Insurance intermediaries · Financial services and fintech
Insurance commission matched to every policy, cancellation and network payout
An insurance intermediary earns on the policies it places, but many insurers pay it on different statements, rates and timetables. It then passes a large share on to point-of-sales persons and partners. We reconcile commission policy by policy, track cancellations and endorsements, and pay the network on what was actually received.
In one paragraph
Insurance brokers, corporate agents and web aggregators usually earn ₹10–300 crore of commission and fees across relationships with many insurers. Their principal officers, founders and finance heads deal in volume and fragmentation. Thousands of policies each carry their own rate and adjustments. All of it sits inside an IRDAI-licensed business whose regulatory obligations rest with the intermediary itself.
Principal officer or chief executive, often with the finance head
The economics
How the money moves in this trade
Income is commission and other remuneration paid by insurers, and fees in some broking arrangements, credited on statements that follow each insurer's own format and timetable. Mid-term cancellations, endorsements and premium refunds reverse or adjust commission already received. Motor, health, life and commercial lines behave differently. The rate on a policy depends on product, insurer and sometimes volume.
Much of the income is paid onward to point-of-sales persons, sub-agents, partners and digital affiliates, each with its own withholding and GST position. If those payouts are calculated on policies issued rather than on commission received, the intermediary funds the gap. Where premium passes through the intermediary at all, it has to be held apart from the firm's own money and remitted to the insurer within the time IRDAI allows.
The problem
Where the numbers usually break down
Insurer statements booked in bulk
Commission credits are posted as received, without matching each line to a policy in the intermediary's own register.
Cancellations reversed late or not at all
Commission reversals on cancelled or endorsed policies appear months later, and nobody tracks which network payouts they should have reduced.
Network payouts ahead of receipts
Point-of-sales persons and partners are paid on policies issued, while the insurer's commission arrives later or not at all.
Rate errors go unnoticed
The commission an insurer pays is never compared with the rate agreed for that product and period.
Tax treatment varies by payee
Withholding and GST differ across individual agents, corporate partners and digital affiliates, and are applied inconsistently in bulk payouts.
What we do
The work, and the result each part produces
Policy-level commission reconciliation
Each insurer statement matched to the policy register, with unpaid, short-paid and unmatched lines listed.
Commission due is known insurer by insurer.
Cancellation and endorsement tracking
Reversals and adjustments recorded against the original policy and the payouts it generated.
Clawbacks reach the right partners.
Network payout on received commission
Payouts to point-of-sales persons and partners calculated from commission actually received, with withholding and GST applied by payee type.
The firm does not fund its network's earnings.
Rate verification
Paid rates checked against agreed rates by insurer, product and period, with variances raised with the insurer.
Rate errors are claimed, not absorbed.
Premium and client-money control
Premium passing through the firm, where any does, held in a separate account and reconciled to remittances.
Client and insurer money stays apart from the firm's own.
Line-of-business profitability
Income and cost by line, channel and insurer, after network payouts and servicing cost.
Growth is pursued in the lines that earn.
Where we start
The first steps of an engagement
Insurer statements and policy register
We ask for commission statements from each insurer, your policy register, agreed rate schedules, cancellation and endorsement reports, and network payout sheets.
Policy-level commission match
Each insurer's statement is mapped to a common format and matched to the policy register. Unpaid, short-paid and unmatched lines are listed.
Payouts tied to receipts
Network payouts move to a basis of commission actually received, and reversals on cancelled policies are linked to the payouts they should reduce.
Commission due by insurer
The first report shows commission received against commission due by insurer, unmatched policies by age, and network payouts against receipts.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Commission received against commission due, by insurer
- Unmatched and short-paid policies, by age
- Cancellations reversed against payouts recovered
- Network payouts against commission received
- Withholding and GST applied, by payee type
- Contribution by line of business and channel
Who it suits
Written for, and not the right fit for
- You need an IRDAI licence obtained, renewed or represented; that stays with your firm and its own advisers.
- You need the intermediary's statutory audit or a prescribed certificate for IRDAI signed; an independently engaged CA does that.
- Insurance brokers placing business with many insurers across lines.
- Corporate agents and web aggregators with large policy volumes and partner networks.
- Intermediaries preparing for an IRDAI inspection or a statutory audit who need their records in order.
Services
Services this work draws on
Outsourced accounting
Your books kept current and reconciled, closed to a published calendar.
Explore service ↗Finance technology and automation
Systems configured around your process, not the other way round.
Explore service ↗GST, TDS and tax compliance
GST, TDS and income-tax prepared from reconciled data, not a working file.
Explore service ↗Internal controls and risk
Controls sized to your business, documented and actually tested.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
Each insurer sends statements in a different format. Can the matching be automated?
Largely, yes. Each insurer's format is mapped once to a common structure, and the match against your policy register then runs on every statement. The exceptions are what need human attention.
Do you handle our IRDAI returns?
No. Regulatory returns and filings are your firm's responsibility and are submitted by your principal officer. We prepare the accounting data and reconciliations behind them, so they agree with your books.
How should we treat commission on cancelled policies already paid to partners?
Record the reversal against the original policy and recover it from the partner's next payout, under terms set in the partner agreement. Without that link, clawbacks are simply written off.
5th Quadrant is not an insurance intermediary or an IRDAI-regulated entity. Licences, regulatory returns and compliance obligations with IRDAI remain the intermediary's own responsibility; 5th Quadrant prepares accounting data, reconciliations and supporting records only. Statutory audits and any prescribed certification are signed by an independently engaged licensed professional. Full detail is on our Professional Scope page.
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