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ACE Producer Compensation

Broker and Independent Agent Compensation

ACE believes that policyholders should have access to information about ACE’s policies and practices related to the payment of commissions to brokers and independent agents. The following policies apply to compensation ACE provides to insurance brokers and independent insurance agents in connection with the placement of property and casualty insurance business with ACE’s offices situated and issuing insurance policies in the United States or its territories. Independent agents represent ACE on a non-exclusive basis. ACE is also represented by exclusive agents, who represent ACE in a particular product or product line and do not offer products of the same type to policyholders for other insurers on a competitive basis. ACE’s exclusive agents are subject to compensation arrangements that may include those described below and other arrangements.

Standard Commissions

A standard commission is a specific dollar amount or percentage commission on the premium set (a) at the time of the purchase, renewal, placement or servicing of a particular insurance policy or (b) on a particular class of policies in advance of the purchase, renewal, placement or servicing of contracts within that class of policies.

ACE may pay standard commissions to brokers and independent agents.  In addition, ACE has several agreements with brokers and/or independent agents to pay an additional commission percentage for certain types of business. 

Contingent Commissions

A contingent commission is compensation paid to a broker or independent agent contingent upon its: (a) placing a particular number of policies or dollar value of premium with ACE; (b) achieving a particular level of growth in the number of policies placed or dollar value of premium with ACE; (c) meeting a particular rate of retention or renewal of policies in force with ACE; or (d) placing or keeping sufficient insurance business with ACE to achieve a particular loss ratio or other measure of profitability.

ACE’s current policy is to only enter into contingent commission agreements with brokers or independent agents when approved by certain ACE senior officers.  ACE has entered into a number of contingent commission arrangements based on premium volume, premium retention and/or loss ratio with its brokers and independent agents on a number of lines of business including Homeowners, Auto Liability, Auto Physical Damage, Valuables (Inland Marine), Earthquake, Recreational Marine, Personal  Umbrella, Commercial Agriculture, and various other commercial lines business.

Supplemental Commissions

A supplemental commission is a specific dollar amount or percentage commission on the premium set prior to purchase or renewal of a particular insurance policy. The percentage paid as supplemental commission for policies in a given year is determined at the beginning of the year based on past agency performance, as measured by profitability, premium retention, and premium growth.

Certain independent agents are eligible to receive supplemental commissions, in addition to a standard commission, as part of the compensation paid by PRS for Homeowners, Auto Liability, Auto Physical Damage, Valuables (Inland Marine), Earthquake, and Umbrella lines of business. Certain independent agents are also eligible to receive supplemental commissions in the existing ACE Recreational Marine and Marine Facilities product lines.    

Disclosure of Policy-Specific Broker Compensation

ACE encourages brokers and independent agents to disclose to policyholders the commission ACE has paid or may pay the broker in connection with the issuance or placement of the policyholder’s ACE policy, particularly where such disclosures are required by law.  ACE will also disclose to its present or prospective policyholders at their request, at the time of issuing a quote or subsequently, the commission (if any) that ACE has paid or may pay to a broker or non-exclusive agent in connection with the issuance or placement of the policyholder’s property and casualty insurance policies issued by ACE offices in the United States or its territories.

Range of Compensation for Insurance Products

Ranges for standard and contingent commission paid by ACE to brokers and independent agents for particular types of insurance products are set forth below. The standard commission data reflects the premiums and standard commissions on policies booked by ACE in 2013. The contingent commission data reflects contingent commissions paid by ACE to independent agents in 2013, which may relate to premium volume from policies covering periods in 2012 or earlier years. The below information is historical only; policies written in 2014 and thereafter may reflect commission rates outside of these ranges. This information will be updated annually.

The ranges for standard commissions cover only policies where ACE actually paid a standard commission and do not reflect situations in which ACE pays no commission (in such situations, the standard commission would be “zero”). The ranges for contingent commissions reflect the fact that many independent agents and brokers have no contingent commission arrangement with ACE; hence, the contingent commission ranges begin at zero.

ACE has excluded from the calculation of the commission range premiums that appear to represent data anomalies.

Contingent commissions paid to independent agents in connection with policies issued in Puerto Rico span various business lines and are not reflected in the below ranges. In 2013, contingent commission payments on policies issued in Puerto Rico ranged from 3% to 5%.

ASL 01 Fire Insurance.

The commission ranges set forth below are applicable to all Fire Insurance Policies, which may include the following coverages: Standard Multiple Peril, Commercial Property, Personal Property and Wind.

Standard Commission: 1% - 35%
Contingent Commission: n/a

ASL 02 Allied Lines Insurance.

The commission ranges set forth below are applicable to all Allied Lines Insurance Policies, which may include the following coverages: Personal Property, Commercial Property and Federal Flood.

