Independent
Broker Compensation
| Line of Business |
Standard Commission |
| Commercial Lines |
| Property |
20% - 25% |
| Casualty |
17.5% - 25% |
| Automobile |
12.5% |
| Personal Lines |
| Habitational |
20% - 25% |
| Private Automobile |
12.5% |
| Specialty Lines
|
| Surety |
20% - 27.5% |
| Errors & Omissions Insurance |
15% |
Director's & Officers Insurance
|
15% |
| Warranty |
15% - 30% |
| Marine |
24% - 32% |
Commissions may vary on individual policies based on the value-added
services provided by the independent broker. For some specialty
business Sovereign distributes products through Managing General
Agents (MGA) , which have underwriting, claims, reinsurance and
administration expertise. An MGA does not provide independent services
to the insurance public, rather their products are distributed
by independent brokers. The above commissions include the fees
charged by the MGA for these services.
Contingent Commissions
The Sovereign's contingent commission programs allow for payments
to qualifying brokers annually, applicable to their total portfolio
of business with the company. Such payments are made based primarily
on the profit performance of portfolios, and that business is judged
on results over a period of between one to five years. The total
amount of contingent commissions that Sovereign expects to pay
in any one year are about 3% of the company's gross written premiums.
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