Commission

Our broker compensation program is designed to recognize the value the independent broker brings to the transaction, including - risk management, loss prevention, coverage compatibility with risk and exposure. Other value-added services include policy issuance and risk selection.

Contingent Commission/Profit Sharing

Sovereign recognizes that independent brokers who know their markets represent their clients best and provide value-added services to the insurance transaction. This in turn contributes to the profit and long-term financial stability of the insurance companies they use. Profit sharing is a method insurance companies have of recognizing this reality.

Sovereign's profit sharing is based on portfolios of business, never on an individual account basis, and whereas the amount of the sharing may vary with volume, the long-term profit is the primary determinant of payment. Larger more stable portfolios have the ability to absorb large losses or events and provide the basis for long-term profitability.

Ownership & Loans

From time to time, members of The Co-operators Group Limited have provided financial support, in the form of equity investments or loans, to a small number of brokers for the purposes of succession continuity and business expansion. Our strategic direction is to reduce these positions over time. We expect these arrangements would in no way impact the advice given to customers, but we are committed to having these brokers disclose any financial arrangements to their clients.

The Sovereign General Insurance Company has no ownership or loans with it's Independent Brokers.

Subsidiary Companies

The Co-operators also has three wholly-owned subsidiary companies that act as intermediaries for specific client needs:

• HB Group Insurance Management Limited offers automobile and property insurance programs, mainly to employer sponsored groups, professional associations and affinity groups. These programs are marketed under the brands DirectProtect GroupTM and DirectProtectTM in English Canada or Assur-LigneMC and Assur-Ligne MultiMC in Quebec. HB Group also administers the Credit Union Insurance Services (CUIS) home and auto insurance program.
• Federated Agencies Limited and Unifed Insurance Brokers Limited support The Co-operators agency system by providing access to a range of insurance and financial service products not manufactured by The Co-operators.

  In addition, Sovereign is a 50% partner in the ownership of a marine underwriting manager, Harlock Murray Underwriting Limited.

If you have any questions about your broker's compensation for a specific policy or portfolio, please contact your independent broker.

For more information visit the website for the Insurance Bureau of Canada (IBC) at www.ibc.ca, the national trade association that represents the companies which insure the homes, cars and businesses of Canadians.