Commission and Fees in DE

rgleyzer

Expert
30
Is this allowed on commercial P&C policies? Could someone please point me in the right direction or does someone know?



Thanks
 
This isn't from a book so maybe you'll want to keep looking for a straight answer but as far as I am aware you can put as large a fee as you want on your quote, as long as you disclose it (i.e. a line item on the pricing summary that says 'Agency Mgt Fee' or similarly labeled).

So if your quote is for $50k and your premium summary says

Total Est Premium - $50,000
Agency Mgt Fee - $5,000
Total Cost - $55,000

...you are in good shape. If it says -

Total Est Premium - $55,000
Total Cost - $55,000

...probably illegal or at least very disingenuous.

That being said it is also good to have some reasoning to justify the fee when explaining it to the insured...hope this helps! Rob
 
In case anyone is every looking back at this post, I did sort of get the answer directly from the Insurance Dept of DE - look at the Insurance Regulations. Under Chapter 17 (1714 to be exact), it talks about commissions and fees. It really doesn't limit what fees you charge.

I'm reading that as fees and commission are perfectly OK. I would certainly disclose to client to be on the safe side.
 
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