The new California Department of Insurance broker fee regulations will go into effect on Nov. 23. The regulations require that agents use a Standard Broker Fee Disclosure Form and Standard Broker Fee Agreement when a broker fee is charged on personal lines business. Failure to meet the new guidelines could result in license removal.
According to Don Lukenbill of the American Agents Alliance: “The spirit driving the new regs is disclosure. Make sure the client is fully aware of all fees you charge. Also be sure…that you do not have an action notice on file with the Department for the carrier with which you are placing the business. This is a red flag that says you are an agent, and cannot charge a broker fee…And lastly, be sure you have a broker bond on file with the CDI.” The Alliance has $10,000 broker bonds available
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A copy of the new regulations are available on the Alliance’s website, www.agentsalliance.com.
To help agents comply with the new regulations, Facilities and Services Corporation has added the Standard Broker Fee Disclosure Form and Agreement to the WinFSC personal lines rating software forms system. FSC Forms by Lightpaper is a Windows-based, integrated system with the ability to import information from the original quote directly into the new Broker Fee forms, eliminating the need for duplicate data entry. For more information on the WinFSC personal lines rating software, call (800) 433-2550.
Topics California Agencies Legislation
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