Insurance producers who assist group health insurance customers with coverage in Arkansas may collect a compensation fee from clients to make up for reduced commissions from health insurance companies, state regulators say.
Producers who do wish to charge to charge compensation fees must obtain a consultant’s license, according to the Arkansas Insurance Department.
Such a fee plus any commission received from the insurer may not exceed 20 percent of the premium charged to an employer.
A compensation fee will not be considered an excess charge for insurance but “shall be deemed to be a fee charged for consultation of insurance services,” the department said in a recent bulletin (06-2012).
Insurers may charge and collect such fees on behalf of insureds and consultants as long as a written agreement is in place. The insured’s policy may not be terminated “solely because the compensation fee has not been timely paid,” the department noted.
Source: Arkansas Insurance Department
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