Glossary
Net Premium
Premium after commission is deducted — the amount an agency actually remits to the carrier under agency bill.
Net premium is gross premium less the agency's commission. Under agency bill this is the number that leaves the trust account when the remittance is made.
It is the natural cross-check on a commission statement: gross premium minus net remitted should equal commission retained. When it does not, either the rate applied or the premium basis is wrong.
See also
- Gross Premium — The total amount charged for a policy before deducting commission, and generally before taxes and fees are separated out…
- Remittance — The payment an agency sends a carrier for premiums it has collected on the carrier's behalf, net of the commission it re…
- Agency Bill — A billing arrangement in which the agency invoices the insured, collects the premium, and remits it to the carrier net o…