FAQ - ISMIE Mutual's Relationship
with Brokers
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How are brokers compensated?
- Brokers are compensated through the payment of commissions. Even though it is the policyholder who decides to use the services of a broker, it is the insurance company that actually pays the commission. This is true in any line of insurance – whether it be auto, home, medical liability, health, etc.
- The amount of commission that ISMIE pays a broker is a percentage of the policyholder’s annual premium.
- The commissions paid to brokers are but one part of ISMIE’s overall administrative and operating costs. All such administrative costs are included in the development of ISMIE’s rates. This is standard insurance industry practice. An insurance company’s rates must account for both loss costs, as well as all of the expenses necessary to manage the company’s activities.
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