Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Life Health > Health Insurance > Your Practice

Regulator Pans Commission Negotiations

By Staff Writer

X
Your article was successfully shared with the contacts you provided.

The South Dakota Division of Insurance is warning agents against offering most customers a cut of their commissions or charging customers extra fees.

South Dakota prohibits use of agent commission rebates in the sale of insurance products subject to state regulation, such as health insurance policies designed for individuals or employers with fewer than 50 employees, Merle Scheiber, director of the South Dakota insurance division, writes in a bulletin addressed to the state’s insurance producers.

Scheiber also warns producers that South Dakota treats any fees charged by producers as premiums.

“For an individual insured or prospective insured, it is not permissible to act both as an agent and a consultant,” Scheiber writes. “An agent may not be both a consultant charging fees for insurance advice or service and an agent collecting a commission.”

If the commission associated with a product seems to be too low, an agent can choose between negotiating a better commission or declining to sell the product, Scheiber writes.

An agent may be able to negotiate commissions for products that are not regulated by the state, such as health plans for employers with more than 50 employees, if the insurer has authorized the agent to do so, Scheiber writes.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.