Highstreet Insurance & Financial Services Compensation Disclosure

In building the best insurance agency for its clients and communities, High Street Insurance Partners, Inc. and its insurance industry licensed and wholly owned subsidiaries (including those listed here, collectively, “Highstreet”) value compensation transparency.  Highstreet is compensated in a variety of ways in connection with its performance of insurance agency and brokerage services.  The most typical methods of compensation (listed roughly by how common they are for Highstreet to receive) are described below.

Standard Commissions.  Most commonly, Highstreet is paid a commission by the insurance carrier with which it places an insurance policy or product on behalf of the client.  The commission is typically calculated as a percentage of the premium paid by the client and is paid as compensation for traditional agent or broker placement services and servicing performed by Highstreet prior to and during the applicable policy period.  Individual producers of Highstreet are often paid by Highstreet a proportionate share of the commissions received by Highstreet by the applicable carrier for their roles and efforts in soliciting, placing and servicing the underlying insurance policies and products.

Contingent Commissions.  Many insurance carriers pay the insurance agents and brokers with which they maintain relationships additional commissions commonly referred to as contingent commissions.  The commissions are referred to as being “contingent,” because they are typically contingent upon certain prospective factors relating to the insurance business placed with the applicable carrier by the applicable agent or broker during a current or future period of time (often a calendar year).  These factors can include volume, profitability, retention and/or growth metrics, which are usually applied to the book of business maintained (as opposed to specific policy or product placed) by an agent or broker with the applicable carrier during the relevant time period.  Given that contingent commissions are often calculated based on the performance of a book of business (or a block of business), it is often difficult for an agent or broker to attribute any part of a received contingent commission to any particular client or policy.  Highstreet receives contingent commissions, if earned, from a significant number of insurance carriers.

Supplemental Commissions.  Similar to contingent commissions, certain insurance carriers pay the insurance agents and brokers with which they maintain relationships additional commissions commonly referred to as supplemental commissions, guaranteed supplemental commissions or GSCs.  These commissions are referred to as “supplemental” and/or “guaranteed” because, rather than being based on an agent or broker’s prospective performance (as is the case with contingent commissions), supplemental commissions are paid based on an agent or broker’s performance or commitment during or for a prior time period.  Like contingent commissions, the factors on which supplemental commissions are based can include volume, profitability, retention and/or growth metrics throughout the book of business maintained by an agent or broker with the applicable carrier.  Most typically, a carrier will, based upon the performance of an agent or broker’s book of business during a prior period, agree to pay the agent or broker an additional commission, usually as a percentage of premium applied to each placement made by the agent or broker with the carrier, during a current or future period (often a calendar year).  Highstreet receives supplemental commissions from a significant number of insurance carriers.  

Client Fees.  At times (to the extent permitted by applicable insurance industry law), often when a client or prospect requests an alternative payment arrangement with Highstreet, the client and Highstreet agree to a fee that is paid by the client in lieu of all or a portion of the standard commission that Highstreet would have otherwise received from the applicable insurance carrier.  The fee, together with the services to be performed by Highstreet, are typically described in a written agreement signed by both parties.  As with standard commissions, individual producers of Highstreet are often paid by Highstreet a proportionate share of the fees received by Highstreet by the applicable carrier for their roles and efforts in soliciting, placing and servicing the underlying insurance policies and products.

Other Compensation.  While the types of compensation described above capture the vast majority of compensation that is received by Highstreet in performing insurance agency and brokerage services, Highstreet may also receive other types of compensation, including fees for the performance of certain specific services performed on behalf of insurance carriers, fees or a percentage of interest charged under a premium finance contract on which Highstreet is identified as the insurance agent or broker, payments made by insurance carriers for the sponsorship of events or training and development, and interest (or other amounts of value) paid by financial institutions in which Highstreet holds insurance premiums pending remittance to the applicable insurance carrier.  This list is intended to be illustrative, not exhaustive.

Wholesale Agencies. Highstreet owns several insurance agencies that it identifies as wholesale agencies – that is, agencies through which other brokers access carriers and place coverage.  These agencies typically maintain a particular expertise or access to certain carriers that can make their involvement in a placement beneficial to the insured, often where the underlying risk is hard-to-place or specific to an industry.  In these cases, the wholesale agent usually works with an agent or broker that maintains a direct relationship with the client, and each of the wholesale agent and the client’s agent or broker receives a commission for its role in the transaction.  At times, a Highstreet agency or brokerage that maintains a direct relationship with an insured may access a carrier and/or place an insurance policy through a Highstreet-owned wholesale agency.

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Highstreet is committed to remaining open and honest to each of its clients and prospects concerning its compensation.  Questions concerning the specifics of compensation paid to Highstreet that is attributable to the insurance account of any client may at any time be directed to the individual employee(s) responsible for servicing such client, and Highstreet will endeavor to answer any such questions as promptly and completely as possible.