Question

How are persistency targets related to commission structure?

a.

Higher persistency targets result in lower commission rates

b.

Commission rates are independent of persistency targets

c.

Commission rates are higher for policies with lower persistency

d.

Persistency targets are not considered in commission agreements

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).Higher persistency targets result in lower commission rates Explanation:Commission structures may be linked to persistency targets, with higher persistency resulting in lower commission rates to incentivize agents to focus on policy retention.

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Q. How are persistency targets related to commission structure?
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