A carrier commission statement looks like a list of numbers. It is closer to a ledger written in the carrier's own shorthand. Every carrier picks its own column names, sign conventions, and ways of grouping transactions.
This article covers what most statements contain and what each part tells you. It won't make the next step easy. Reading a statement is the smaller job. Checking it against your book is the larger one.
Start with the header
Before any line item, work out whose money this is and what period it covers. The header usually carries the carrier name, your agency or producer code, the statement date, and the period in which the transactions were processed.
Three things go wrong here more often than people expect.
More than one code. An agency with several producer codes, or one that writes through a network or aggregator, can receive several statements from a single carrier. A statement you never received looks the same as commission you never earned.
Statement date versus processing date. The statement date is when the document was produced. The transactions on it may have been processed weeks earlier, and the policy effective dates can be older still.
A statement that covers only part of the carrier. Some carriers issue separate statements by line of business or by program. The one in front of you may be one of several.
The columns
Names differ, but most statements carry some version of these.
- Policy number. The key everything else hangs on. It may be formatted differently from your system: a prefix, a term suffix, no dashes.
- Insured name. Useful as a fallback match. Often truncated or reordered.
- Transaction type. New business, renewal, endorsement, cancellation, audit, and so on. Some carriers use only abbreviations. This column largely decides which commission rate should apply.
- Effective date. The date of the policy term or the transaction. It is not the date you were paid.
- Premium. The premium the commission was calculated on. A statement may use written or earned premium, net or gross, and it doesn't always say which.
- Rate. The commission rate applied. Some statements print it. Others leave you to divide commission by premium.
- Commission. The amount paid or taken back on that line. Check the sign convention: some carriers print negatives in parentheses, some with a minus sign, some in a separate debit column.
A short example
These are invented lines from an invented carrier.
| Policy | Type | Effective | Premium | Rate | Commission |
|---|---|---|---|---|---|
| EX-20114 | New | Jul 8 | 3,200.00 | 15% | 480.00 |
| EX-20087-01 | Renewal | Jul 1 | 2,100.00 | 10% | 210.00 |
| EX-19932 | Endorsement | Jun 20 | -400.00 | 12% | -48.00 |
| EX-19410 | Cancel | Mar 2 | -1,750.00 | 12% | -210.00 |
Even four lines raise questions. The renewal paid 10%. Is that the renewal rate in your agreement? The second policy number carries a suffix your system may not have. The last line is a cancellation on a policy that went effective in March, appearing on a July statement. That is a chargeback, and it deserves its own look: was the return premium right, and was it taken at the rate it was originally paid?
Adjustments and the bottom of the page
After the policy lines, many statements add sections that don't belong to any one policy: carry-forward balances from earlier months, fees, advances, corrections. Then come the totals.
Two habits help here.
First, check that the lines add up to the total the carrier prints. A gap can mean a line was dropped when the PDF was produced, or that a prior balance has been folded in without a label.
Second, check that the total matches the deposit. On direct bill, the payment that reached your bank should equal the statement's net amount. If it doesn't, the difference needs an explanation, and you want that explanation to come from the carrier.
What usually isn't on the statement
Contingent commission is generally paid and reported separately, under its own terms, often once a year. Overrides may arrive the same way. Don't expect an ordinary monthly statement to reconcile to either.
Why the format makes it harder
Some carriers send CSV or Excel files. Many send PDFs, and a PDF is a picture of a table. Extracting it can merge columns, split a long insured name across two rows, or drop a negative sign, and a dropped sign is exactly the kind of error that survives into a total.
None of this is difficult in principle. It is slow, and each carrier has its own quirks, so the work grows with every carrier you write with.
After reading: what to compare
Reading tells you what the carrier says it paid. To know whether that is right, two checks follow:
- Every line has to be matched to a policy in your book and tested against the rate you should have received.
- Every policy in your book has to be accounted for in turn. The absence of a line is not visible on a statement, and absence is where a missing renewal hides.
The second check is the one people skip, because nothing on the page prompts it. A statement can be internally perfect and still be missing a policy that should be on it.
Statements and your own records also disagree for ordinary reasons: timing, policy number formats, premium bases, transfers. Some differences are legitimate and some aren't. Telling them apart is the work.
The scale problem
An agency with a handful of carriers can do this carefully for a while. As the number of carriers, producers, and codes grows, so does the number of formats to parse and the number of places a line can quietly fall out. That recurring comparison, every policy against every statement, is what we are building Lapidar to do. It isn't available yet.
Lapidar checks carrier commission statements against your book. To follow along, join the early access list at getlapidar.com.
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