The service fee should not be subject to adjustment.
Only in exceptional circumstances should broker remuneration consist of brokerage. An example of an exceptional circumstance might include:
• where there is an extremely limited market for type of cover being placed by the broker; and/or
• where it is necessary to use a broker network consisting (for example) of a retail broker and a placing broker. In this example, the placing broker would have no contractual remuneration arrangement with the alliance.
Any form of broker commission should be discouraged. It is a requirement of the Broker Services Agreement that any form of broker commission paid or due to the broker is fully disclosed to the principal, and that the broker warrants that all broker commissions (if any) are fully disclosed.