Commission Tracking Module User Guide

Client Data System Commission Tracking Module User Guide Version 4.1.2

Copyright 2003, E-Z Data, Inc. All Rights Reserved. No part of this documentation may be copied, reproduced, or translated in any form without the prior written consent of E-Z Data, Inc. All product names are trademarks of their respective manufacturers or organizations. 918 East Green Street Pasadena, CA 91106 Telephone: (626) 585-3505 Fax: (626) 440-9097 U.S. toll-free fax: (800) 779-3123 Web: http://www.ez-data.com

Contents Commission Tracking Module Setup... 1 Step 1: Add Vendors... 1 Step 2: Add Products... 2 Individual Products... 2 Group Products... 3 Step 3: Add Commission Schedules... 4 Step 4: Add Agents... 7 Step 5: Add Payout Schedules... 8 Adding Agent Payouts... 8 Adding Standard Payout Schedules... 9 Adding New Policies... 12 Adding Policies from the Pending Case Management Module... 14 Adding Policies from the Group Business Module... 16 Posting Checks from Vendors... 17 Commission Reports... 18 Sample Reports... 19 Aged Commissions Report... 19 Commission Received Discrepancy Report... 20 Commission Report... 21 Commission Statements Report... 22 Annualized Premium Summary Report... 23 Expected Pending Commissions Report... 24 Unpaid Commission Report... 25 Reconciliation Report... 26 Advanced Features... 27 Production/Commission Tab... 27 Production To Date Calculation... 27 Adding Production/Threshold Goals... 27 Complex Excess Calculations... 28 Chargeback/Recapture... 30 Supervisor Overrides... 30 Appendix... 31 Glossary... 31 Index... 33

Commission Tracking Module Setup The Commission Tracking Module (CTM) provides comprehensive methods for setting up commission schedules, and for tracking complex commission calculations. The CTM setup is a multi-step process. It is important to follow the steps in the order that they appear. Step 1: Add Vendors Make certain that there is a record for every vendor that you will be using. To add a vendor: 1. From the CDS desktop, open the File menu and select Vendor-Insurance. 2. Click OK in the Find Insurance Vendor dialog box to open the Insurance Vendor Summary tab. 3. Click the Add Record button to open the Detail tab. 4. Enter pertinent vendor information and then click the Save button. 5. Click the Add Record button under Risk Classes for this Vendor. 6. In the Add a Risk Class dialog box, select or add risk classes and then click the Save & Close button. 7. Return to the Summary tab and repeat Steps 3 6 to add additional vendors. Vendor Record Example In the example below, Applied American Life has been added as a new vendor. The address, phone number, and fax number are displayed. Four risk classes have been defined: Preferred Non-Tobacco, Preferred Tobacco, Standard Non-Tobacco, and Standard Tobacco. The Age calculation is Age Nearest. Page 1

Step 2: Add Products Individual Products Make certain that there is a record for every individual product that you will be selling. To add an individual product: 1. From the CDS desktop, open the File menu and select Product-Insurance. 2. Click OK in the Find Product Detail dialog box to open the Product/Rider Summary tab. 3. Click the Add Record button to open the Product Detail tab. 4. Enter product information on the Product Detail tab and then click the Save button. 5. When prompted, select the risk class(es) for the product and then click OK to finish saving the record. 6. Click the Add Record button under Policy Fee Information to add fee schedules for the product. 7. Return to the Summary tab and repeat Steps 3 6 until all individual products have been added. Individual Product Example In this example, Assurable Life, a UVL product has been added, along with policy fee and risk class information. Page 2

Group Products Make certain that there is a record for every group product that you will be selling. To add a group product: 1. From the CDS desktop, open the File menu and select Group Product. 2. Click OK in the Find Group Product Detail dialog box to open the group product Summary tab. 3. Click the Add Record button to open the Group Product Detail tab. 4. Enter the product information and then click the Save button. 5. Click on the Plan Summary tab. (Retirement and Travel products do not have this tab.) 6. Click the Add Record button to add a plan to the group product. 7. Return to the Summary tab and repeat Steps 3 6 until all group products have been added. Group Product Example The following are examples of the Group Product Detail tab and the Plan Summary tab after adding a group life product from Applied American Life. Page 3

