- 14,809
DATE: JULY 31, 2012
FROM: ARKANSAS INSURANCE DEPARTMENT
SUBJECT: HEALTH INSURANCE PRODUCER COMPENSATION FEES
________________________________________________________________________
The purpose of this Bulletin is to provide an interpretation of Ark. Code Ann. § 23-66-310(a) and Ark. Code Ann. § 23-66-310(b) (1) to remind producers of optional methods that allow more flexible fee arrangements for insurance producers selling or servicing health insurance in this State.
The Arkansas Insurance Department (“Department”) has been made aware that some health insurance carriers, as a result of recent health insurance law changes at the Federal Level,
may reduce or eliminate commissions for insurance producers from the premium charged to group health insurance customers, primarily in the large group market.
The following regarding “fees” or “charges” shall apply to producers acting under a consultant’s license in accident and health insurance for small and large group health insurance.
Currently, under Ark. Code Ann. § 23-66-310, a producer is prohibited from collecting any “charge for insurance” in excess of the premium charge, classification and rates, filed and
approved at the Department. The collection or receipt by an “insurance producer” of a compensation fee shall not be deemed to be an excess charge for insurance under Ark. Code
Ann. § 23-66-310 but shall be deemed to be a fee charged for consultation of insurance services under Ark. Code Ann. § 23-66-310(b)(2)(E). Therefore, producers desiring to obtain fees
pursuant to the interpretation in this Bulletin shall need to obtain a consultant’s license under Ark. Code § 23-64-204.
The total of such fees when added to commissions received, if any, that exceeds twenty percent (20%) of the premium charged to the employer shall not be presumed reasonable.
FROM: ARKANSAS INSURANCE DEPARTMENT
SUBJECT: HEALTH INSURANCE PRODUCER COMPENSATION FEES
________________________________________________________________________
The purpose of this Bulletin is to provide an interpretation of Ark. Code Ann. § 23-66-310(a) and Ark. Code Ann. § 23-66-310(b) (1) to remind producers of optional methods that allow more flexible fee arrangements for insurance producers selling or servicing health insurance in this State.
The Arkansas Insurance Department (“Department”) has been made aware that some health insurance carriers, as a result of recent health insurance law changes at the Federal Level,
may reduce or eliminate commissions for insurance producers from the premium charged to group health insurance customers, primarily in the large group market.
The following regarding “fees” or “charges” shall apply to producers acting under a consultant’s license in accident and health insurance for small and large group health insurance.
Currently, under Ark. Code Ann. § 23-66-310, a producer is prohibited from collecting any “charge for insurance” in excess of the premium charge, classification and rates, filed and
approved at the Department. The collection or receipt by an “insurance producer” of a compensation fee shall not be deemed to be an excess charge for insurance under Ark. Code
Ann. § 23-66-310 but shall be deemed to be a fee charged for consultation of insurance services under Ark. Code Ann. § 23-66-310(b)(2)(E). Therefore, producers desiring to obtain fees
pursuant to the interpretation in this Bulletin shall need to obtain a consultant’s license under Ark. Code § 23-64-204.
The total of such fees when added to commissions received, if any, that exceeds twenty percent (20%) of the premium charged to the employer shall not be presumed reasonable.
