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GLOSSARY
R
EVENUES
1. Commercial P&C Commissions -
Commission income from commercial property & casualty business,
including surety and bonds, written on either an agency- or direct-billed basis. Includes fees received in lieu of
commissions.
2. Personal P&C Commissions -
Commission income from personal property & casualty business written on
either an agency- or direct-billed basis.
3. P&C Service Fees -
Total income generated from property & casualty loss control and engineering services,
risk management services, claims services, self-insurance programs and other consulting services. Includes
overrides for P&C underwriting and claims fees. Excludes fees received in lieu of commissions.
4. Contingent/Bonus -
Contingent, incentive and bonus income received by the agency from insurance carriers.
5. Group Life & Health -
Total income from group accident and health insurance, life insurance and other group
employee benefits. Includes commissions and fees for the sale of insurance products, pension/profit sharing/
401(k)s, PEOs, and investment products (stock, securities); or for the provision of services including claims
administration and adjusting, risk management consulting as well as cost containment and loss control services
related to Group Life & Health coverage.
6. Individual Life & Health -
Income from the sale of individual life, health and disability products and
services.
7. Investment -
All interest income, dividend income and any other investment income generated by the agency.
Includes late charges and finance charges, gains and/or losses on sales of marketable securities. Excludes
gains and/or losses on the sale of assets (fixed and/or intangible assets) and life insurance proceeds.
8. Miscellaneous -
All other miscellaneous operating income received. Includes countersignature fees, gains or
losses on the sale of assets, life insurance proceeds. Excludes bad debt recoveries and rental income.
9. Total Revenues -
The sum of items 1 through 8.
10. Brokerage Commission Expense -
Commissions paid to other agencies or outside brokers. Excludes
in-house producers compensated on a 1099.
11. Net Revenues -
Total Revenues less Brokerage Commission Expense.
E
XPENSES
12. Total Payroll -
Includes all salaries, commissions, bonuses (including year-end bonuses), discretionary owner
compensation, in-house contract producers compensated on a 1099. Excludes temporary help expense and
deferred compensation.
13. Total Benefits -
Includes expenses for health insurance, medical reimbursement, employee life insurance,
retirement benefits, all expenses related to an Employee Stock Ownership Plan (ESOP/ESOT), payroll taxes,
social security taxes and any other imposed employment taxes.
14. Total Compensation -
The sum of Total Payroll and Benefits.
15. Travel and Entertainment -
Includes airfare, meals, hotels, social & country club dues, and conventions.
Excludes professional club dues such as the Rotary Club, etc. and automobile expenses.
16. Automobile -
Includes lease, gas, maintenance/repair, employee parking, mileage allowances. Excludes
depreciation and auto insurance.
17. Advertising & Promotions -
Includes contest awards, gifts, customer relations functions, promotional
materials, target marketing services, and fees paid to advertising or public relations agencies.
18. Total Selling -
The sum of Travel & Entertainment, Automobile, and Advertising & Promotions expenses.
19. Occupancy -
Includes total rent, utilities, building maintenance, property taxes, janitorial and other building
related expenses. Any rental/sublet income is netted against this expense item. Excludes depreciation
expenses.
2004 BEST PRACTICES STUDY - APPENDIX
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