Step 3: Add Commission Schedules Commission schedules specify the commissions that will be paid by a vendor for a product. At least one commission schedule must be defined for each product. Adding commission schedules for individual products: 1. From the CDS desktop, open the File menu and select Product-Insurance. 2. Click OK in the Find Product Detail dialog box to open the product Summary tab. 3. Select a product and then click the Commission Schedule tab. 4. Click the Add Record button. 5. Enter a name for the schedule, the paid mode, and a flat amount (if applicable). Check the Default Schedule box, and add age banding values or face banding values as needed. Example In the following example, the Commission Schedule name is Standard, the Paid Mode is As Paid and the schedule is designated as the Default Schedule. No age or face banding is specified. 6. Click the Add Record button under Commission Schedule to open the Commission Schedule Details dialog box. Page 4

7. Fill in the fields of the Commission Schedule Details box and then click OK to save the schedule. Example In the following example, the first-year commission is specified as 75 Base Points, and 10 Excess Points. 8. Return to the product Summary tab and repeat Steps 3 7 until all products have at least one commission schedule. Adding commission schedules for group products: 1. From the CDS desktop File menu, select Group Product. 2. Click OK in the Find Group Product Detail box to open the product Summary tab. 3. Select a product and then click the Commission Schedule tab. 4. Click the Add Record button. 5. Enter a name for the schedule, the paid mode, and a flat amount (if applicable). Select the Group Policy Schedule box. Select the Default Schedule box if this applies and add Age Band values or Face Band values as needed. 6. Click the Add Record button under Commission Schedule to open the Commission Schedule Details dialog box. 7. Fill in the fields of the Commission Schedule Details box and then click OK. 8. Click the Add Record button under Premium Bands (Group Policy Schedule option must be selected) to open the Group Policy Schedule Details dialog box. Page 5

9. Enter the dollar amount for the band in the Up to Premium field. Enter the number of Commission Points that will apply to the premium band and then click OK. Example In the commission schedule example below, Premium Bands for commissions have been added. The commission point value is 10 for premium up to $5000; the value is 5 for premium up to $10,000; the value is 3.5 for premium up to $20,000; and the value is 3 for premium up to $30,000. 10. Repeat Steps 8 and 9 until all Premium Bands have been added. 11. Click OK in the Commission Schedule dialog box to save the schedule. 12. Return to the product Summary tab and repeat Steps 3 11 until all group products have at least one commission schedule. Page 6

Step 4: Add Agents Add an agent record for each agent whose commissions will be tracked in CTM. To add an agent record: 1. From the CDS desktop, open the File menu and select Agents/Producers. 2. Click OK in the Find Agent/Broker/Producer Information dialog box to open the Summary tab. 3. Click the Add Record button to open a blank record. 4. Enter the personal information for the agent and then click the Save button. (The CTM Information section is only available to CTM Level B and Level C licenses). 5. Return to the Summary tab and repeat Steps 3 and 4 until all agents have been added. Example After creating an agent record, a supervisor and an override can be assigned. In the example below, Mark Paladian is set up as Nancy Ridder s supervisor with a 10% override on all business that Nancy writes, regardless of the product. Note: If you are using the stand-alone version of CDS, the CTM setup is complete. Skip to the Adding New Policies topic on page 12. Page 7

Step 5: Add Payout Schedules Payout schedules specify the amount of commission that an agent will receive for selling a particular product. Each product must have a separate payout schedule for each agent that sells the product. Payout schedules for a product can be created on an individual basis or from templates that have been added to the Standard Payout Schedule tab. To determine the best method for adding payout schedules, calculate the total number of payouts by multiplying the number of agents by the number of products (e.g., 5 agents 18 products = 90 payouts). If the total number of payouts is below 100, follow the steps under Adding Agent Payouts. Follow the steps under Adding Standard Payout Schedules if the total number of payouts is 100 or above. Adding Agent Payouts 1. From the CDS desktop, open the File menu and select Product-Insurance. 2. Click OK in the Find Product Detail dialog box to open the product Summary tab. 3. Select a product and then click the Agent Payout tab. 4. Click the Add Record button to open the Agent Payout dialog box. 5. Enter a name for the Agent Payout record. 6. In the Writing Agent field, enter the name of the agent, or click the field-name button to locate and select an agent s name. 7. In the Supervisor field, enter the name of the agent s supervisor, or click the field-name button to locate and select the supervisor s name. 8. Select the Default Payout Schedule check box if this applies. 9. In the First Year and Renewal group boxes, enter the perecentage that the agent will be paid for each type of commission and select the value (Premium or Expected Commission) this percentage applies to. After entering a value in the Base Percent field, that value will be copied to all fields in the column. After entering a value in the Base Percent Of field, that value will be copied to all fields in the column. 10. If a supervisor s name was entered, click the Show Supervisor s Schedule button and enter the First Year and Renewal percentages for the supervisor and select the value (Premium, Expected Commission or Agent Payout) this percentage applies to. After entering a value in the Base Percent field, that value will be copied to all fields in the column. After entering a value in the Base Percent Of field, that value will be copied to all fields in the column. 11. Click OK to save the Agent Payout record. 12. Repeat Steps 4 11 to add payout records to the product for all other agents. 13. Return to the Summary tab and repeat Steps 3 12 to create Agent Payout records for all other products. Page 8

