Underwriting & Commissions (SF.IS.UnderwritingAndCommissions)
Underwriting & Commissions (SF.IS.UnderwritingAndCommissions) refers to the commissions received for underwriting insurance policies from policyholders or other insurance companies. Under the process, a guaranteed cash payment is made in the event of a loss or casualty. Commissions are service charges assessed by an agent in return for arranging the purchase of insurance.
Subscription of new policies is generally done by insurance brokers, who compare policies from multiple insurance companies before any subscription and are paid with commissions from an insurance company whose policy is subscribed. Commissions from a policy may be paid at the time of subscription, but such commissions may be realized at end of the contractual time period.
Unexpired portions of policy acquisition costs may be capitalized and amortized over the time as the underlying policy contracts are recognized as revenue. The amortized portion is included in Amortization of Policy Acquisition Costs (SF.IS.AmortizationofPolicyAcquisitionCosts).
Underwriting & Commissions (SF.IS.UnderwritingAndCommissions) does not include:
- The amortized portion of policy acquisition costs (classified as Amortization of Policy Acquisition Costs (SF.IS.AmortizationofPolicyAcquisitionCosts))