Standard Commission: 1% - 28%
Contingent Commission: 0% - 3%

ASL 03 Farmowners Multiple Peril Insurance.

The commission ranges set forth below are applicable to all Farmowners Multiple Peril Insurance Policies, which may include the following coverage: Standard Multiple Peril.

Standard Commission: 12% - 26%
Contingent Commission: 0% - 5%

ASL 04 Homeowners Multiple Peril Insurance.

The commission ranges set forth below are applicable to all Homeowners Multiple Peril Insurance Policies, which may include the following coverages: Standard Multiple Peril and Business Owners Protection.

Standard Commission: 2% - 28%
Contingent Commission: 0-6%

ASL 05 Commercial Multiple Peril Insurance.

The commission ranges set forth below are applicable to all Commercial Multiple Peril Insurance Policies, which may include the following coverages: Standard Multiple Peril, All Risk Property, and Business Owners Protection.

Standard Commission: 1% - 35%
Contingent Commission: 0% - 7%

ASL 08 Ocean Marine Insurance.

The commission ranges set forth below are applicable to all Ocean Marine Insurance Policies, which may include the following coverages: Offshore Property and Offshore Construction.

Standard Commission: 1% - 30%
Contingent Commission: 0% - 14%

ASL 09 Inland Marine Insurance.

The commission ranges set forth below are applicable to all Inland Marine Insurance Policies, which may include the following coverages: Energy Warranty, Offshore Property, Offshore Construction, Hi-Tech Boiler and Machinery, Computer Systems, Weather and Builders Risk.

Standard Commission: 1% - 31%
Contingent Commission: 0-5%

ASL 11 Medical Malpractice Insurance.

The commission ranges set forth below are applicable to all Medical Malpractice Insurance Policies.

Standard Commission: 2% - 26%
Contingent Commission: n/a

ASL 12 Earthquake Insurance.

The commission ranges set forth below are applicable to all Earthquake Insurance Policies, which may include the following coverages: Personal Property and Homeowners.

Standard Commission: 2% - 28%
Contingent Commission: n/a

ASL 16 Workers' Compensation Insurance.

The commission ranges set forth below are applicable to all Workers’ Compensation Insurance Policies, which may also include Excess Workers’ Compensation Insurance.

Standard Commission: 1% - 30%
Contingent Commission:  n/a

ASL 17 Other Liability Insurance.

The commission ranges set forth below are applicable to all Other Liability Insurance Policies, which may include the following coverages: Directors and Officers Liability, Errors and Omissions, General Liability, Miscellaneous Professional Liability, Employment Practices Liability, Contractual Liability, Excess, and Umbrella.

Standard Commission: 1% - 30%
Contingent Commission: 0% - 7%

ASL 18 Product Liability Insurance.

The commission ranges set forth below are applicable to all Product Liability Insurance Policies.

Standard Commission: 3% - 25%
Contingent Commission: n/a

ASL 19 Auto Liability Insurance.

The commission ranges set forth below are applicable to all Auto Liability Insurance Policies, which may include the following coverages: Primary, Excess, Commercial, and Personal.

Standard Commission: 1% - 30%
Contingent Commission: 0-6%

ASL 21 Auto Physical Damage Insurance.

The commission ranges set forth below are applicable to all Auto Physical Damage Insurance Policies, which may include the following coverages: Primary, Excess, Commercial and Personal.

Standard Commission: 5% - 30%
Contingent Commission: n/a

ASL 22 Aircraft (All Perils) Insurance.

The commission ranges set forth below are applicable to all Aircraft All Perils Insurance Policies, which may include the following coverages: Hull, Liability and Satellite Business.

Standard Commission: 2% - 18%
Contingent Commission: n/a

ASL 23 Fidelity Insurance.

The commission ranges set forth below are applicable to all Fidelity Insurance Policies, which may include the following coverages: Crime, Excess Crime, Bond, and Employee Dishonesty.

Standard Commission: 3% - 31%
Contingent Commission: n/a

ASL 24 Surety.

The commission ranges set forth below are applicable to all Surety Bonds, which may include the following types: Conventional, Contract and Court Bond.

Standard Commission: 3% - 48%
Contingent Commission: n/a

ASL 26 Burglary and Theft Insurance.

The commission ranges set forth below are applicable to all Burglary and Theft Insurance Policies, which may include the following coverages: Crime and Excess Crime.

Standard Commission: 4% - 25%
Contingent Commission: n/a

ASL 27 Boiler and Machinery Insurance.

The commission ranges set forth below are applicable to all Boiler and Machinery Insurance Policies, which may include the following coverages: Machinery and Equipment Breakdown.

Standard Commission: 5% - 24%
Contingent Commission: n/a