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Specialty Benefits new business bonus calculation examples: The Specialty Benefits new business bonus
is calculated by totaling the eligible lines of coverage and the annualized premium and fees for those eligible
lines of coverage to determine the bonus tier from the Specialty Benefits new business bonus payment table.
The Specialty Benefits net change factor is then calculated and applied to determine the Specialty Benefits new
business bonus that is payable.
Example 1: An agency has 21 new Specialty Benefits lines of coverage with effective dates from January 1, 2017
through January 1, 2018, with annualized premium and fees in new eligible lines of coverage of $300,000. In
their entire block of Specialty Benefits business, the agency had $1,000,000 in annualized Specialty Benefits
premium in December 2016, and $1,200,000 in annualized Specialty Benefits premium in January 2018.
Step 1. Determine Specialty Benefits new business bonus qualification level: 21 new eligible lines of coverage
with annualized premium and fees of $300,000 qualifies for an initial bonus of 3% of the annualized premium
and fees for the new eligible lines of coverage.
Step 2. Calculate Specialty Benefits net change percentage: $1,200,000 in annualized specialty benefits
premium in January 2018 divided by $1,000,000 in December 2016 equals a Specialty Benefits net change
percentage of 120.0%, resulting in a Specialty Benefits net change factor of 1.0.
Step 3. Calculate the Specialty Benefits new business bonus: The bonus payable is 3% of $300,000 times the
net change factor of 1.0. This equals a bonus of $9,000.
Example 2: An agency has 10 new lines of coverage with effective dates from January 1, 2017 through
January 1, 2018, with annualized premium and fees in eligible products of $800,000. In their entire block of
Specialty Benefits business, the agency had $1,000,000 in received premium in December 2016, and $950,000
in received Specialty Benefits premium in January 2018.
Step 1. Determine Specialty Benefits new business bonus qualification level: 10 new lines of coverage with
annualized premium and fees of $800,000 qualifies for an initial bonus of 4% of the annualized premium
and fees for the new eligible lines of coverage.
Step 2. Calculate Specialty Benefits net change percentage: $950,000 in received premium in January 2018
divided by $1,000,000 in December 2016 equals a Specialty Benefits net change percentage of 95.0%, resulting
in a Specialty Benefits net change factor of 0.8.
Step 3. Calculate the Specialty Benefits new business bonus: The bonus payable is 4% of $800,000 times
the net change factor of 0.8. The bonus paid is $32,000 times 0.8, or $25,600.
Example 3: An agency has 21 new lines of coverage with effective dates from January 1, 2017 through
January 1, 2018, with annualized premium and fees in new eligible products of $300,000. In their entire block of
Specialty Benefits business, the agency had $1,000,000 in received premium in December 2016, and $780,000
in received specialty benefits premium in January 2018. The agent’s Specialty Benefits net change percentage is
78.0%. The agent has not met the minimum Specialty Benefits net change percentage of 90.0%, and no bonus
is payable.
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is calculated by totaling the eligible lines of coverage and the annualized premium and fees for those eligible
lines of coverage to determine the bonus tier from the Specialty Benefits new business bonus payment table.
The Specialty Benefits net change factor is then calculated and applied to determine the Specialty Benefits new
business bonus that is payable.
Example 1: An agency has 21 new Specialty Benefits lines of coverage with effective dates from January 1, 2017
through January 1, 2018, with annualized premium and fees in new eligible lines of coverage of $300,000. In
their entire block of Specialty Benefits business, the agency had $1,000,000 in annualized Specialty Benefits
premium in December 2016, and $1,200,000 in annualized Specialty Benefits premium in January 2018.
Step 1. Determine Specialty Benefits new business bonus qualification level: 21 new eligible lines of coverage
with annualized premium and fees of $300,000 qualifies for an initial bonus of 3% of the annualized premium
and fees for the new eligible lines of coverage.
Step 2. Calculate Specialty Benefits net change percentage: $1,200,000 in annualized specialty benefits
premium in January 2018 divided by $1,000,000 in December 2016 equals a Specialty Benefits net change
percentage of 120.0%, resulting in a Specialty Benefits net change factor of 1.0.
Step 3. Calculate the Specialty Benefits new business bonus: The bonus payable is 3% of $300,000 times the
net change factor of 1.0. This equals a bonus of $9,000.
Example 2: An agency has 10 new lines of coverage with effective dates from January 1, 2017 through
January 1, 2018, with annualized premium and fees in eligible products of $800,000. In their entire block of
Specialty Benefits business, the agency had $1,000,000 in received premium in December 2016, and $950,000
in received Specialty Benefits premium in January 2018.
Step 1. Determine Specialty Benefits new business bonus qualification level: 10 new lines of coverage with
annualized premium and fees of $800,000 qualifies for an initial bonus of 4% of the annualized premium
and fees for the new eligible lines of coverage.
Step 2. Calculate Specialty Benefits net change percentage: $950,000 in received premium in January 2018
divided by $1,000,000 in December 2016 equals a Specialty Benefits net change percentage of 95.0%, resulting
in a Specialty Benefits net change factor of 0.8.
Step 3. Calculate the Specialty Benefits new business bonus: The bonus payable is 4% of $800,000 times
the net change factor of 0.8. The bonus paid is $32,000 times 0.8, or $25,600.
Example 3: An agency has 21 new lines of coverage with effective dates from January 1, 2017 through
January 1, 2018, with annualized premium and fees in new eligible products of $300,000. In their entire block of
Specialty Benefits business, the agency had $1,000,000 in received premium in December 2016, and $780,000
in received specialty benefits premium in January 2018. The agent’s Specialty Benefits net change percentage is
78.0%. The agent has not met the minimum Specialty Benefits net change percentage of 90.0%, and no bonus
is payable.
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