FAQ - ISMIE Mutual's Relationship
with Brokers
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If I don’t use a broker, and ISMIE does not have to pay commission, why can’t I receive a discount?
- Commissions paid to brokers are part of the overall operating expenses factored into annual premium rates. Throughout the insurance industry – not just medical liability, but also auto, home, health, etc. – it is one of the various operational expenses incurred by an insurance company.
- The basic philosophy of insurance is to spread risk among policyholders based upon the individual insured’s exposure to potential loss. Fair underwriting practice dictates that physicians in different specialties and different geographic locations pay premiums based on the loss history of those specialties and locations. Certain specialties and counties that exhibit similar loss patterns are grouped together. All policyholders share the costs of common operational expenses. Broker commissions are part of those operational expenses that are shared among all policyholders.
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