Arizona broker fees

[goinsurance]

Where can I find information on a retail agent charging a broker fee on commercial non admitted policies? Is there a disclosure for to sign? Is there a fixed number?

[INTLXS]

As a general rule unless there is specific regulation prohibiting or limiting fees on surplus lines there is "freedom of rate and form" and this would include the charging of fees. The only states that regulate the charging of fees on surplus lines are FL, NJ and MI.

[AZagent]

Whoops --- not correct information -- In Arizona a fee for surplus lines business can be charged only by a surplus lines broker and a tax (and stamping fee) must be collected as well by the surplus lines broker. ARS 20-410 C. If you are the retail agent and not the one filing the taxes on the risk, you could check with the surplus lines broker to see if they will allow the fee (since they will need to make the filing for the taxes). Here is the link: http://www.azleg.state.az.us/FormatDocu ... ocType=ARS

[INTLXS]

You are making the assumption of a couple of things:

1. That the retail agent is not the one with a surplus lines license
2. That I was not saying that the fee was taxable (which it is)
3. That the fee by the retailer was not for other services such as risk management.

A more specific question would have received a more specific answer.

I was only referencing the states with fee amount limitations.

[AZagent]

If the Wholesale Broker / MGA is making the filing (regardless of the retail agent having a SL license), then my information was correct. If the retail agent has the SL license AND is making the filing, then it is just a matter of following the statute.

[INTLXS]

Yes. Your information is correct but you are making a lot of assumptions about my statement.

[AGENT]

20-373. Commissions and fees
Nothing in this article shall abridge or restrict the freedom of contract of insurers, agents or brokers with reference to the amount of commissions or fees to be paid to agents or brokers by insurers, and such payments are expressly authorized.

With a few exceptions addressed elsewhere under Title 20, there appears to be an open question as to whether fees may be charged by the agent, that are not directly paid by the Insurer, and under what circumstances the agent may charge such a fee.