For policies sold from the 16th of December, 2018.
Whilst working out your commission rates, you'll need to include the relevant rate of IPT (Insurance Premium Tax). Please refer to the FAQs on IPT for full details of this.
Monthly Drip/Accrual:
Commission is paid monthly throughout the term of the policy. Calculation: Monthly Premium (minus admin charge )/ IPT at the current rate x commission rate. Please note that it is no longer possible to change your commission to Monthly Drip.
Client Pays Premium in Full
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission) / (Divide) 12 = £6.42 (Monthly commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission) / (Divide) 12 = £6.42 (Monthly commission Due)
Annualized Indemnity:
12 months commission paid upfront at the inception of the policy and at renewal each year after.
Client Pays Premium in Full
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission Due)
Double Indemnity:
Two years’ commission is paid to the broker from the insurance start date of a policy discounted by 90.91%. In the third year of the policy at renewal, this will revert to an Annual Indemnity.
Client Pays Premium in Full (Start of Policy) Commission reverts to Annualised Indemnity from Year 3 onwards.
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) x 2 (Number of Years commission payable) * 90.91% (Discount Factor) = £140.18 (Commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) x 2 (Number of Years commission payable) x 90.91% (Discount Factor) = £140.18 (Commission Due)
Enhanced Indemnity:
If an agency is paid standard commission rate at 27.5%, Enhanced Indemnity will pay commission at 45% in year 1 and 15% upon each yearly renewal. The first year’s payment has a Claw back liability period over 2 years.
Client Pays Premium in Full (Start of Policy) Commission 45% in first year then 15% each renewal thereafter.
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 45% (Commission Rate) = £126.16 (Commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 45% (Commission Rate) = £126.16 (Commission Due)
Whilst working out your commission rates, you'll need to include the relevant rate of IPT (Insurance Premium Tax). Please refer to the FAQs on IPT for full details of this.
Monthly Drip/Accrual:
Commission is paid monthly throughout the term of the policy. Calculation: Monthly Premium (minus admin charge )/ IPT at the current rate x commission rate. Please note that it is no longer possible to change your commission to Monthly Drip.
Client Pays Premium in Full
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission) / (Divide) 12 = £6.42 (Monthly commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission) / (Divide) 12 = £6.42 (Monthly commission Due)
Annualized Indemnity:
12 months commission paid upfront at the inception of the policy and at renewal each year after.
Client Pays Premium in Full
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) = £77.10 (Commission Due)
Double Indemnity:
Two years’ commission is paid to the broker from the insurance start date of a policy discounted by 90.91%. In the third year of the policy at renewal, this will revert to an Annual Indemnity.
Client Pays Premium in Full (Start of Policy) Commission reverts to Annualised Indemnity from Year 3 onwards.
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) x 2 (Number of Years commission payable) * 90.91% (Discount Factor) = £140.18 (Commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 27.5% (Commission Rate) x 2 (Number of Years commission payable) x 90.91% (Discount Factor) = £140.18 (Commission Due)
Enhanced Indemnity:
If an agency is paid standard commission rate at 27.5%, Enhanced Indemnity will pay commission at 45% in year 1 and 15% upon each yearly renewal. The first year’s payment has a Claw back liability period over 2 years.
Client Pays Premium in Full (Start of Policy) Commission 45% in first year then 15% each renewal thereafter.
£350 (Premium) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 45% (Commission Rate) = £126.16 (Commission Due)
Client Pays Premium by Monthly Direct Debit
£350 (Premium) x 12% (Charge of Credit) = £392
£392 (Premium) – £42 (Charge of Credit) - £36 (Subtract Admin Fee) / (Divide) 1.12 IPT (Insurance Premium Tax) x 45% (Commission Rate) = £126.16 (Commission Due)