• Perhaps the most common criterion today to measure an agent's performance during his financing period is the net annualized premium or commission. Under this method the agent receives a validation credit for the annualized amount, regardless of premium frequency, but is debited with a portion of his annualized credit in the case of a lapse within the first policy year. The administration of these chargebacks is troublesome, but more important, an agent with poor persistency may be financed for two or three months beyond the point of nonvalidation on the strength of business on which premiums are no longer being paid.

--  John S. Acheson

1962 - SOA - Discussion of Subjects of Special Interest: Agency Compensation, Society of Actuaries - 11p