Commission - Third Party Liability (General)¶

Overview¶

Commission structure for General TPL (product 5010) based on 1,714 policies from Premia UAT database.

Commission Data Status¶

Current Status: Limited commission data available in main policy table.

Commission information for General TPL is likely stored in separate commission tables: - PGIPK_COMM_ACNT_DOC - Commission accounting - PGIT_COMM_* tables - Commission transactions - Broker/agent master tables

Typical Commission Structure¶

Standard commission arrangements for General TPL:

Broker Commission¶

Type: Percentage of premium
Typical Range: 10% - 25%
Payment Timing: Upon policy issuance or premium collection
Varies By:
Broker relationship
Policy size
Account type (new vs renewal)
Negotiated agreements

Commission Calculation¶

Commission Amount = Premium × Commission Rate %

Where:
- Premium = Final policy premium (AED 2,483 average)
- Commission Rate = Agreed percentage
- Typical Commission = AED 248 - AED 621 per policy (at 10-25%)

Commission Types¶

1. Standard Broker Commission¶

Payment: Direct to broker
Rate: Fixed percentage
Timing: With policy issuance
Clawback: May apply if policy cancelled

2. Renewal Commission¶

Payment: On policy renewal
Rate: May differ from new business
Timing: Annual renewal
Conditions: No lapse in coverage

3. Override Commission¶

Payment: To senior brokers/managers
Rate: Additional percentage
Timing: Quarterly or annually
Conditions: Volume-based

Endorsement Impact on Commission¶

Premium Increase Endorsements¶

Additional Commission: Yes
Calculation: Commission rate × Additional premium
Payment: With endorsement processing

Premium Decrease Endorsements¶

Commission Clawback: Depends on configuration
Calculation: Commission rate × Refunded premium
Recovery: From future commissions or direct refund

Cancellation¶

Full Clawback: If cancelled within minimum period
Partial Clawback: Pro-rata based on earned period
Minimum Earned: Typically 25-30% commission retained

Commission Payment Terms¶

Payment Timing¶

Immediate: Upon premium collection (cash policies)
Deferred: After premium payment confirmation
Installment-based: For policies with installment payments
Monthly Settlement: Batch processing of all commissions

Payment Methods¶

Bank transfer
Cheque
Commission statement with settlement
Offset against debit balances

Database Fields¶

Commission information typically in: - POL_COMM_RATE - Commission rate percentage (if stored in policy table) - POL_COMM_AMT - Commission amount (if stored in policy table) - Commission tables: PGIT_COMM_* for detailed transactions - Broker master: PGIM_BROKER for default commission rates

PL/SQL Packages¶

Commission processing: - PGIPK_COMM_ACNT_DOC - Commission accounting and documentation - PGIPK_ENDORSEMENT - Handles endorsement commission impact - PGIPK_CALC_* - Commission calculation packages

Integration Points¶

When implementing commission processing:

Policy Issuance
Calculate commission at policy creation
Store in commission tables
Generate commission voucher
Premium Collection
Trigger commission payment process
Update broker account
Generate payment advice
Endorsements
Recalculate commission for changes
Handle additional/refund commission
Update commission records
Cancellations
Calculate clawback amount
Process commission reversal
Update broker accounts

Reporting¶

Commission reports typically include: - Broker-wise commission summary - Product-wise commission analysis - Period-wise commission statements - Outstanding commission payables - Commission clawback tracker

Business Rules¶

Standard Rules¶

Commission payable only after premium received
Minimum earned commission on cancellations
Clawback period typically 12 months
Override commissions based on volume thresholds
Special rates for large accounts

Exceptions¶

Direct business (no broker): Zero commission
Corporate accounts: Negotiated rates
Affinity partnerships: Special commission structure
Online channels: Reduced commission rates

Typical Commission Scenarios¶

Scenario 1: New Policy Issuance¶

Premium: AED 5,000
Commission Rate: 20%
Commission: AED 1,000
Payment: Upon premium collection

Scenario 2: Mid-term Endorsement¶

Additional Premium: AED 1,500
Commission Rate: 20%
Additional Commission: AED 300
Payment: With endorsement settlement

Scenario 3: Policy Cancellation (6 months)¶

Original Premium: AED 5,000
Original Commission: AED 1,000
Earned Period: 50%
Clawback: AED 500
Method: Deduct from future commissions

Data Limitations¶

Note: Detailed commission data not available in the main policy extraction. This analysis is based on: - Standard insurance commission practices - Premia system commission structure - Industry norms for general insurance - Database schema analysis

For complete commission details, additional extraction from commission-specific tables (PGIT_COMM_*, PGIPK_COMM_ACNT_DOC) would be required.

Data Source: Analysis of 1,714 General TPL policies (product 5010) from Premia UAT. Commission section based on system structure and standard practices due to commission data being in separate tables.