Agent Payout Example In the example below, Nancy Ridder is scheduled to receive 75% of the commission that the vendor pays for selling the Assurable Life product. Since Nancy will be receiving 75% of all commission types. The Supervisor field was left blank because Eileen Warnings is listed as Nancy s supervisor in her agent record. After creating agent payout records for every product, new policies can be added. Refer to Adding New Policies on page 12. Adding Standard Payout Schedules Standard Payout Schedules are used as templates to mass create individual payouts for each agent. Each template corresponds to one commission level for a product. Each commission level is entered in alphabetical order, with the highest commission at Level A. 1. From the CDS desktop, open the File menu and select Product-Insurance. 2. Click OK in the Find Product Detail dialog box to open the product Summary tab. 3. Select a product on the Summary tab and then click the Standard Payout Schedule tab. 4. Click the Add Record button to open the Standard Payout Schedule dialog box. (Refer to the example on page 11.) 5. Select a letter for the commission level from the drop-down list in the Level field. 6. In the First Year and Renewal group boxes, enter the percentage that the agent will be paid for each type of commission and select the value (Premium or Expected Commission) this percentage applies to. After entering a value in the Base Percent field, that value will be copied to all fields in the column. After entering a value in the Base Percent Of field, that value will be copied to all fields in the column. 7. Click OK to save the Standard Payout Schedule. 8. Repeat Steps 4-7 to define other levels for the selected product. 9. Return to the Summary tab and select any other products that will have commission levels that are the same as those defined in Steps 4-7. Page 9

10. Open the Tools menu and select Copy Standard Payout Schedule. 11. From the drop-down list in the Copy Standard Payout Schedules dialog box, select the product that you want to copy the payout schedules from. 12. Click OK to copy the payout schedules to all of the products selected on the Summary tab. 13. Close the Product-Insurance window to return to the CDS desktop. 14. Select Agents/Producers from the File menu. 15. Click OK in the Find Agent/Broker/Producer Information dialog box to open the Agent Summary tab. 16. Tag all agent records on the Summary tab that will be assigned to the same commission Level. (Refer to the example on page 11.) 17. Select Mass Agent s Payout Creation from the Tools menu. 18. When the Mass Creation of Payout Schedule dialog box opens: a. Select a Level for the schedule from the drop-down list. b. Check the Create default payout schedule box, if applicable. c. Select the Name of a supervisor for the level. d. Select a Supervisor Level or click the Specify Supervisor Override button to enter specific values. 19. Click OK to create the payout schedules. 20. Repeat Steps 16-19 for the remaining commission levels. Page 10

Standard Payout Schedule Example In this example the office has three levels of agents, with three commission levels defined for each product. Level A agents receive 90% of what the vendor pays, Level B agents receive 80%, and Level C agents receive 70%. Expected Commission has been selected in the Percent Of fields because commissions are paid as a percentage of what the vendor pays. The same percentage has been entered for all commission types to eliminate the need to change the schedule if the vendor changes the commission payment method. Selecting Agents for Commission Level Assignment In this example, several agents names are selected for mass creation of payout schedules at one commission level. Page 11

