Products
Producer Compensation Disclosure Notice
SPARTA Insurance Company ("SPARTA") sells its products and services through independent producers.
This Notice provides an overview of the types of compensation that SPARTA may pay its producers. SPARTA may pay producers one or more of these types of compensation.
Commission
SPARTA may pay producers a commission, which is a pre-determined percentage of the premium on each new and renewal policy that the producer places with SPARTA. This percentage may vary depending upon the type of policy sold.
The producer may receive additional commission, sometimes referred to as contingent commission, which is also a pre-determined percentage of the premium and based upon the producer satisfying pre-established performance goals for the profitability of the business underwritten, when viewed over a pre-determined period of time. This percentage may vary depending upon the line of business being underwritten as well as the achievement of the pre-established underwriting performance goals. Profitability is measured by comparing the premiums on the policies the producer places with SPARTA and the losses on those policies. This contingent commission is solely based upon underwriting result and is not payable to SPARTA producers for reasons of volume, retention, or growth.
Other Compensation, Income or Benefits
SPARTA may pay producer compensation for services the producer renders or obtains from vendors, including, but not limited to, loss control, premium audit, claims oversight, and underwriting or administrative services. This compensation is a percentage of the premium of the business that the producer places with SPARTA and may vary depending upon the type of insurance.
The producer may also derive other forms of income or benefits from doing business with SPARTA such as interest from an interest bearing trust account in which the producer places the premiums collected on SPARTA's behalf; deployment and use of information technology; and reimbursement of certain expenses, such as costs of software. SPARTA may also pay for certain expenses, such as meals.
Captive Reinsurance
In addition to the compensation that SPARTA pays its producer for the policies placed with SPARTA, certain producers may share in the underwriting results of the business through captive reinsurance in which the producer has an investment, ownership, or other financial interest.
Please consult your producer to receive information specific to the compensation received in connection with your policy.
