Section 912.40  Commissions Based on Loss Experience

Whenever a company's agency contracts provided that commissions will be determined by use of a formula which relates to loss experience, then a Mandatory Commission Reserve must be established for the earned portion contingent upon such experience.  The amount of this Mandatory Commission Reserve shall be based on adequate company experience, if available, or on some reasonable average industry experience, and shall be the sum of the amounts of commission earned but not yet paid nor credited to the agents as of the date of the company's statement, computed under the contract formulas on the experience as of such date, whether or not the contracts provide for payment to the agents at such date or at a later date and whether or not the amount of commission payable may be changed by subsequent loss experience.