The Premier Insurance Company of Massachusetts

Producers Compensation Disclosure

Producers

We primarily sell our insurance products and services through an extensive network of independent insurance agents and brokers, and we consider this the preferred way of distributing our products. We call these independent agents and brokers "producers."

Producers are not our employees. However, producers may receive compensation from us for placing your insurance with us. This is an overview of how we compensate producers.

Producer Compensation

We design our compensation system to encourage producers to sell our products, to assist us in evaluating risks and servicing accounts, and to maintain a volume of profitable business with us. Our compensation programs fall into three basic types: 1) Commission; 2) Contingent Commission; and 3) Business Production Incentives. We might not pay all these types of compensation, or any compensation, to a producer who places a policy with us.

• Commission Programs
  We generally pay producers a fixed commission for business placed with us. We pay commission on new and renewal policies. This commission is usually a fixed percentage of the premium a policyholder pays. The percentage varies according to factors such as the type of business and type of risk.
• Contingent Commission Programs
  
• Contingent commission, sometimes referred to as a performance plan or a profit incentive program, provides for payment when the producer achieves pre-set goals.. We normally evaluate performance against the pre-set goals annually. If the producer has met the goals, the payment amount is usually a percentage of the premium a producer has placed with us.
• We may also reimburse certain producers’ expenses relating to marketing activities. This may include advertising materials, training expenses, or goods and services that help to promote our company and our products.
• A contingent commission plan generally uses one to several separate goals in combination to determine if a producer will receive a payment. These goals may include:

  Profitability
  We measure a producer’s profitability by comparing losses to premium on the policies the producer placed with us for specific types of insurance. The policies the producer has placed with us must achieve a pre-set ratio of losses to premium to be considered profitable.

  Volume
  We measure the premium volume of policies a producer places with us.

  Growth and Retention
  We measure whether the amount of business a producer has with us is increasing or decreasing. We may look at change in premium volume, change in the actual number of policies, number of newly written polices or a combination of these.

  Tactical Performance
  We measure if a producer has met pre-set tactical performance goals relating to account services, such as the percentage of the producer’s customers who sign up for electronic fund transfer premium payments. These goals may differ by producer.

• Business Production Incentive ProgramsAt times we will provide producers or their employees the opportunity to receive additional compensation for placing specific types of polices with us, helping us pursue new business opportunities with their customers, or performing other tasks. At times this will take the form of a sales contest where cash or other prizes are awarded, while other times it may take the form of additional commission. These incentives are designed to encourage the placement of business with us.

Additional Information

We design our compensation system to encourage producers to sell our products, to assist us in evaluating risks and servicing accounts, and to maintain a volume of profitable business with us. Our compensation programs fall into three basic types: 1) Commission; 2) Contingent Commission; and 3) Business Production Incentives. We might not pay all these types of compensation, or any compensation, to a producer who places a policy with us.