Billing as a Service is a familiar idea in insurance. You hand the billing cycle to a provider, and they issue invoices, run installment plans, and calculate the taxes and fees on every policy. It takes a lot of work off an MGA’s plate.
Most of those services stop at the same place: commission. Premium goes out on an invoice and comes back as cash, and then someone still has to work out who gets paid what. Sometimes that’s a module bolted onto an old billing system that nobody dares reconfigure; sometimes it’s an export, a spreadsheet and a week of re-keying. Either way it happens at the end of the month, after everything else is closed.
Where billing services stop
Commission is the part of billing that many providers won’t touch. It is deceptively complex: payout schedules, bonuses, top-ups, splits between producers, overrides paid up a hierarchy, chargebacks when a policy cancels, and syndicated policies where carriers take their share before commission is split from the rest.
Where a provider does handle commission, it is often buried under so many layers of abstraction that the people being paid can’t tell what they’ve earned without tracking it themselves. If your producers keep their own records to check their statements, or every payout run ends in a round of disputes, your commission process has a trust problem, not just a math problem.
What CBaaS means
Commission Billing as a Service, or CBaaS, is billing with commission at its center. It still covers the whole billing lifecycle: premium, installments, surplus lines tax, stamping fees, policy fees and inspection fees. The difference is that commission isn’t the last step. It is calculated in the same run, by the same engine, from the same policy transactions.
At BexarWare we built this by breaking our commission engine out into its own layer. Rules attach at hinge points (bind, endorsement, payment received, cancellation, renewal, period close) so one engine can serve very different agreements without custom code for each one. Every result posts to a ledger, both sides, so each statement traces back to the transaction that created it.
Seven questions to ask any provider
- Can a payee see every policy behind their total? And every rule applied to each one?
- Is commission posted to a ledger, or calculated in a report? A report can be rerun and come out different. A ledger can’t.
- Which arrangements are supported without custom work? Splits, tiers, overrides, bonuses, chargebacks and syndicates, on the same book.
- What happens to commission when a policy cancels mid-term? It should reverse pro rata, automatically, for every payee.
- Can you reproduce a statement from any closed period, exactly?
- Does it connect to the policy system we already have? Ours does, through a REST API, or comes built into Propcot.
- Who maintains the rules when an agreement changes? If the answer is “you do”, it isn’t really a service.
For most businesses, paying commission is a cost of doing business. For us, it’s the reason we’re in business. If you want to see what that looks like on your own book, book a 15-minute call.
