The Hartford sells its Group Benefits products through licensed and appointed insurance producers. The Hartford compensates both internal (employee) and external (non-employee) producers for the sale and service of its products. An external producer may receive one or more of the below payments, depending on the producer's business relationship with us.
Base Commission
Producers are generally paid a base commission for the sale and service of new and renewal policies placed with us. The base commission can be a fixed percentage of the policy premium; a graded commission where the commission percentage decreases as total premium increases; or a heaped commission where the commission percentage decreases after the first year. The percentage and timing may vary depending on certain factors such as the type of product, risk classification, producer size, state where the risk is located or services provided to the policyholder.
Fixed base commissions, which reflect services provided by the producer to the policyholder, are set based on information provided by the producer and subject to agreement by The Hartford, as set forth in more detail in Schedule C, Schedule E y Schedule F of The Hartford’s Group Insurance Producer Agreement (“GIPA”).
Other Payments, Benefits and Compensation
Certain producers may receive other payments, benefits, and compensation from us, which may also depend on the producer meeting production and other performance objectives established by us.
For employer groups, other payments, benefits, and compensation are generally incurred as general operating expenses of The Hartford and are generally not directly charged to any policy; rather, such expenses may be reflected in the rates as general expenses. Except with respect to certain Group Benefits association and affinity markets policies, commissions and certain other payments, benefits, and compensation are paid pursuant to The Hartford’s GIPA. The GIPA is updated periodically and Producers may access the current GIPA on Producer View.®
Certain other payments, benefits, and compensation include payments made pursuant to third party administrator, general agent, administrative service, platform, exchange, panel, marketing or other arrangements or agreements with The Hartford. The Hartford reports commissions and other payments, benefits, and compensation on the annual Schedule A Worksheet provided to policyholders in accordance with applicable law.
Other payments, benefits, and compensation may include:
Producer Incentive Awards
Producers that satisfy retention and new sales qualification requirements may qualify for additional compensation. This additional compensation is equal to a percentage of premium based on retention or new sales, annually, or producers may accept a fixed amount. Participation in The Hartford’s producer incentive award program is voluntary.
Third Party Administrator Services
Some producers may also receive compensation for services provided on behalf of Group Benefits in the administration of a group policy, such as claims administration, billing and premium collection.
Administrative Services
We may pay producers to provide a variety of services, including enrollment, technology, customer service, billing, policy administration, audits and data feeds.
Marketing and Other Support
We may pay for or subsidize a producer’s marketing efforts and other business goals. These payments may include, but are not limited to, items such as continuing education, lead generation services, advertising assistance, sales and business meetings, or other services that help the producer promote us and our products. Compensation for the development of marketing may also be paid to producers as an additional service fee for administrative services under a fixed base commission payment schedule.
Other Benefits
We may provide certain producers with other benefits, including, but not limited to, entertainment, tickets to sporting events, travel, gifts, branded merchandise, and attendance at corporate-sponsored programs, including accommodations, meals and gratuities.
Advances and Loans
In certain circumstances, we may advance commission or incentive payments to a producer or make a loan to a producer. These advances and loans may be made interest free or at a below-market interest rate and repayment may be offset against future earned compensation or forgiven based on achievement of production or other performance objectives established by us.
Group Benefits Association and Affinity Market Compensation
Association and affinity producers are generally paid a base commission for the sale and service of new and renewal association and affinity market policies placed with us. The base commission is a fixed percentage of the policy premium. In addition, these producers may receive profit share payments, incentive, and other payments, benefits, and compensation for various services performed on our behalf, such as marketing, enrollment, eligibility, claim, and billing services. In some instances, compensation is also paid to or retained by the group policyholder directly or indirectly for services associated with this insurance program.
Note: We may also pay compensation, including endorsement fees, royalty fees, and administrative service fees, to associations and other entities that provide services, endorse The Hartford or promote the sale of our products and services. In addition, some producers may charge their customers a fee on their own account related to services they provide to customers. Any such fee would not generally be part of the premium we charge or collect, would not be charged on our behalf, and may be in addition to compensation received from us.
For additional information regarding The Hartford’s compensation of Group Benefits producers, please contact your producer or Hartford representative.