Adding New Policies To add a new policy: 1. From the CDS desktop, open the File menu and select Policies. 2. Click OK in the Find Policy dialog box to open the Policies Summary tab. 3. Click the Add Record button. 4. When the Select Policy Type dialog box opens, select a policy type and then click OK. 5. Enter the basic information, select a Primary Agent from the drop-down list, and enter a policy Status. 6. Click the Save button to open the Interested Parties dialog box. 7. Change the names or relationships in the Interested Parties dialog box if needed and then click the Close button. 8. When prompted, select an option for adding additional agents (split case) to the policy. (Select Yes to add another agent and finish saving the policy, or No to skip this option and finish saving the policy.) Basic Information for a New Policy Joseph Ackerman has purchased an Assurable Life policy with a Basic Face amount of $250,000. He pays a quarterly premium of $1500. Nancy Ridder is the Primary Agent. 9. Click the Commissionable Prem button to open the Premium Breakdown dialog box and enter a target amount for variable products. (Refer to the example below.) 10. Click OK after entering values in the Premium Breakdown dialog box. 11. Click the Save button to save the policy. Page 12

Premium Breakdown Example The Base Commissionable Modal Premium and Modal Fee Premium fields are filled in automatically based on information in the policy and product records. Enter the Target Premium for the policy and then click OK. The Excess Premium field is for information only; actual commission calculations are made by the CTM. Page 13

Adding Policies from the Pending Case Management Module To add a policy from the Pending Case Management Module: 1. From the CDS desktop, open the File menu and select Pending Case Summary. 2. Click OK in the Find Pending Case dialog box to open the Summary tab. 3. Click the Add Record button to open the Pending Case - Contact Selection dialog box. 4. Select an option and then click OK. Select the Create New Contact Record option to open the Quick Add Contact dialog box. Fill in the appropriate information and then click OK to open the Pending Case - Policy Type Selection dialog box. Select the Use Existing Contact option to locate an existing contact. Click OK in the Contact List dialog box to list all contacts. Select a contact on the list and then click the Ok, Select button to open the Pending Case - Policy Type Selection dialog box. 5. Select a Policy Type and then click OK. 6. Leave the Policy Status as Submitted, enter the Basic Policy Information and then click the Save button. 7. When the Policy Agent Relationship dialog box opens: a. Select the agent. b. Enter a Percentage (for split cases). c. Click OK to continue. 8. When the Interested Parties dialog box opens, verify or change the information as needed and then click Close. 9. For split cases, click the Selection button in the Agent Information group box to open the Related Agent List for the policy. (If this is not a split case, skip to Step 18.) 10. Select the primary agent and then click the Modify button. 11. Change the Percentage field to the split percentage value that the primary agent will receive and then click OK. 12. Click the Add Record button to open the Policy Agent Relationship dialog box. 13. Select the other agent that will split the commission with the primary agent, specify the Percentage for the agent and then click OK. 14. Click the Close button to return to the In Underwriting Detail tab. (Refer to the first example below.) 15. Select Issued from the Status drop-down list and then click the Save button. 16. Select the Delivery tab and enter a Policy Date. (Refer to the second example below.) 17. Click the Detail tab, select All Forms In (or any other active status) from the Status dropdown list and then click the Save button. Page 14

Pending Case Management Detail Tab In the following example, Guy Level is the primary agent for a $500,000 Variable Plus policy sold to Jenny Homer. The target premium is $100, with semi-annual premium payments of $500. Pending Case Management Delivery Tab In the following example, the Delivery tab contains information that was automatically transferred from the Detail tab. Page 15

Adding Policies from the Group Business Module To enter a group policy through the Group Business Module: 1. From the CDS desktop, open the File menu and select Group Policy. 2. Click OK in the Find Group Policy dialog box to open the Group Policy Summary tab. 3. Click the Add Record button to open the Select Policy Type dialog box. 4. Select the Policy Type from the list and then click OK. 5. Enter the policy details, and the policy status, and then click the Save button. (Refer to the example below.) 6. Click Yes when prompted to add additional agents if this is a split case; otherwise, click No and skip to Step 7. a. Click the Modify button to modify the Percentage of the first agent and then click OK. b. Click the Add Record button in the Related Agent List to add the second agent. c. Enter the details about the second agent and then click OK. d. Click the Close button to return to the group policy. 7. Click Yes when prompted to add a Class to the policy. 8. When the Plans/Classes dialog box opens, select a Class from the list or click the Add Record button to add a new class. Group Policy Example In the following example, Ed Singer sold a group life product by Applied American Life, with a monthly premium of $2,000, to Smith s Pharmaceuticals. (Other fields in this example are not directly related to the Commission Tracking Module.) Page 16

