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Referral Fees |
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| In the 2001 Florida Legislative Session Senate Bill 2174 added the
following language to Florida statutes: 626.112 (8) No insurance agent, insurance agency, or other person licensed under the Insurance Code may pay any fee or other consideration to an unlicensed person other than an insurance agency for the referral of prospective purchasers to an insurance agent which is in any way dependent upon whether the referral results in the purchase of an insurance product. The result of this new language is an insurance agent or agency can legally pay a referral fee to an unlicensed person under certain situations. In order to comply with the statute, if an agent or agency desires to pay a referral, it must be paid in a manner such that payment is not contingent upon someone ultimately purchasing an insurance product. Examples will serve to illustrate methods that comply with the statute, and methods that do not comply. Example #1. ABC Insurance Agency pays Quality Cars $1,000 a year to place desktop holders on the desks of the auto salespersons. Agency brochures are in the desktop holders, available for customers of Quality Cars to read and then, hopefully, contact ABC Agency for coverage at a later date. Example #2. Chris Agent goes to visit Pat Salesperson at Quality Cars and gives Pat 100 business cards, marked to identify them as coming from Pat. Chris tells Pat, "Every time someone gives me my business card and tells me they got it from you, I'll pay you $5.00. I'll pay you for every card, whether the customer buys from me or not." Example #3. Chris Agent goes to visit Pat Salesperson at Quality Cars and gives Pat 100 business cards, marked to identify them as coming from Pat. Chris tells Pat, "Every time someone gives me my business card and tells me they got it from you, I'll pay you $5.00. But if I sell a policy to that person I'll pay you $10.00." Example #4. Chris Agent goes to visit Pat Salesperson at Quality Cars and gives Pat 100 business cards, marked to identify them as coming from Pat. Chris tells Pat, "Every time someone gives me my business card and tells me they got it from you, I'll pay you $5.00 if I sell them a policy, but if I don't sell a policy, I won't pay you anything." Only example #1 and example #2 comply with the statute since the referral fee was paid to someone without regard to writing a policy and without the fee being dependent upon, or in any way tied to, the purchase of an insurance product. In order to pay a "referral fee" (or any other consideration) that is contingent upon the purchase of insurance, the person/entity receiving the "fee" must be a licensed and appointed insurance agent or an insurance agency. On a separate but related subject, the person receiving the fee must be careful not to violate Florida statutes 624.10, 624.11, and 626.112. These all deal with the requirement that those who solicit insurance must be properly licensed and appointed. |
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