Life Policies, Commission
The commission screen is split into two halves, with “Initial/Indemnified commission” details at the top and “Renewal commission” details at the bottom. Current regulations require you to disclose commission details to your clients before they proceed with a policy, so you are bound to know each policy’s commission details in advance, and should be able to enter them on the “Commission” screen, as follows…
- Initial Commission
- Use the “Indemnified / non-indemnified” drop-down to select the type of commission (n.b. “Indemnified is where many months’ initial commission is paid up-front)
- Enter the “Initial or indemnified sum” (e.g. £35 initial commission to be paid monthly, or £1230.53 indemnified commission paid in a single sum)
- Leave the invoice date, which will be set to the policy’s start date. However you may change it if you specifically want the invoice to be earlier or later.
- Use the “Period of commission” drop-down to select the period (e.g. “Single” for an indemnified lump sum, or “Month” for initial commission paid in monthly instalments)
- Edit the commission start date in the “Starts” field, though this is likely to already be correctly set to the policy’s start date
- If, for example, the commission is for an on-going savings scheme that continues to pay initial commission, then click the “Commission continues indefinitely” box
- If the initial commission is not indefinite and not paid lump sum, then enter its end date in the “Ends” field
- Leave the “Invoice separately or grouped” drop-down set to “Separately” (see section below on “Invoice Separately or Grouped”)
- Renewal Commission
- Use the “Renewal commission” drop-down to select the basis of the renewal commission (e.g. “Premium based”)
- Enter the “Renewal commission %” (e.g. to 2.50% of the policy’s premium)
- Use the “Period of renewals” drop-down to select when the renewals commission will be due (e.g. per “Month”, “Quarter”, etc)
- Enter the renewal commission start date in the “Starts” field
- If the renewal commission is for an on-going scheme that continues to pay renewal commission, then click the “Commission continues indefinitely” box
- If the renewal commission is not indefinite, or paid in a single sum, then enter its end date in the “Ends” field
- Leave the “Invoice separately or grouped” drop-down set to “Grouped” (see section below on “Invoice Separately or Grouped”)
- Click the black “Curve Right-Arrow” button to save your commission details and move onto the next screen
If you are a member of a network then refer to “Life, Commission, Network Deductive”.
The “Calculate” Button
The “Calculate” button can automatically enter all of the above details for you, but only if the rates it depends on are kept up to date (see “Life, Commission, Calculate Button”).
Invoiced Separately or Grouped
Typically each individual sum of initial commission is invoiced separately, while the many small sums of monthly renewal commission received from each company get lumped together in a single invoice (e.g. Norwich Union renewals for July). Hence the top, initial commission, drop-down entitled “Invoice separately or grouped” should typically be set to “Separately”, while the lower, renewal commission one should be set to “Grouped”. You are recommended to follow this procedure, though ultimately it is just a matter of taste. However be warned that if you post all your renewal commissions individually then your Sales Ledger is likely to become massive.