Oregon Department of Consumer and Business Services, Insurance Regulation

Rule Rule 836-071-0263
Fees Charged by Insurance Consultants or Insurance Producers


(1)

When an insurance consultant or an affiliate of an insurance consultant receives from a prospective insured any compensation authorized under the Insurance Code or rules adopted thereunder, neither the insurance consultant nor the affiliate may accept or receive any compensation from an insurer or other third party for services provided to the prospective insured in addition to the compensation paid by the prospective insured unless the insurance consultant, prior to the transaction:

(a)

Has obtained the prospective insured’s documented acknowledgment that the compensation will be received by the insurance consultant or affiliate; and

(b)

Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance consultant shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

(2)

When an insurance producer or an affiliate of an insurance producer receives any compensation otherwise authorized under the Insurance Code or OAR 836-071-0269 (Purpose and Authority) to 836-071-0277 (Service Fees Allowed on Commercial Lines; Conditions) from a prospective insured, neither the insurance producer nor the affiliate may accept or receive any compensation from an insurer or other third party for the placement of insurance in the same or related transaction unless the insurance producer, prior to the prospective insured’s purchase of insurance, has:

(a)

Obtained the prospective insured’s documented acknowledgment that the compensation will be received by the insurance producer or affiliate; and

(b)

Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

(3)

A person is not a prospective insured for the purpose of this rule if the person is merely:

(a)

A participant or beneficiary of an employee benefit plan; or

(b)

Covered by a group or blanket insurance policy or group annuity contract sold, solicited or negotiated by the insurance producer or affiliate.

(4)

This rule does not apply to:

(a)

An insurance producer with respect to a transaction to which ORS 735.455 (Authority of licensee), 744.091 (Additional conditions under which person licensed as insurer or insurance producer may charge commission or service fee) or 744.093 (Solicitation or sale of insurance policy by retail insurance producer or wholesale insurance producer) applies;

(b)

An insurance producer when the insurance producer acts only as an intermediary between an insurer and the prospective insured’s insurance producer, such as a managing general agent, a wholesale insurance producer under ORS 744.093 (Solicitation or sale of insurance policy by retail insurance producer or wholesale insurance producer), a surplus lines licensee when transacting insurance with a producing insurance producer under 735.455 (Authority of licensee) or a sales manager;

(c)

An insurance producer with respect to an incidental charge that is received from the prospective insured and is authorized under OAR 836-071-0267 (Incidental Charges for Customer Services; Personal, Commercial Lines); or

(d)

A reinsurance intermediary.

(5)

As used in this rule:

(a)

“Affiliate” means a person that controls, is controlled by or is under common control with the insurance consultant or insurance producer.

(b)

“Compensation from an insurer or other third party” means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes or any other form of valuable consideration, whether or not payable pursuant to a written agreement.

(c)

“Compensation from a prospective insured” does not include any fee or amount collected by or paid to the insurance producer that does not exceed an amount established by the Director.
Source

Last accessed
Jun. 8, 2021