What, if anything, should be stated in respect of commission in a Terms of Business Agreement between an insurer and an intermediary?

The most comprehensive approach is to include the rate of commission and the timing of when it becomes payable in a Terms of Business Agreement between an insurer and an intermediary. This detail is crucial because it establishes transparency and clarity in the financial relationship between the two parties.

By specifying the rate of commission, both the insurer and the intermediary can manage expectations and ensure there are no misunderstandings regarding compensation. Furthermore, indicating when the commission is payable can help in financial planning and cash flow management, allowing the intermediary to anticipate income and the insurer to plan for outgoing fees.

Clear communication about commission structures helps maintain a professional relationship built on trust, which is essential in the insurance industry. The inclusion of these details in the agreement also aids in compliance with regulatory requirements, ensuring that both parties operate within established guidelines and standards.

Other choices fall short of providing the necessary level of detail and transparency that is beneficial for both parties involved in the agreement.