TN 9 (05-90)

RS 02505.165 How to Treat Renewal Commissions Paid on a Commuted Value Basis

A. POLICY

Commuted value payments are earned in the same way ordinary renewal commissions are earned depending on whether the agent is an employee or self-employed (RS 02505.160).

B. INTRODUCTION

Some insurance companies make monthly payments based on specific insurance policies written and kept in force during a preceding period. The amount is:

  • computed on the policies involved,

  • in addition to regular renewals on other policies, and

  • not paid on account of retirement.

In other companies, agents relinquish anticipated renewal commissions in exchange for a different benefit or specific cash amount.

Such renewal commissions are paid on a commuted value basis. There is no industry-wide standard for determining the value of relinquished renewal commissions.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0302505165
RS 02505.165 - How to Treat Renewal Commissions Paid on a Commuted Value Basis - 09/17/2004
Batch run: 01/27/2009
Rev:09/17/2004