 |
 |
 |
 |
 |
HR Support Center
Call Today
We’re ready to help
888-382-1611
Compensation Statement
SUMMARY OF BEECHER CARLSON'S COMPENSATION POLICY
Beecher Carlson is compensated with commissions paid from insurance carriers, fees paid from clients and contingency or profit sharing income paid by insurance companies.
When Beecher Carlson acts as a broker, which is typically our role when handling larger risk management accounts, we generally accept compensation paid to us from the client as a fee for our services. This fee is generally negotiated in advance of providing the services and is agreed to, generally in writing, with the client. For clients from which we receive a fee, unless otherwise disclosed, we do not accept compensation from insurance carriers in the form of additional commissions, profit sharing or contingency income.
When we act as an agent for an insurance company, which is typically our role when handling smaller accounts, we usually receive commissions. Commissions are generally calculated as a percentage of the premium paid to the insurer for the specific policy. The commission is paid to us by the insurer to design, implement and service the client’s insurance and risk management program. Our commission is included in the premium paid by the client to the insurance carrier. We may also receive additional compensation from insurance companies based on factors such as profitability, volume, retention, or other factors determined by our arrangement with the insurance companies or other intermediary. This income is Contingency Income or Profit Sharing Income as discussed below. When requested, we will disclose additional compensation when known specifically or as a reasonable approximation when we are not confident we can specify additional compensation for a particular placement. Because of the nature of many contingency agreements, the amount (or reasonable approximation) of such compensation is not determinable until the year following placement.
CONTINGENCY OR PROFIT SHARING INCOME
In our agency business, we sometimes receive income through contingency or profit sharing arrangements with some of the insurance carriers. These payments are not guaranteed to be paid by the insurance carrier, and are often referred to as Contingency Commissions, Contingent Income or Profit Sharing Income. The revenues are contingent to Beecher Carlson because to receive the payment, minimum criteria involving the amount of premium placed with the carrier, the growth as measured year over year and the overall underwriting profitability must be achieved.
Each insurance company has a different set of criteria associated with the requirements needed to receive contingency income. The amount of earned contingency income depends on the overall size and/or profitability of all of a group of accounts, as opposed to the placement or profitability of any particular insurance policy. All of the factors impacting the potential for contingency income are available to the Beecher Carlson clients by requesting the information from any of our Client Representatives.
PROGRAM OPERATIONS (MANAGING GENERAL AGENT OR PROGRAM ADMINISTRATOR "MGA")
The role of the MGA is to handle certain underwriting, policy issuance and/or other administrative functions of an insurance company by contract with that company. Any Beecher Carlson affiliated entity that performs these duties is paid directly by the insurance company for which we are performing these functions, typically as a percentage of premium. Our own retail brokers may on occasion place client policies through a program managed by a Beecher Carlson affiliated MGA. Beecher Carlson will inform the client of any placement made through an affiliated MGA. Any compensation paid to the MGA by the insurance carrier will be in addition to any compensation paid to Beecher Carlson in its capacity as a retail insurance agent or broker.
WHOLESALE BROKERAGE OPERATIONS
The role of an insurance wholesale broker is to provide placement services for specialized or otherwise hard to place risks. The wholesale insurance broker works with the retail insurance broker or agent to provide access to specialized insurance markets. When we act in the capacity of a wholesaler, we are compensated on either a commission or fee basis. Our own retail brokers may place client policies through a Beecher Carlson affiliated wholesale insurance broker. Beecher Carlson will inform the client of any placement made through an affiliated wholesaler. Any compensation paid to the wholesaler will be in addition to any compensation paid to Beecher Carlson in its capacity as a retail insurance agent or broker.
CAPTIVE MANAGEMENT OPERATIONS
Beecher Carlson is one of the leading providers of services to captive insurance companies. Beecher Carlson manages many aspects of the captive operations, including among other things accounting, compliance, financial reporting and underwriting. Beecher Carlson receives a management fee for the management of the captive operations and on occasion receives commissions when assuming brokerage services, underwriting or operational responsibility for the captive operations. In all cases, the total compensation received is fully disclosed to the sponsoring entity of the captive. Any compensation paid to us in the capacity of captive manager will be in addition to any compensation paid to Beecher Carlson in its capacity as a retail insurance agent or broker.
OTHER COMPENSATION AND BENEFITS
We may receive revenue or further benefits from our insurance brokerage activities in other ways, including, but not limited to, from insurance company promotional events, fees paid to us for the administration of premium finance contracts and interest paid to us by financial institutions earned on fiduciary or trust accounts in which we hold clients’ premium payments pending remittance to the insurance company.