Posting Checks from Vendors When you receive a check (or statement) from a vendor, post the check and reconcile the expected commissions. To post a check received: 1. From the CDS desktop, open the File menu and select Vendor-Insurance. 2. Click OK in the Find Insurance Vendor dialog box to open the Summary tab. 3. Select the vendor who sent the check and then click the Postings tab. 4. Click the Add Record button. 5. Enter Commission Check Information and then click OK to open the Commission Payment Posting window. 6. Tag each commission payment record with an expected commission due that will be paid by the check received. (Double-click on any commission record to display more details.) 7. Click OK to post the funds of the commission check to the tagged records. If the amount received equals the amount expected, the commission check will be posted immediately and display Reconciled in the status column under Commission Payments Summary. If the amount expected exceeds the amount received, you will be prompted to write off the remaining amount; select Yes to write off the remainder of expected commissions and display Write Off in the status column; select No to keep the posting open and display Open in the status column. (Expected commissions that have not been written off will be listed in the next posting.) Commission Payment Posting Example In the following example, the agency received a commission check for $4,790.92 from Applied American Life. As each record is selected under Commission Due, the value in the Amount Posted field increments by the amount displayed in the Expected column, and the status changes to Reconciled. Information about the distribution of the posted commission funds is displayed under Payments to Agents. Page 17

Commission Reports The Commission Tracking Module includes a wizard for setting up the various options of the commission reports. Several samples of these reports are included in the next section to demonstrate the options. To access the Commission Reports Setup Wizard: 1. From the CDS desktop, open the Reports menu and select Commission Reports. 2. Click the Add button; or select an existing commission report title and click the Modify button. 3. When the dialog box for Step 1 of 6 opens, select the Report Type and then click Next. 4. In Step 2 of 6, select sorting and page break options and then click Next. 5. In Step 3 of 6, select the carrier(s) and then click Next. 6. In Step 4 of 6, select the agent(s) and then click Next. 7. In Step 5 of 6, select the options for paid and/or written business and then click Next. 8. In Step 6 of 6, enter or change the title and description as needed and then click Finish to save the report setup. To run a commission report, select the name of the report on the Commission Report Setup list and then click the Run button. When the Date Range dialog box opens, select a date range and then click OK to run the report. Page 18

Sample Reports Aged Commissions Report This report breaks downs all unpaid commissions into the number of days past due (up to 120 days), for any specified date range. Page 19

Commission Received Discrepancy Report Use this report to locate and resolve problems that cause discrepancies in the distribution of commissions. This report is also useful for identifying lost revenue. Page 20

Commission Report This report lists all commissions and statuses for any specified date range. Page 21

Commission Statements Report This report provides a statement of expected commissions and commissions paid for any specified date range. Include this statement with an agent s commission check as a reference or for reconciliation. Page 22

Annualized Premium Summary Report This report provides a summary view of the annualized premium for paid business in a specified date range. Page 23

Expected Pending Commissions Report This report can be used by agency managers and general agents for estimating future commissions in detail for any specified date range. Page 24

Unpaid Commission Report This report displays the current status of all unpaid commission for the specified date range. Page 25

Reconciliation Report This flexible report supports a variety of commission accounting methods and management strategies by displaying pertinent details about expected and paid commissions within a specified date range. Page 26

