How are you paid? Do you receive commission? Do you charge a fee for your services? Do you get paid by both your insurers and from your customers? The state of Oregon has some new rules for you!
Since Oregon is a state that allows both fees and commissions to be charged and paid, the Insurance Division want to make sure that you are telling your customer how exactly you earn your living! If you are receiving commission only, this will not affect you. It only requires changes of those producers who are getting paid commission by their carrier(s) AND charging their customers a fee for their services.
Only certain producers are allowed to charge fees under the current set of rules, and most require that the producer obtain a consultant’s class endorsement to their insurance license. In order to get a consultant’s license, you must have at least 5 years experience, and post Errors and Omissions Insurance coverage at a minimum of $500,000 in coverage. You might also have to pass a test unless you are currently licensed in that category of insurance, you can show the 5 years of experience, and post the E&O minimum coverage.
A producer may impose fees for “incidental services” only if written notice has been given to the prospective customer prior to initiating the application for insurance. For rewriting or reinstating insurance if the coverage was canceled by the insurer due to inaction on the part of the insured, such as non-pay, the charges can’t exceed these amounts:
- $25 for personal lines insurance
- $100 for commercial lines coverage
- $10 for taking a premium in cash
- For photographs:
- $7.50 for personal lines in connection with issuance or amending coverage
- $45 for commercial ines in connection with issuance or amending coverage
- $4 for obtaining a motor vehicle report
- $5 for preparing a duplicate insurance identification card at the request of the customer if they desire it immediately and do not want to wait for the policy to arrive with the ID cards
- $10 for each endorsement to a personal lines policy after the first six
- $5 for a duplicate SR-22 filing on behalf of a customer
- $5 per certificate of insurance (commercial) after the first 20
Click here for the state rule on the topic in normal English, and click here for the actual Oregon Administrative Rule citation in legal-ese.
I know that things are getting more and more expensive for producers and agencies. More and more of the onus is being placed on the agency to take care of those things that have become more costly over the years. Taking pictures, obtaining various reports, issuing certificates and the like have stolen time from the normal producer’s workday. Couple this with the idea that insurers are cutting back on commissions that are being paid, and many agencies are finding that they need to charge fees simply to stay viable.
Please let me know if you have any comments on this topic, and I will be happy to post the good ones. I KNOW you have thoughts on this…what are they?