Commission Statement
A monthly or quarterly report from a carrier or wholesaler detailing commissions paid to the agency by policy, transaction, and effective date.
What It Is
A Commission Statement is the periodic accounting document a carrier, MGA, or wholesale broker sends to the agency that lists every transaction on which commission was paid during the statement period. Each line typically includes the named insured, policy number, effective date, transaction type (new, renewal, endorsement, audit, cancellation), written premium, commission rate, and commission amount.
Statements arrive monthly for most direct carriers and quarterly for many wholesalers and program markets. They may be delivered as PDF, CSV, fixed-width text, or downloaded from a carrier portal. Larger carriers often send detail and summary statements together.
Commission Statements are the primary input to agency revenue accounting. They feed into the AMS as expected and received commissions, drive producer compensation calculations, and form the basis for any commission dispute or audit with the carrier.
Why It Matters for Brokers
Commission revenue is the lifeblood of an independent agency, yet industry studies suggest 1 to 3 percent of commissions are underpaid, missed, or misapplied each year. Manual reconciliation against the AMS is time intensive and most agencies sample rather than match every line. Missed commissions on a $50 million premium book at 12 percent average compensation represent $60,000 to $180,000 in annual leakage. Accurate reconciliation also protects producer trust, since incorrect commission calculations are a top source of producer turnover.
Real-World Example
An agency receives a monthly statement from a carrier showing 412 transactions and $74,300 in commissions. The accounting team uploads the file and the system matches each line to the AMS. Three policies that were endorsed mid-month are missing from the statement, and one renewal was paid at 10 percent instead of the contracted 12.5 percent. The discrepancies total $2,840, which the agency disputes and recovers within 30 days.
Common Mistakes
- 1Spot-checking statements rather than matching every line, which lets small underpayments compound into six-figure annual leakage.
- 2Failing to track expected commissions in the AMS, which makes it impossible to identify policies that were bound but never paid.
- 3Accepting carrier rate changes without confirming them against the producer agreement, leading to silent commission step-downs.
- 4Treating wholesaler statements as final without reconciling against the underlying carrier commission, which often reveals retained spreads.
How brokerageaudit.com Handles This
Commission Reconciliation ingests statements in any format, normalizes the data, and matches every line to the AMS policy record. The Review Queue surfaces unmatched transactions, rate variances, and missing renewals so accounting can dispute discrepancies with carriers before quarter close.