Glossary
Policy Fee
A flat charge added to a policy by the carrier or general agent to cover issuance costs, usually fully earned and non-refundable.
Unlike premium, a policy fee is typically fully earned at inception, meaning it is not refunded pro rata if the policy cancels early. It appears alongside premium on the declarations and the invoice.
Fees usually attract no commission, so treating them as premium inflates expected commission and produces phantom variances at reconciliation. Separating fee from premium at import is what prevents that.
See also
- Broker Fee — A charge an agency bills a client for its own services, separate from the premium and the commission the carrier pays.
- Statement Variance — The difference between the commission a carrier paid on a transaction and the amount the agency expected, calculated as …
- Net Premium — Premium after commission is deducted — the amount an agency actually remits to the carrier under agency bill.