Insurance Journal Forums

Hello everyone.

Just curious, what is the biggest broker fee you've ever charged? Just recently I saved A client $50,000 on his Worker's Comp alone. I plan on adding an honest fee, with his approval of course.

Are you receiving commission on that W/C policy? If so, you'll need to disclose that in your fee agreement.

Thats a given..

As long as the fee is measurable with the work being done it should be good. If you are say charging a $10,000 fee in this case you should be able to demonstrate your work was worth $10,000. Of course it can be a subjective call.

States vary as to whether or not you can collect a fee and commission on the same transaction. You may be able charge a fee for services that are NOT related to insurance placement and servicing. I think all states require that you have a written fee agreement that spells out your services and the amount of your fee. Also, some states require a license besides a producer/agent license before a fee-for-service can be charged. I think in Cali you have to have a broker license in addition to an agent license. Check with your DOI

I've had to think about this posting for awhile because it just doesn't feel right by my value system.

As agents or brokers, I've always viewed the job as being one where appropriate coverage is researched and offered to fit the risk, and that final commission/compensation would take care of itself if I was doing a good job.

There have been times when I've remarketed a risk and found a better rate for a client and offered it up as such. I'd be lying if I said under those circumstances I don't give any thought to commission being less with lower premium, but it's just a passing thought. But somehow the thought of being either lucky or skillful enough to find a rate that is substantially less, with the resulting commission cut, and then trying to make it up with an ancillary fee seems smarmy to the way I practice my craft. A small fee? Maybe. But to come here and brag about the size of the fee instead of celebrating the business practice of just doing a great job for a client doesn't sit right with me.

Commission is certainly important, as it keeps the lights on and pays the mortgage and gas. And, I've passed on potential or existing accounts when the revenue isn't very much compared to the work involved and there's not much possibility of extra sales and extra revenue (when I'm the 'accommodation' agent), but gloating over a planned large fee just to make up commission just isn't my style.

If it's your style, then enjoy the extra revenue. Far be it for me to tell you how to run your business.

Who's bragging? I'm just asking as simple question.. I feel like I'm dealing with underwriters here loosen up fellow!

CA Ins Brokers / Access Avenue Insurance or whoever,

Just trying to help but misspellings bother me. the WEATHER should be Whether. It is on your website. Just helping.

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Thanks for the heads up mate! I had the correction sent in to our developer

Hey Guys,

From a compliance person/product development, as to CA you need to have a broker license and a fee agreement stating specific services offered and agreed to. Commission is set based on the underwriting plan approved for use in the state and subsequent contracts with the various service providers. It is generally not legal to just make a charge for doing a job that already has a fee related to it. In some cases, the subsequent commission structures are illegal as well, such as contingencies based on volume.

Guideline - if the client was not aware of the charge going in then it is likely not legal.

Wow: In CA if you are acting as an agent you cannot charge a broker fee. If you are acting as a broker you may charge a fee in addition to any other compensation. The CA Dept. Of Insurance requires full disclosure of the fee if a fee is charged for a personal lines product. They have a sample broker fee agreement. So far, it is not a requirement for a broker fee agreement for a commercial lines product. However, it is highly recommended by agent associations to have a written broker fee agreement. I always use a written broker fee agreement for all such transactions. Making your clients aware of all compensation arrangements is a good method of acting in ethical manner.