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Underwriting Services (pg 2) In actuality, the 5 to 7 percent range is not generally derived from an intensive review of time and expenses. The fee may be calculated based on the AVERAGE premium of each insurance policy issued. A $20,000 policy is no more work than a $2,000 premium policy, however, the fee income received to reimburse the expense may be significant. So 5%, of equal to $1,000 paid, to underwrite, issue, and manage a $20,000 policy may be too much as compared to 5% of a $2,000 policy or $100.00. What fee is appropriate? To answer this, you need to delve into the specific activities performed by the underwriting team. What do they do? How much time do they spend? How many staff members are actively involved on the account? This level of inquiry begins to reveal the extent of actual underwriting that takes place. Some brokers track their time and expense (though frequently only to assure their fee income covers their costs – not to tell their clients what they actually spent).
	F. Darrell Lindsey State Approved Captive/RRG Manager U. S. State Licensed Agent/Broker
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