Commission (1) In insurance, a certain percentage of the premium produced, withheld as compensation by insurance agents and brokers. Also known as acquisition cost. (2) In reinsurance, the primary insurer usually pays the reinsurer its share of the gross premium it receives for the risk. The reinsurer then permits the company a concession or direct commission on such gross premium received, large enough to reimburse the company for the commission paid to its agents, plus taxes and overheads. The size of such a reserve often determines the profit or loss of the reinsurer.