Olga Danylenko © 123RF.com

FAQ: Disclosing and Charging Broker Fees in California

The California Department of Insurance (CDI) regularly receives a high volume of customer complaints concerning excessive broker fees or the failure to disclose such fees. The CDI intensively scrutinizes the imposition and disclosure of broker fees, and thus producers doing business in California must ensure full compliance with California law. Fortunately, the rules governing the conduct of producers acting as brokers are quite clear; if you use the appropriate forms, obtain the customer’s prior consent, and practice complete transparency, you will, in all likelihood, remain in compliance with California law.

Below are the answers to several frequently asked questions that commonly arise regarding broker fees in California:

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Jakub Jirsak © 123RF.com

Arizona Legislature Fixes Insurance Agent Liability Loophole

Arizona Governor, Doug Ducey, has signed a bill that corrects a major loophole that had subjected insurance agents who write auto policies to increased professional liability exposure. House Bill 2129 was drafted in response to a 2015 Arizona Supreme Court ruling, Wilks v. Manobianco, a decision that seemed contrary to statute at the time, and generated a great deal of confusion amongst Arizona insurance agents.

The new law effectively reverses the Supreme Court’s ruling, and provides much needed clarity regarding the protections afforded to producers when they properly execute an uninsured motorist (UM) and underinsured motorist (UIM) rejection form. It goes into effect August 6, 2016. (Read More)

Le Moal Olivier  © 123RF.com

Covered California Approves New Agent Compensation Standards

Covered California, the state’s Patient Protection and Affordable Care Act (PPACA) public exchange program, will now include greater detail with respect to payments made to insurance agents. The board of Covered California has voted to approve a new health plan contract that includes agent compensation standards. The contract will apply to health insurers and managed care companies that intend to sell qualified health plan (QHP) coverage through Covered California in 2017, 2018 and 2019. (Read More)

Keith Bell © 123RF.com

How to Strengthen Your Agreements with Retail Producers

Do you have written agreements with your retail producers? Do your retail agreements address the key areas of potential exposure? It is highly recommended that Wholesale Insurance Brokers enter into formal written agreements with retail producers that identify key points in the relationship, including respective duties and obligations. It is alarmingly common for a Wholesaler to not have a formal written agreement in place with retail producers, which exposes the wholesaler to a range of liability. This article will identify the critical provisions that should be considered in an agreement with a retail producer. (Read More)

Bruce Rolff © 123RF.com

How is Big Data Impacting the Insurance Industry?

Overall, Big Data is slowly transforming the way insurance companies do business. Insurers use Big Data through analytic technologies and predictive modeling to improve overall performance, obtain more accurate pricing, deepen customer relationships, and improve loss prevention mechanisms.  (Read more)

Timur Arbaev © 123RF.com

Alert: California Legislature Proposes AB 933 to Change DMV MVR Requirements

On February 26, 2015, the California Legislature introduced Assembly Bill AB 933, which would require the California Department of Motor Vehicles (DMV) to permit insurance broker-agents to submit motor vehicle records (MVRs) to insurance companies. Under AB 933, the DMV would not be allowed to prohibit “an insurance agent or broker from obtaining and distributing to an insurance company or to any policyholder of either a private passenger automobile liability policy or a commercial automobile liability policy any record or information that is open to public inspection.” (Read more)

Mark Robinson Discusses the Issue of Insurance Company Liability to Third Parties

Mark Robinson presented “A Wholesaler’s Duty of Care to the Insured: Am I Liable?” as part of a panel at the California Insurance Wholesalers Association’s 2015 California Wholesaler Industry Days conference on January 13, 2015 in La Jolla, CA. The presentation addressed the circumstances under which a wholesaler could be found liable to the insured, given that wholesalers generally only work directly with the retail broker. (Read more)

Mark Robinson Discusses Compliance Guidelines at the 2014 American Agents Alliance Convention & Expo

As part of the presentation, “From the Legal Experts: A Panel Discussion with Michelman & Robinson, LLP” on September 27, 2014 at the 2014 American Agents Alliance Convention & Expo, Mark Robinson discussed compliance guidelines. He provided a 2014 update on new insurance laws and regulations, broker fee and disclosure requirements and common areas of Department of Insurance enforcement. In this segment, he explains how a new law involving third party notices of a lapse in insurance premium payments will work.

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Disclosing Broker Fees to Ensure Full Compliance

An area of intensive scrutiny by the California Department of Insurance surrounds the charging and disclosing of broker fees. The department regularly receives a high volume of customer complaints concerning the failure to disclose broker fees or excessive broker fees. View Full Article