Overrides are commissions paid in addition to the Normal Commission.  They are usually paid as an offset to expenses, such as phone and rents.  Agencies and producers who pay their own expenses often receive override commissions.

Overrides are sometimes referred to as Overwrites.

How To Convert A Percentage Of Commission Override To A Percentage Of Premium Override

Overrides are often paid to the agency as a percentage of the agency’s commission rather than a percentage of the premium.  However, the agency commission tables are set up as a percentage of premium.  Here’s how to resolve this difference.

To convert the Override Percentage of Commission (POC) to an Override Percentage Of Premium (POP), perform this simple multiplication using the Agency Commission Percentage (ACP).

POP = POC x ACP x 100

Example

The agency gets a basic agency commission of 60% of premium on a product (ACP).  It also receives an override of 8% of the agency commission (POC).  What should be entered as the Override percentage in the commission table (POP)?

POP = Value we’re looking for to put into the rate table as the override.

ACP = 60% (The agency percentage on which the override is paid).

POC = 8% (Override as a percentage of commission in the agency contract).

POP = POC x ACP x 100

?       = .08    x  .60 x 100

POP = .048 x 100   (.048 = 4.8%)

POP = 4.8%        The value entered into the rate table.