and casualty lines.