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.