Also known as: overriding commission · override commission · overrider
An extra commission paid on top of the standard commission, usually to a managing agent or ceding insurer for producing and overseeing business.
An overriding commission, often just called an override, is an additional percentage paid over and above the base commission earned on a piece of business. In distribution, a managing general agent or wholesaler may earn an override on premium produced by the sub-producers beneath it, compensating it for building and supervising that channel. In reinsurance, a ceding commission can include an override that reimburses the ceding insurer for its acquisition and overhead costs on the business it passes along. For founders, overrides are part of the distribution economics baked into a premium rather than a line item you negotiate, but understanding them explains why layered brokerage arrangements can carry more cost than a direct one.
An overriding commission is an additional commission paid on top of the standard commission for a piece of business. A managing general agent may earn an override on premium produced through its sub-producers, and in reinsurance a ceding commission can include an override that covers the ceding insurer's acquisition and overhead costs.
The party that controls the business or the risk generally pays it. An insurer or wholesaler pays an override to a managing agent for producing and supervising a book of business, and a reinsurer pays an override to a ceding insurer as part of the ceding commission. The end insured does not pay it as a separate charge, it is built into the premium.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.