Summit may be compensated in a variety of ways. The insurance coverages and services a client purchases through Summit may be subject to one or a combination of the following compensation arrangements:
Commissions and Fees. Summit receives usual and customary brokerage commissions or fees (and occasionally fees in addition to commissions) for its services. Commissions are typically a percentage of the premium charged by an insurer. In some instances, pertaining to group benefit insurance policies, commissions are paid on a ‘per employee per month’ basis. Other parties, such as excess and surplus lines brokers, wholesalers, reinsurance intermediaries, underwriting managers, captive managers, third party administrators, claims adjusters and similar parties, some of which may be owned in whole or in part by Summit, may earn and retain usual and customary commissions and fees in the course of providing insurance products, risk management, and administrative services to clients.
Contingent Commissions. Summit may also participate in contingent commission arrangements with insurance companies that provide for additional contingent compensation if certain underwriting, profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain insurance coverages placed by Summit with the insurance company, not on an individual policy basis. Although Summit strives to provide the most suitable insurance products and services to its clients, contingent compensation arrangements may be considered to be incentive compensation by one or more state insurance regulations.
Supplemental Commissions. Some insurance markets, including Summit-owned intermediaries, have modified their commission schedule with Summit, resulting in an increase in some commission rates. These additional commissions, commonly referred to as “supplemental commissions”, are known as of the effective date of the policy, but some insurance companies are paying this commission later and apart from when commission is normally paid at policy issuance. Unlike contingent commissions, supplemental commissions are determined without regard to any performance factors contingent on underwriting, profitability, volume or retention goals.
Carrier Benefits. From time to time, Summit may participate in insurance company-sponsored events, or training and development provided for Summit employees.
Carrier Services. Summit strives to find suitable insurance coverage for our clients. In order to achieve these goals, we may gather and analyze data about our clients, and their past and current insurance coverage. This data and the resulting analytical tools help us better understand the current marketplace, more accurately predict future trends, and provide suitable solutions. In addition, Summit may also provide this data to insurers to carry out consulting service relationships from which we earn fees.
Clients with more specific questions about the compensation received (or expected to be received) by Summit and its affiliates in relation to their insurance placements should contact their Summit representative for more details.