Product commission configuration

For each product version, you can define some configuration related to product commission.

1. Product Commission (%): the percentage of product commission over Gross⁽¹⁾/Net⁽²⁾ policy premium.

   1. Usually, the percentage of product commission is provided over Gross premium, because it reflects the money the company earned from the policy.

2. Option “Should Convert Product Commission Rate From Based On Gross Premium To Based On Net Premium”: defined percentage in (1) is over Net or Gross Premium.

   1. If the option is unchecked, product commission amount = Product Commission (%) * Running Total⁽³⁾.

   2. If the option is checked, product commission amount = Running Total * [Product Commission (%)/(1-Product Commission (%)].

3. Option “Is The Product Commission Amount At Cost”: defined whether Product Commission Amount should be added to Running Total or not.

   1. If the option is unchecked, product commission amount is ADDED to Running Total. This option usually goes with Option “Should Convert Product Commission Rate From Based On Gross Premium To Based On Net Premium” = checked.

   2. If the option is checked, it means Product Commission is already included in Tariff Calculation. Therefore, product commission amount is NOT added to Running Total. This option usually goes with Option “Should Convert Product Commission Rate From Based On Gross Premium To Based On Net Premium” = Unchecked.

^{(1) Gross policy premium: in this context, this term means premium that already includes all pricing components such as Product Commission Amount, Underwriting adjustment, Discounts, Tax,…}

^{(2) Net policy premium: in this context, this term means premium is purely tariff premium, and it does not include other pricing components.}

^{(3) Running Total: there are multiple pricing components such as Tariff premium, Underwriting adjustment, discounts,… Running Total is the value of premium after applying some components.}