By Richard Polak
When I was working at an insurance carrier, I saw how override commissions really work.
A broker placing $100 million with a carrier doesn’t get treated the same as one placing $10 million. Not better service—more money.
Volume that a broker develops for an insurance company get paid an override: 1%, 2%, sometimes 3% on top of standard commissions. It’s paid by the carrier. Funded by employer premiums. And almost never shown on client-facing documents. I sat in those meetings.
After the client presentation, the broker would come back and ask: “Can you adjust the commission? Anything extra you can do?” Meanwhile, the client had just agreed to the program—with no visibility into what was being paid behind the scenes.
That’s not a relic of the past. It’s still very much part of how the system works. So here’s the question every buyer should be asking—and putting in writing as part of an RFP or annual review: Does your firm receive any compensation—of any kind—from any carrier, PBM, or third party as a result of our account? Name every source. Name every amount.
The response will tell you everything. Firms with nothing to hide will answer clearly and completely. Firms that hedge, qualify, or try to move the conversation offline are giving you your answer—just not the one you asked for. If they won’t disclose, you already know what that means.
Have you ever asked your broker that question in writing? What happened when you did — or what stopped you from asking?
If any of this sounds familiar, I’d be glad to take a look at your situation. No pitch — just a straight conversation.
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