View this article online: https://www.insurancejournal.com/news/east/2003/12/17/35095.htm
The Professional Insurance Agents of New Jersey, Inc. has issued a bulletin noting that a reform it has long supported, to allow agents to recoup certain out-of-pocket expenses, has been accepted by the state’s Department of Banking and Insurance (DOBI).
The proposals would allow agents to recover their costs incurred in obtaining documents and other materials needed for underwriting new auto applications, such as motor vehicle and CLUE reports.
“PIANJ made a strong push for the change when the cost of motor vehicle reports increased dramatically from $4 to $10 in the summer of 2002,” said the announcement “PIANJ representatives, including PIANJ President John D’Agostino, Jr., CIC, past Presidents David J. Madara, CPCU, AAI, and Paul Monacelli, CIC, CPIA and Legislative Representative Leon Zimmerman, met with Department officials on several occasions to request that agents be allowed to recover the costs of obtaining motor vehicle reports. PIANJ explained that agents obtain these reports for the benefit of insurance consumers since they are necessary to properly determine rate and eligibility for an applicant’s insurance coverages and applicants can take the reports with them to shop for insurance.”
The DOBI’s proposal “would allow all producers, including those acting as agents for an insurance company, to charge for reimbursement of actual out-of-pocket expenses incurred obtaining documents and other materials related to the underwriting process for new automobile applications, subject to certain limitations.”
Producers would be limited to $20 per policy, however, even if the actual costs exceed this limit. The must also “retain verifiable proof of the costs incurred” and provide copies of all documents or materials obtained to the applicant, “regardless of whether the costs incurred exceed the $20 limit,” the bulletin continued. “Producers must also obtain a signed, written service fee agreement from insureds or prospective insureds. Producers may not charge fees where an applicant supplies a copy of the underwriting document that is dated within the previous 90 days.”
The PIANJ said it is “studying the proposal to provide comments to the department. The deadline for interested parties to submit comments on the proposal is Feb. 13, 2004.” It also cautioned its members that, as the initiative hasn’t yetbeen adopted the current rules on charging fees will apply until it has been.
The organization also promised to keep its members informed of progress and said it would keep them advised of the date the new rules become effective.