– COMING IN 2022 –
Commission Schedule Changes, ACH Payments, and Electronic Commission Statements
Starting January 1, 2022, we’re changing how and when you receive commission payments for homeowner policies. These changes do not apply to commercial lines.
HOW YOU ARE PAID
Great news! ACH Payments are coming, which means no more paper checks. Hassle-free electronic payments are delivered fast, directly to your account. Plus, you’ll receive a newly formatted monthly commission statement that clearly itemizes commission payments by policy.
WHEN YOU ARE PAID
You’ll now be paid commission when a policy becomes effective (vs. bound) AND once the premium is collected (vs. written). Your monthly commission check and statement will include transactions from the prior month. We’ve included some examples below to explain how the new schedule works.
CASE 1 | A policy paid in full
A policy is bound and the premium is paid in full on 1/15/22. The policy has an effective date of 2/1/22. You will receive the commission with your March statement when commission for February transactions are paid.
CASE 2 | A policy paid in monthly installments
A policy with a premium of $1,200 is bound with an effective date of 1/1/22. A monthly payment plan is selected and the initial payment is collected on 1/1/22. You will receive commission on the initial premium payment ($200) with your February commission check. You will continue to receive commission payments for this policy each month, as monthly payments ($100) are collected from the insured.
CASE 3 | A policy paid via escrow bill
A policy is purchased with an effective date of 1/30/22 and the customer selects escrow bill. Accounting receives payment for the full policy premium on 2/4/22. Since escrow is paid in full, you will receive commission for the entire term with your March statement.
Why the change?
Receiving full commission for a policy that was never paid in full or worse, never in effect, can lead to headaches later. Accounting must “clawback” the funds from your next commission check. That deficit can add up and is hard to plan for. That was the old way.
The new way, paying on collected premium for policies in effect, means you’ll see fewer of these disruptive accounting corrections. Also, you can see these changes impact policies with monthly pay plans the most. Keep it simple by recommending full or escrow pay.
NEXT STEPS
Be on the lookout for your ACH Agreement. We’ll be sending you a copy by email in the coming weeks. It’s very important that you complete, sign and return the agreement to us. We cannot enroll you in electronic payment without it.