The Commission Distribution holds the hierarchy of Agents and their associated rates for a Policy. It is set in a Policy during close of its first Commission Cycle or if it is edited and saved. When the system creates a Commission Distribution for a Policy it will consider any Alternate Contracts or Alternate Upline values from Custom Settings. Commission Distributions can also be created or updated with an import.
Policy List page – line options highlighting option to access Commission Distribution
Commission Distribution page
Commission Distribution page - after selecting edit
Commission Distribution and Locked Rates
The rates end up the same format in the Commission Distribution of a Policy. When the source is a Conventional Rate, whatever rate (percentage or fixed) is just brought into the Commission Distribution. If the rate is 30% (or $30 Fixed) in the Plan Rates, then you see $30% or $30 in the Commission Distribution. When the source Contract Commission Rate is fixed, the rate is calculated to be added to the previous Agent’s rate in the commission Distribution. So, if the previous rate in the Commission Distribution is 15% or $15, and the Locked Rate in the next Agents Commission Rate is 5% or $5, then what will be displayed in the Commission Distribution will be 20% or $20.
Examples:
Conventional Rates: If the rates entered in the Plan Rates set for Conventional Rates for respective levels 1,2,3,4 are 30%, 35%, 40%, and 50%, that is what appears in the Commission Distribution (30%,40%,45%,50%). Then in the cycle calculations it will subtract the previous Agents rate so each will get paid at a respective rate of 30%, 10% (30-40), 5% (40-45), and 5% (45-40).
Commission Distribution created with Conventional Rates:
Locked Rates: For this example, levels 1,2, and 4 are conventional but level 3 set for locked rates at 0%. So, the respective rates in the Contract commission rate pages are 30%, 35%, 0% (locked), 50%. To create the commission distribution, for the conventional it will just bring in the rate as it is, but for the Locked rate it will add the locked rate amount to the previous rate.
Contract Commission Rate page portion showing Locked Rates option and Contract Rate set at 0%.
Commission Distribution displaying rates with one from Locked Rates highlighted.
When the rates used to make the Commission Distribution are from locked Rates, there will be an ‘lock’ icon for that Agent’s rates. If Edit is used and the rate is manually changed, then the lock icon will no longer be displayed. When commissions are calculated in the cycle, the rates displayed in the commission Distribution from both sources will calculate the same way, Agent’s rate less the rate of the Agent before them. So, in the previous example the level 3 Agent will received 35% - 35% or 0% x Premium.
Editing Commission Distributions
Selecting Edit from the Commission Distribution page opens the page for the following:
- Change individual values for: From Month, To Month, Rate, Fixed Amount.
- Add or remove rows of rates.
- Add or remove Agents.
- Reset the Commission Distribution based on current values.
There are validations on changing values. From Month and To Month cannot overlap. Rates or Fixed Amounts cannot be less than lower-level Agents. The Writing Agent on the Policy needs to be the same as the Level 1 Agent. The top-level Agent needs to be one with ‘self’ as their Upline.
Editing a Commission Distribution with Locked Rates does not automatically change the rate to what was intended with the locked Rates. So, in the previous example, levels 1,2, and 4 are conventional but level 3 set for locked rates at 0%. So, the respective rates in the Contract commission rate pages are 30%, 35%, 0% (locked), 50%. In the Commission Distribution it would display rates of 30%, 35%, 35% and 50%. If you edited the second level Agent to 32%, if you still wanted the third level Agent to have 0% Commission, you would need to change the third level Agent to also be 32%. Also, if an Agent had the locked rate icon prior to editing, after editing the rates for the Agent, the locked Rate icon will no longer be displayed.
Selecting Reset will generate the Commission Distribution with current values. The new Commission will reverse any previous changes and generate one that picks up current values for Writing Agent, Upline and/or Alternate Contract values of the Agents, assigned Contracts or Alternate Contracts of the Agents, and rates within the Contracts. Any rates tied to Locked Rates would show the Locked Rate icon.
Split commissions can be achieved by manually adding an Agent to the Commission Distribution and then making the first Agent to have half of the commission rate, and the next Agent with the full amount to be split.
If editing a Transaction that is in Pending Status, when saving a popup will display that changing the Transaction will cancel the Commission Cycle and ask if the change should continue. This is done so that the data for records used in a Commission Cycle are not changed and then not match values used for Calculating Commissions. After selecting continue going back to the Run Commissions page will show a message that the Cycle has been abandoned and is no longer accessible. A new Commission Cycle will need to be run.
Commission Distribution values are typically imported for ‘Book of Business’ policies where a Policy was originally in a legacy system and then moved to Comissio. This allows Comissio to pick up calculating commissions on whatever month is now current at the previous rates and associated hierarchy instead of generating a new Commission Distribution based on the current Agent Upline values, Contracts, and Commission Rates.
Policy Commission Distribution Reset
This feature is to allow multiple Policies to have their Commission Distribution ‘reset’ or updated to reflect current factors. It is the same process that can be done within a single policy when going to the Policy details > Commissions > Edit > Reset.
For this process, a template is filled out with the Policy Numbers and associated Issuers of the Policies that are desired to be reset. It is a similar process to imports, but the action is taken from a page accessed from the Utilities menu. You navigate to the page, choose your file, and select Update. You will then be taken to the file history page to see the progress of your file and see any errors or warnings if they exist.
It is critical to consider all the factors that will affect the Commission Distribution that will generate and replace the current one. Changes in any one of these factors will affect the distribution:
- Agents Contract and Alternate Contracts
- Agents Upline and Alternate Upline
- Commission Plan Rates
- Writing Agent in the Policy
You may want to do a few replacements of the distribution manually to confirm the end results.