Agent Section | Return
to New Agent Section Main Page
Contingent Commission Program
Normally, the underwriting profit of the Company will be the basis for determining whether a Contingent Commission will be paid. However, at the discretion of Management, a Contingent Commission may be awarded in the absence of an underwriting profit.
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.
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.
At the discretion of management, agents who are eligible for a Contingent Commission may receive up to 10% of their pure profit. Agents who qualify as Super Agents may receive up to 20% of their pure profit.
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:
Contingent Commission Reduction:
Retention Bonus Program
The Bonus Retention program is designed to be advantageous to both the Agent and the Company. Agents will be paid an additional commission for retaining their policies with the Company from year to year. For the Agent, it is an incentive to obtain additional commission. For the Company, there are three objectives:
This program was initiated on 9/30/91 with a minimum written premium requirement of $20,000. At this time, we are encouraging our agency force to grow with us and are setting the goal at a higher level of $35,000. minimum written premium.
Basis for Determining Retention:
By individual policy and written premium; for the purpose of this program only, written premium is defined as the annualized premium. A detailed report listing every individual policy and written premium recorded on the books as of 9/30 will be prepared for each eligible agent. The report will include the total number of policies and the total written premium.
A similar report will be prepared each subsequent year.
We will produce a listing of all policies written during the period of 10/31 to 9/30 with the exception of new business written during that period.
Only those individual policies (or renewal thereof) that have been retained from one year to the next will be considered eligible in the calculation for additional commission.
The total written premium on the policies that are retained from one year to the next will be divided into the written premium from the previous 9/30 year to obtain a percentage of retention.
The agent is eligible for additional commission under this program if the premium retained at current year (9/30) equals at least 90% of the premium at previous year (9/30).
The additional commission percentage will be calculated by applying the applicable percentage and multiplying it by the written premium of the retained business. Please note this additional commission does not apply to the agent's total written premium, only the written premium of the retained business.
Commission Percentages Are:
Bonus Retention Revision #1:
The additional commission will be paid within 45 days from September 30. It will normally be paid by automated deposit to the agent’s designated account. It will be a separate entry from the regular monthly commission automated deposit.
Data Processing Reports:
New Agent Section:
For further information regarding our policies,
send e-mail to
Copyright Fulmont Mutual Insurance Company. All rights reserved.