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Revenue Commission Determinable

Revenue Commission Determinable

Owned by Lango: Language and translation manager
Last updated: Sept 15, 2024 by Lucie Sovova
6 min read

Definition of Revenue Commission

The highest level where a user can enter a revenue commission is Insurance Company Product. Entering the commission is on the overview or card of the insurance company's product via the button Commission in the Calculation Settings section. If a Commission is not entered, the system will not create a commission calendar. At the level of the insurance company's product, the user also enters a commission for individual insurance contracts mediated. The user has to select when entering the commission Framework Agreement Type – is part of the key when selecting a commission definition.

The next level, where the revenue commission can be defined, is the framework insurance contract – this is the highest level of assignment for collective or collection insurance.

When creating an insurance contract, the system looks for the definition of commission from the lowest level, i.e. the rate. If the Same Commission Code at multiple levels, the decisive factor is at the lowest level. E.g. the commission code V0001 is found at the level of RPZ, set and rate, the program applies the definition from the level of the rate. If different commission codes are entered in the tiers, the codes from all levels will be applied.

Field Description – Insurance Revenue Commission:

  • Commission Code

    • The user selects the appropriate commission code (the basic properties are already on the commission code, see the commission code). Settings)

  • Insurance Framework Agreement Type Code

    • Here, the user selects the framework agreement type for individual insurance. The field is required when entering on the insurance company's product. When entering at the level of the Framework Agreement, Set, Rate is not relevant

  • Valid For

    • Here, the user determines whether the definition of commission is valid for:

      • New Contracts

      • All Contracts

        • It only makes sense if the commission is changed, i.e. the conditions for previously concluded contracts have also changed, it is necessary to recalculate the commission calendar on the insurance contract

  • Calculation Method

    • The user selects whether the revenue commission is calculated:

      • Percentage

      • Amount

  • Calculation Base

    • Here it is important to specify for the calculation method "Percentage" from which the % is calculated. The user selects one of the following options:

      • Real Premiums

        • The system calculates a commission from the payment schedule for the insurance company

      • Expected Premiums

        • The system calculates a commission on the annual premium for the insurance company on the insurance contract

  • Rate

    • The user enters a value of % or an amount (depending on the selected calculation method)

  • Valid From

    • The user fills in the start date of the commission. If the field is empty, the validity from below is not limited

  • Valid To

    • The user fills in the expiry date of the commission. If the field is empty, the validity is not limited from above

  • Calculation Period

    • The user fills in the data formula for the commission payment period, e.g. 1M for a monthly commission. According to this field, the system creates commission calendar lines

  • Onetime

    • Here the user ticks in the case of a one-time commission. Even with a one-time commission, the user can fill in a period (one-time with a period of 6M - it is a one-time with a recurring period, where it is paid at the beginning for 6 months in advance, regardless of the termination of the contract. If the insurance lasts, after half a year the company will pay again for 6 months in advance. E.g. the one-time premium is only once in the case of GAP, but in the case of Removed Items it is for half a year – Periodic 6M – as long as the contract is valid, it is paid for a new six months and is not refunded even if the contract is cancelled the next day)

  • Approximation

    • The user ticks this field if the commission calendar needs to be recalculated if the amount of the incoming commission does not match the prescribed commission. A zero commission calendar is created for a non-determinable commission. The calendar is recalculated from the commission sheets. For a determinable commission, the amount of commission may change over time. If Approximate is checked, it is possible to recalculate the commission calendar. For the insurance type "Individual", the field is checked, but the user can edit

  • Different Levels of Commissions

    • Check mark for entering commissions with different rates in the period (see below)

  • Entitled To Commission

    • The user selects from the options when the commission is entitled:

      • Against payment

      • Start of Period

      • End of Period

  • Comment

    • Text box

  • Subsidies (Subses)

    • The user ticks this field if it is, for example, a subsidy for leasing – zero increase. The check mark must be entered if the user enters the subsidy amount

    • It is applied in the calculation of the cost commission

  • Subsidy Amount

    • In the case of a subsidy, the user enters the amount of the subsidy in this field. Again, the field is relevant when calculating the cost commission

Furthermore, the commission contains the key fields for which the commission is entered – insurance company number, product number, framework agreement number, set number, rate number.

Revenue commissions for mediated individual insurance policies

The highest level for entering a revenue commission is the insurance company's product. The user enters a commission for individual insurance contracts mediated. The user has to select when entering the commission Framework Agreement Type – is part of the key when selecting a commission definition.

On Framework Agreement Type You also need to select Insurance Calculation Method. According to this parameter, the system calculates the period on the lines of the commission calendar. For individual insurance contracts, it is only at this level.

Revenue Commission on Insurance Contract

The definition of commission is not inherited. When calculating an insurance contract, the system looks for the definition of commission from the lowest level upwards and creates a commission calendar according to the definition found.

Multiple commissions can be defined on an insurance contract. E.g. a one-time commission when concluding a contract and a regular monthly commission during the term of the contract. There may also be more recurring commissions – e.g. the amount of commission paid has changed during the course of the contract.

If the user changes the date in the insurance contract field Valid From, the system updates the definition of revenue commission on the insurance contract.

Entering Revenue Commissions of Different Levels

Revenue commission can be defined at the following levels: insurance company product, insurance framework contract, set, rate. Commissions are not inherited, but when an insurance contract is created, the system looks for the definition of commission from the lowest level.

When entering a commission with different levels in each period, the user does not enter the rate per line with the commission code. When the check box is selected Different levels of commissions Enters Rates in Period.

Each line specifies the rate for that time slot. The first rate is valid for 1 year, the second for 2 years. The last rate is valid until the end of the insurance contract – it does not depend on the specified period.

Result on insurance contract - for revenue commission code with different amount, the system will create insurance contract revenue commissions for the period according to the period in the definition.

According to the Calculation Period, it then creates monthly lines of the commission calendar – 25% for the first year, 15% for the next two years and 10% for the following period until the end of the insurance contract's validity.

When a user changes the definition of commission on an insurance contract, it is necessary to change the date before modifying the definitions.

When changing Valid From and Valid To On the insurance contract, the system will repopulate the definition of the contract revenue commission – due to the update of the different commissions. If the user enters the definition manually and then changes the validity date, the system deletes the manually entered data. You must first enter the effective date before you manually edit the commission definitions on the insurance contract.

Insurance and Commission Prescription

In order for the system to include the premium in the payment to the insurance company, it is necessary for the user to report a new contract – an addition to the insurance company, i.e. to create and issue a statement of the type Increment (described in detail in the Statements for Insurance Company documentation). Once reported, the system will mark the insurance contract.

Reported insurance contracts will be included in the system in the trunk check (detailed in the Statements for Insurance Company ). After agreeing to the trunk (the user runs the function Issue above the statement of the type Trunk), the line of the approved period is marked in the column Blocked and Sent.

Then it is possible to print a report for the payment of insurance premiums. Printing is according to the amount of the commission percentage.

The user opens the card of the released insurance statement of type Strain. Executes the function Press. The print parameters are given by the report header. It is possible to run a summary report for the accounting department – Insurance Payment Summary.