Glossary
Gross Premium
The total amount charged for a policy before deducting commission, and generally before taxes and fees are separated out.
Gross premium is the top-line figure on an invoice: what the insured is asked to pay for the coverage itself. Commission is calculated as a percentage of it.
Precision about what gross premium includes matters at reconciliation. If the agency's figure includes fees and taxes while the carrier's does not, expected commission will be overstated on every single line.
See also
- Net Premium — Premium after commission is deducted — the amount an agency actually remits to the carrier under agency bill.
- Policy Fee — A flat charge added to a policy by the carrier or general agent to cover issuance costs, usually fully earned and non-re…
- Written Premium — The total premium on policies an agency has bound during a period, regardless of whether it has been collected or earned…