A reduction in the fee insurance companies pay to “appoint” insurance agents is expected to result in $11.3 million in reduced annual costs, Lieutenant Governor and Department of Insurance Director Mary Taylor announced.
An amended rule took effect in Ohio on June 30 that reduces the agent appointment fee 25 percent from $20 to $15. Insurers must “appoint” agents before those agents can act on their behalf to sell, solicit or negotiate insurance products. The department said it has increased operational efficiencies by updating its technology systems, thereby reducing the resources needed to effectively monitor company and agent appointments.
The department previously reduced other fees related to agent appointments. A $5 appointment termination fee was eliminated in 2013, while those who renew licenses late now pay $50 instead of $100. The license reinstatement fee was also dropped from $300 to $100.
Insurers will see direct costs savings because they mostly pay the agent appointment fee. However, agents and agencies will also benefit because the fee can be passed onto them by the insurance companies. Consumers may also benefit from the fee reduction as administrative costs such as appointment fees are built into the premiums consumers pay, the department said.
Source: Ohio Department of Insurance