REVISIONS:
ü
The effective date for the revised Super Agents’ Contingent
Commission calculation is January 1, 2002.
ü
Normally, the underwriting profit of the Company will be the
basis for determining whether a Super Agents’ Contingent Commission will be
paid. However, at the discretion
of Management, a Contingent Commission may be awarded in the absence of an
underwriting profit.
ü
If a Contingent Commission is paid, the calculation will be
based on the individual agent’s “pure profit”. “Pure profit” will
equal Earned Premium minus Management expenses, incurred losses, LAE and
unallocated expenses.
ü
Management expenses will include the subject agent’s actual
commission. Please note that those agents who receive an average higher
commission may experience slightly higher management expense ratios.
A higher commission is normally the result of net retention bonus,
Contingent Commission, High Tech, extra commission for a rollover, etc.
ü
At the discretion of management, agents who are eligible for a
Super Agents’ Contingent Commission, may receive up to 20% of their pure
profit.
ü
The stop loss of $100,000. per loss on a yearly basis will
remain in effect. However, if an
open loss is increased in succeeding years there may be up to an additional
$100,000. stop loss for each of the succeeding years the loss was increased.
ITEMS IN THE PROGRAM THAT
WILL REMAIN THE SAME:
PREMIUM BASE:
The
premium base for the Super Agents’ Contingent Commission Program will be
Earned Premium of $200,000.
NUMBER
OF YEARS IN SUPER AGENTS’ CONTINGENT COMMISSION CALCULATION:
One year, being January 1 through December 31, will be used in the
calculation.
BONUS
PROGRAM: If
the Earned Premium for the current year is at least 10% more than the previous
year, 1% additional commission times Earned Premium may be paid. Please note
that rollover business will not be included in the bonus program calculation.
The bonus program will apply only to agents eligible and qualifying for the
Contingent Commission Program.
CONTINGENT
COMMISSION REDUCTION: If
the Earned Premium for the current year is more than 5% LESS THAN the previous
year, 1% commission times Earned Premium may be subtracted from the Contingent
Commission check. This applies only to agents qualifying for the Contingent
Commission Program.
U:…/Letters
to Agents…Super Agents CC Rev
0-5/2002