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ATTACHMENT
5 |
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COMPARATIVE ANALYSIS OF COMMISSION
PAYMENTS |
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TOTAL PREMIUMS |
COMMISSION RATE |
RETAINED PREMIUM |
ESTIMATED INCREASED ADMIN COSTS |
ESTIMATED INCREASED CLAIMS COSTS |
NET PREMIUM |
TOTAL NET PREMIUMS END YEAR FIVE |
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$4,225,000 |
20% |
$4,056,000 |
$1,000,000 |
$1,000,000 |
$2,056,000 |
$10,956,000 |
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$4,225,000 |
30% |
$3,844,750 |
$1,000,000 |
$1,000,000 |
$1,844,750 |
$10,744,750 |
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$4,225,000 |
40% |
$3,549,000 |
$1,000,000 |
$1,000,000 |
$1,549,000 |
$10,449,000 |
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$4,225,000 |
50% |
$3,168,750 |
$1,000,000 |
$1,000,000 |
$1,168,750 |
$10,068,750 |
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$4,225,000 |
60% |
$2,704,000 |
$1,000,000 |
$1,000,000 |
$704,000 |
$9,604,000 |
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Note: The Net Premium is only applicable to the
first year. Commissions are not paid
for the remaining four years of the average policy's life. |
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