Advanced Features Production/Commission Tab The Production/Commission tab contains the calculated year-to-date target premium, earned premium, and commission for a specified production period. The Tolerance field is used to specify the amount (in dollars) that will be automatically written off for the selected vendor. The records under Production/Threshold Goals establish the threshold goals that are used to calculate production bonuses. Production To Date Calculation 1. From the CDS desktop, open the File menu and select Vendor-Insurance. 2. Click OK in the Find Insurance Vendor dialog box to open the Summary tab. 3. Select a vendor on the Summary tab and then click the Production/Commission tab. 4. Under Production Period, enter the From and Thru dates to use for calculating production. 5. Click the Validate button in the Production To Date group box. 6. Click Yes when prompted to validate the vendor record (validation updates the Production To Date fields). Adding Production/Threshold Goals 1. From the CDS desktop, open the File menu and select Vendor-Insurance. 2. Click OK in the Find Insurance Vendor dialog box to open the Summary tab. 3. Select a vendor on the Summary tab and then click the Production/Commission tab. 4. Click the Add Record button under Production/Threshold Goals. 5. When the Vendor Production Threshold dialog box opens: a. Enter the amount of earned premium to use as a threshold. b. Enter a percentage for the bonus amount awarded by the carrier for achieving the specified threshold. c. Select the Retroactive check box if the bonus percentage will apply to previous earned premium as well as current earned premium. d. Click OK to save the Production/Threshold Goal record. 6. Repeat Steps 4 and 5 until all production goals have been added. Page 27

Production/Commission Example After entering the dates for the production period, click the Validate button to update the Production To Date fields. In this example Production Threshold/Goals are set up for $100,000, $500,000, and $1,000,000. Complex Excess Calculations CTM can be used to calculate and track complex excess commissions. For example, set up a firstyear commission schedule with a base percentage that applies to premium up to a target value; set up additional percentages that will apply to multiples of the target premium value. Refer to the example that follows the setup procedure. To set up a complex commission schedule: 1. From the CDS desktop, open the File menu and select Product-Insurance. 2. Click OK in the Find Product Detail dialog box to open the Summary tab. 3. Select a product on the Summary tab and then click the Commission Schedule tab. 4. Click the Add Record button to open the Commission Schedule dialog box. 5. Enter General Information about the schedule and then click the Add Record button under Commission Schedule. 6. When the Commission Schedule Details dialog box opens: a. Enter 1 in the Thru (Years) field. b. Enter 70.2 in the Base Points field. c. Click OK to return to the Commission Schedule window. 7. Click the Add Record button under Excess Commission. Page 28

8. When the Commission Excess dialog box opens: a. Enter 4 in the Times Premium field. b. Enter 7.8 in the Excess Points field and then click OK. c. Click the Add Record button under Excess Commission. d. Enter 9 in the Times Premium field. e. Enter 3.12 in the Excess Points field and then click OK. f. Click the Add Record button under Excess Commission. g. Enter 999 in the Times Premium field. h. Enter 1.56 in the Excess Points field and then click OK. 9. Click OK in the Commission Schedule dialog box to save the schedule. Complex Commission Schedule Example In this example, 70.2% commission (base) is paid for premium up to the target value. Commission for additional premium is paid at 7.8% for amounts up to four times the target premium; 3.12% for the next five multiples of the target premium; and 3.12% for all premiums thereafter. Page 29

Chargeback/Recapture When a policy is terminated and the vendor pays commissions on an annualized or annualizedfirst year only basis, the prepaid commission must be recovered. Whenever a policy with a prepaid commission is cancelled or otherwise made inactive, CTM will prompt for the policy termination date. The termination date and the policy date are used to determine the difference between earned premium and paid commission. When commission must be recovered, a chargeback record is created with a negative commission for the interested parties. This record will be displayed the next time a posting is entered. To create a chargeback: 1. Open a policy record with a premium that is paid annually. 2. Change the Status field from an active status to an inactive status and then click the Save button. 3. When the Commission Chargeback Dialog box opens, enter the termination date of the policy and then click OK. The next time a posting is entered, a chargeback record with a negative commission will be displayed. Supervisor Overrides Supervisor overrides can be added to agent payout records or added when mass creating agent payout schedules. Supervisor overrides can also be added to an individual agent s record. Module licensing controls the number of override levels that can be tracked by CTM. CTM checks for supervisor overrides in the following order: 1. Overrides entered when using the Mass Agents Payouts Creation utility. 2. Overrides in Agent Payout records. 3. Overrides in the individual agents records. When an override is found in an agent s record, CTM checks the record of the agent s supervisor for an override. If the agent s supervisor has an override, the process continues (unless there is a licensing limitation) until a record is found without an override. Page 30

