Commission Summaries
Here at NFP, we act as an intermediary between you, the consumer, and the product provider 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 for 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, remuneration is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer. The amount of remuneration is generally directly related to the value of the products sold.
There are different types of remuneration/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/amount invested/amount borrowed.
Trail/Renewal commission model: Further payments at intervals are paid throughout the life span of the product.
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.
General insurance products
General insurance products, such as motor, home, travel, health, retail or liability insurance, are typically subject to a single or standard commission model, based on the amount of premium charged for the insurance product.
Clawback
If we receive commission from a product provider [and off-set the commission against the fee which we would otherwise have charged you] but the commission is subsequently clawed-back by the provider because of early encashment by you or because of the transferring of the assets or business to another provider or in any circumstances consequent on your actions or omissions, we will charge a fee to you that is equal to [100% of] the clawed-back commission. That fee will be owing in simple contract upon the claw-back of the commission.
Fees
The firm may also be remunerated by fee by the product producer such as policy fee, admin fee, or in the case of investment firms, advisory fees.
Preferred Provider Rate
Other Fees, Administrative Costs/ Non-Monetary Benefits
The firm may also be in receipt of other fees, administrative costs, or non-monetary benefits such as:
- Attendance at product provider educational seminars
- Assistance with Advertising/Branding
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