The Hartford sells its traditional insurance products and services through insurance agents and brokers, commonly referred to as "producers." These producers are generally not our employees. Producers also include firms that we engage to sell our traditional insurance products, such as broker/dealers. The Hartford compensates producers for the sale and service of its products. A producer may receive one or more of the below payments, depending on the producer's business relationship with us. Compensation arrangements pertaining to our variable insurance and non-insurance products are more particularly described in our prospectuses.
Base Commission. Producers are generally paid a base commission for the sale and service of new and renewal policies placed with us. The base commission is usually a fixed percentage of the policy premium. The percentage may vary depending on certain factors such as the type of product, risk classification, producer size, state where the risk is located or services provided to the policyholder.
Contingent Commission. Certain producers may participate in contingent commission programs we offer. Eligibility for, and the amount of, contingent commission depends upon a producer's ability to meet certain production, growth, profitability or other quality and performance objectives established by us. Contingent commission is not offered for all products and lines of business. For example, contingent commission is not offered in our terminal/maturity funding group annuity line of business.
Other Payments, Benefits and Compensation. Certain producers may receive other payments, benefits and compensation from us, which may also depend on the producer meeting production and other performance objectives established by us. These other payments, benefits and compensation may include:
Individual Producer Incentive Awards
We may provide individual producers and licensed customer service representatives employed by an agency with incentives for placing business with us. These incentives may be in the form of cash or non-cash awards based on the number of policies written or other performance objectives established by us. Awards of this type are not available for all products and lines of business. For example, these individual producer awards are not made in connection with the sale of variable products.
Marketing and Other Support
We may pay for or subsidize a producer's marketing efforts and other business goals. These payments may include, but are not limited to, items such as continuing education, training expenses, lead generation services, advertising assistance, sales and business meetings or other services that help the producer promote us and our products.
We may provide certain producers with other benefits, including, but not limited to, entertainment, tickets to sporting events, travel, gifts, branded merchandise, and attendance at corporate-sponsored programs, including accommodations, meals and gratuities.
We may enter into relationships with producers to receive services in addition to those typically provided by a producer. In these instances, it may be appropriate for us to pay service fees to the producer. These fees may include, but are not limited to, specific administrative service fees.
Advances and Loans
In certain circumstances, we may advance commission or incentive payments to a producer or make a loan to a producer. These advances and loans may be made interest free or at a below-market interest rate and repayment may be offset against future earned compensation or forgiven based on achievement of production or other performance objectives established by us.
Interest on Premiums Collected
Interest earned on premiums collected by producers and placed on deposit before having to be paid to us are generally retained by the producer, as permitted by law.
Surplus Lines Insurance Brokers and Employees
We may distribute certain products and services through surplus lines insurance brokers. These individuals and firms generally are compensated in the same manner as producers, described above. We also have employees who may sell insurance. In addition to their regular salary, these employees may receive additional cash or non-cash compensation based on the number of policies sold or other performance objectives established by us.
Note: We may also pay compensation, including endorsement fees, royalty fees and administrative service fees, to associations and other entities that endorse The Hartford and promote the sale of our products and services. Some producers may charge their customers a fee on their own account related to services they provide to customers. Any such fee would not be part of the premium we charge or collect, would not be charged on our behalf, and may be in addition to receiving compensation from us.
Base Commission and Contingent Commission ranges by type of policy for property and casualty lines are available by choosing the appropriate link below.