Appendix Glossary 1035 Exchange Certain types of insurance policies that meet the requirements of section 1035 of the Internal Revenue Code may be exchanged without incurring tax liability. A policy exchange that meets these requirements is commonly referred to as a 1035 exchange. Agent Payout Annualized Annualized First Year Only As Paid Base Points Commission Amount Commission Schedule Dump In Points Excess Points Fee Points Flat Extra Points Level 1 Level 5 Lump Sum Modal Premium The commission schedule record that establishes the percentage(s) used to calculate an agent s commission. These calculations may be in points or percentages. A method for calculating a single commission payment based on the amount of premium that covers a twelve-month period, regardless of payment mode. Same as Annualized, but for the first year only. A method of paying commissions as the vendor receives payments from the policyholder. The percentage paid on the base commission. The base is calculated by subtracting any fees, the target amount, and any conversion amounts from the total premium paid. Used to specify a flat rate commission paid by the vendor for a product, regardless of the premium paid. A record that establishes the amount and mode of commission paid for each category of premium. The percentage paid as commission on a lump sum amount that is paid in addition to the premium. (The lump sum adds immediate cash value to Whole and Variable Life Products.) The percentage paid as commission on excess premium, as determined by subtracting the fee, target, and conversion amounts from the total premium paid. (Excess premium can only be calculated if there is a target premium.) The percentage paid as commission on the policy fee. The percentage paid as commission on extra premium charged by a vendor for non-standard rated policies. Expense Reimbursement Account (ERA) commission levels. Used in states where laws have been passed that place a cap on the amount of base commission that can be paid. ERA commission is typically in addition to the base commission. See Dump In Points The total premium to be paid for a policy after modal factor calculations. Page 31

Paid Mode Percentage Points Posting Standard Payout Schedule Target Premium Threshold Bonus Tolerance The frequency of payment (e.g., Annual, Monthly, Quarterly). In CTM, percentage is used to calculate an agent s commission as a percentage of the COMMISSION paid to an agency by the product vendor. In CTM, points correlate to the percentage of a product PREMIUM that is paid as commission. A record of expected commissions, amounts received, and payments to agents. A record that establishes the amount of commission at one level of a tiered or hierarchical system. The amount of premium set by the vendor as a goal for agents to achieve when selling a particular product. A bonus paid by a vendor to an agency with sales that exceed a set premium level (threshold). The monetary amount that an AGENCY is willing to write off (absorb the loss) if a commission payment from a vendor is less than expected. Page 32

Index 1035 Exchange, definition of...35 Adding New Policies...15 Adding Production/Threshold Goals...31 Adding Products Group Products...6 Individual Products...5 Adding Vendors...4 Agent Payout, definition of...35 Agents Adding Agent Payouts...11 Adding Agent Records...10 Annualized, definition of...35 As Paid, definition of...35 Base Points, definition of...35 Chargeback/Recapture...34 Commission Level Assignment...14 Commission Reports Aged Commission Report...23 Annualized Premium Summary Report...27 Commission Received Discrepancy Report.24 Commission Report...25 Commission Statements Report...26 Expected Pending Commissions Report...28 Reconciliation Report...30 Setup Wizard...22 Unpaid Commissions Report...29 Commission Schedule, definition of...35 Commission Schedules, Adding Group Products...8 Individual Products...7 Commissions Complex Excess Calculations...32 Copying Standard Payout Schedules...13 Dump In Points, definition of...35 Excess Points, definition of...35 Expense Reimbursement Account (ERA)... 35 Fee Points, definition of... 35 Flat Extra Points, definition of... 35 Lump Sum, definition of... 35 Mass Agent s Payout Creation... 13 Modal Premium, definition of... 35 Overrides, Supervisor... 34 Paid Mode, definition of... 36 Payout Schedules Adding Agent Payouts... 11 Adding Standard Payout Schedules... 12 Copying Standard Payout Schedules... 13 definition... 36 Mass Creation of Agent Payouts... 13 Pending Case Management Adding Policies... 17 Pending Case Management Delivery Tab... 18 Pending Case Management Detail Tab... 18 Percentage definition... 36 Points definition... 36 Policies Adding from the Group Business Module... 19 Adding from the Pending Case Management Module... 17 Posting Checks from Vendors... 21 Posting, definition of... 36 Premium Breakdown... 16 Production To Date Calculation... 31 Production/Commission Tab... 31 Supervisor Overrides... 34 Target Premium, definition of... 36 Threshold Bonus, definition of... 36 Tolerance, definition of... 36 Page 33