Note 3. Fee and Agency Income

3 Months Ended

Sep. 30, 2012

Note 3. Fee and Agency Income:

Note 3. Fee and Agency Income

3.             Fee and Agency Income

The Company records fee income as corresponding policy premiums are earned.  Risk Solutions is compensated in two ways.  Risk Solutions earns fee income based on the volume of business produced for marketing, underwriting and administrative services that they provide for their carriers (“fee income–administration”), and earns profit-sharing commissions if such business exceeds certain profitability benchmarks (“fee income–profit commissions”). Profit-sharing commissions are accounted for beginning in the period in which the Company believes they are reasonably estimable, which is typically at the point that claims have developed to a level where recent claim development history (“Claim Development Patterns”) can be applied to generate reasonably reliable estimates of ultimate claim levels. Profit-sharing commissions are a function of Risk Solutions attaining certain profitability thresholds and could vary greatly from quarter to quarter.  Agency income consists of commissions, fees and lead revenue earned by our Agencies. 

Fee and Agency income consisted of the following (in thousands):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2012		2011		2012		2011
Agency income	$	2,370	$	1,573	$	6,317	$	5,327
Fee income–administration		1,451		1,269		3,912		3,776
Fee income– profit commissions		61		64		520		702
	$	3,882	$	2,906	$	10,749	$	9,805