Frenkel secures and otherwise facilitates the purchase of insurance coverage for its policyholder clients from a variety of insurance carriers, group benefits providers and insurance markets (collectively “Carriers”) and sometimes engages the services of other entities, including wholesale brokers and premium finance companies (“Entities”), in connection with the issuance of such policies. Frenkel may receive compensation for such placements from various sources depending on the circumstances surrounding the transaction.
Forms of Compensation
Commissions. In most instances, Frenkel is primarily compensated for the insurance brokerage services that it provides to its policyholder clients through commission payments that are based on the premium charged and collected by the Carriers, and paid for by the Carriers for each insurance policy secured for Frenkel’s clients. This commission is built into the premium set by the Carrier. The percentage of these commissions varies by insurance policy type and insurance market. These commission payments account for the largest percentage of Frenkel’s revenue.
Additional Compensation. Frenkel also may receive additional compensation from certain Carriers and Entities with whom it places business. Such additional compensation is sometimes referred to as contingent and/or supplemental commissions and may be based on a variety of factors, including without limitation, the overall volume of premiums paid to or policies sold by or through a particular Carrier or Entity for Frenkel’s clients for a certain period; the overall growth, persistency and/or retention of the premiums paid by Frenkel’s clients to or through a particular Carrier or Entity for a certain period; and, in certain cases, the profitability of the total premium paid for insurance policies sold to Frenkel’s clients for a certain period (i.e., aggregate loss history on all of the insurance policies sold to Frenkel’s clients) by a particular Carrier for a certain period.
Fees. In some cases, Frenkel sometimes receives specific fees from its clients in lieu of commissions from the insurers for placement of coverage and/or for other services or projects. If a client decides to pay Frenkel a fee directly for such services or projects, such fee-based agreements are reached prior to providing those services or projects for that client.
Protecting Our Clients’ Interests
We ensure that our clients’ interests are protected in a variety of ways. Among other things:
- Frenkel’s management team does not disclose to its employees the terms of Frenkel’s additional compensation arrangements with any Carrier or other Entities or the status of achieving any benchmarks set forth in those additional compensation arrangements.
- Frenkel’s employees do not receive any monetary award or other incentive to place business with certain Carriers or Entities over another, including any potential receipt by Frenkel of additional compensation from any Carrier or other Entity.
- Frenkel is committed to providing quality service and undivided loyalty to its clients. In that regard, Frenkel will provide to its clients additional details about the forms of any and all compensation earned for the facilitation of the purchase of their respective insurance policies.
Frenkel maintains a list of the Carriers and Entities from whom Frenkel received compensation in addition to commissions; please contact us for details. Moreover, documentation currently in Frenkel’s possession evidencing Frenkel’s current compensation agreements with those Carriers and Entities is available for our clients’ review at Frenkel’s headquarters. If you are a Frenkel client and you have any questions or would like additional information concerning Frenkel’s compensation arrangements for any of its insurance brokerage services, please do not hesitate to contact Frenkel’s legal department at 212-488-0231.