Mississippi Property & Casualty Practice Exam

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Prepare for the Mississippi Property and Casualty Exam. Use flashcards and multiple-choice questions, with hints and detailed explanations. Ace your test!

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What is the term for the commission an agent can receive for new business?

Basic commission
Renewal commission
Incentive commission
Service commission

The correct answer is: Basic commission

The term for the commission an agent can receive for new business is referred to as a basic commission. This type of commission is typically structured as a percentage of the premium for the policies that the agent successfully sells. It serves as the primary income source for agents as they build their client base and gain new accounts. In contrast, other types of commissions, such as a renewal commission, are paid to agents for continuing to manage policies that they have previously sold, rewarding them for maintaining ongoing client relationships. Incentive commissions might be bonuses or additional payments tied to performance metrics, while a service commission usually pertains to fees earned when agents provide additional services or support for existing policies. Understanding these distinctions helps clarify the various ways agents are compensated in their roles.