REMUNERATION ARRANGEMENTS

We, JMM Insurance (Ireland) Limited, act as a Binding Underwriter, and occasionally as an intermediary (Broker) between you, our client, and the Active Underwriter with whom we place your business.

 

The Background

Pursuant to provision 4.58A of the Central Bank of Ireland’s September 2019 Addendum to the Consumer Protection Code, all intermediaries, must make available in their public offices, or on their website if they have one, a summary of the details of all arrangements of any fee, commission, other reward or remuneration provided to the intermediary which it has agreed with its product producers.

 

What is Commission?

For the purpose of this document, commission is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer.  The amount of commission is generally directly related to the quantity or value of the products sold.

There are different types of commission models:

Single Commission Model: Where payment is made to the intermediary shortly after the sale is completed and is based on a percentage of the premium paid.

Indemnity Commission: Indemnity Commission is the term used to describe a commission payment made before the commission is deemed to be ‘earned’. Indemnity commission may be subject to a clawback (see below) if the consumer lapses or cancels the product before the commission is deemed to be earned.

Other forms of Indemnity Commission are advances of commission for future sales granted to intermediaries in order to assist with set up costs or business development.

Profit Share Arrangements: In some cases, the intermediary may be a party to a profit-share arrangement with a product provider and will earn additional commission. Any business arranged with these product providers on a client’s behalf will be placed with the product provider because that product is at the time of placement, the most suitable to meet the client’s requirements, taking all the client’s relevant information, demands and needs into account.

Clawback: Clawback is an obligation on the intermediary to repay unearned commission. Commission can be paid directly after a contract is concluded but is not deemed to be ‘earned’ until after a specified period of time. If the consumer cancels or withdraws from the financial product within the specified time, the intermediary must return commission to the product producer.

Outlined below is a list of the providers that our firm deals with – for ease of reference in alphabetical order:

ARAG plc:  Up to 15%

Lloyd’s Brussels S.A.:  Up to 30%