Contingent Commission

Published: | Updated: April 21, 2018

Definition - What does Contingent Commission mean?

A contingent commission is a commission that is not paid out when a policy is sold but is, instead, contingent on other factors.

Many insurance companies and reinsurance companies offer contingent commissions instead of traditional commissions to agents and brokers because they believe that they are more beneficial for their companies.

Insuranceopedia explains Contingent Commission

It is common for contingent commissions to be based on the profitability of the policies sold. For example, an insurance company may award a contingent commission to an independent insurance agent if that agent sells policies that are projected to bring in a certain amount of earnings. This is a method insurance and reinsurance companies use to create incentives for the agents and brokers to not only sell policies on their behalf, but sell those that will bring them a greater profit.

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