Override commission
Also called: override, overrides, upline override
An override commission is commission paid to an upline (an agency, manager or marketing organization) on business written by agents below them, on top of the writing agent's own commission.
Overrides usually come from the difference between the upline's contract level and the writing agent's. They are how hierarchies get paid for recruiting, training and supporting agents.
Because overrides depend on hierarchy and contract levels, they are easy to get wrong when agents move or contracts change.
Agencies with downlines need to see overrides by agent and carrier to know what their hierarchy actually earns.
"The agency earns an override on business written by agents in its downline."
How are agency override commissions calculated?
Usually as the difference between the upline's contract level and the writing agent's level on the same policy. Exact rules depend on the carrier and the hierarchy agreement.