Agency Compensation Disclosure
As an independent insurance agent or insured broker I, or my firm, (hereafter “I”) may have access to more than one insurance company to place your coverage. Whether acting as an independent insurance agent or insurance broker I have certain obligations to you as the purchaser and certain obligations to the insurance company as determined in both statutory and case law. If acting as an independent insurance agent I may have authority to obligate the insurance company on your behalf and as a result I may be required to act within the scope of my contractual agreement with the company. As the purchaser you need to understand that I typically will receive compensation from the selling company based on the agreement I have with the company. That compensation may vary from company to company and also be impacted by the volume of business I place with the company, the profitability of that business and other factors.
Important Information on Commissions
- Commissions on auditable policies are adjusted after audit based on the exposures reported or developed for the policy period. The Annual Compensation BDDA receives can, therefore, either increase or decrease based upon final audit results, and the commission percentage(s) applicable to each respective auditable line of coverage.
- Some commissions, for certain lines of coverage; primarily workers compensation, may be developed and paid to BDDA based upon a sliding scale commission plan. If, for any line of coverage, BDDA’s commission is developed and paid on a sliding scale basis we have noted it in our proposal, and included for your reference, a copy of the plan.
- Commissions, as a filed portion of an insurance company’s expenses, are an indivisible part of the insurance premium. Commissions cannot be legally reduced unless the insurance company maintains a filed expense reduction plan with the state insurance department.
- Commissions are not paid to BDDA on mandatory state surcharges and assessments; excess and surplus lines taxes and fees; nor on service charges made by third parties.
- As is usual and customary in most businesses, the Directors, Officers and/or Employees of BDDA may, from time to time, receive or accept from insurance organizations or other vendors, non-monetary rewards or tokens of appreciation for the business relationship we enjoy. These non-monetary rewards or tokens of appreciation typically consist of: business lunches or dinners; non-logo gift items or prizes; trips, cultural or sporting event invitations or sponsorships, etc.
The Directors, Officers and Employees of BDDA; as a matter of corporate policy, are obligated to avoid any potential conflicts of interest, and do not accept non-monetary rewards or tokens of appreciation that may or could be construed to be linked to the specific placement of our client’s accounts.
You may receive information about my compensation on the policy or policies you select and about any policies I have presented to you which you did not select by asking me for the information.