Hi, All! I need some help with the new CA broker fee law. I read a
thread that stated brokers could no longer charge a BF if the broker is charging a commission. However, when I read the CA Code of Regulations, section 2189.3 (a)......."an insurer may pay to the broker a commission in addition to the broker fee". I assume that this is NOT the new law. Does anyone know where I can find a copy of the new law?
Also, does the change apply to Comemrcial Lines as well? I thought it was personal lines only. Thanks!
This has been a convulted subject. My understanding is if your are acting as an agent, you may not add a broker fee. If you are not appointed with the Insurance Carrier then you are acting as a broker (One criteria is you have no binding authority). If you are acting as a broker you may charge a broker fee in addition to collecting a commission. ON the CA Dept of Insurance website is a broker fee disclosure letter that the personal lines client must sign before binding of coverage. It is highly recommended that a disclosure letter also be used for commercial accounts. In the wake, of the Marsh big broker scandal in NY, the current thinking is that
we need to fully disclose full details of all of our fees and commisions to the client if we are to avoid additional departmental regulations. Broker fees may not be charged after the policy is in force.
I know that IBA West has infomation regarding this subject. I reccomend
that you join.
Thanks for the information. This is How I understood it, too.
But I do have a call into PIA for additional information. I just got caught up in a the posts here in the IJ.
