Volume 4, No. 2 - February 2015

In The Know

- Keeping you informed is what it's all about

Contracts Between Insurance Agents, Agencies, and Insurers

We are often asked to provide assistance to licensees that are involved in contractual disputes with agencies, insurers or others they have contracted with to perform insurance sales and other services. The Department is not a party to those contracts and has no jurisdiction related to disputes between the parties. Licensees may want to consult with legal counsel to explore their options through the civil process.

Commission Payment Disputes

Related to the topic of licensee-agency-insurer contracts are commission disputes, the most common employment related complaint brought to us by agents. Because payment (and non-payment) of commissions are generally addressed in written or verbal agreements with agencies, MGAs, insurers and others, any dispute must be resolved between the parties or through the civil process of law.

The Department does not enforce payment of commissions to any licensee by any other licensee or insurer, with one exception. Licensees are required to return commissions that were paid on premium that is later unearned. Commissions are part of premium, and failure to return unearned commissions to an agency or insurer is a form of misappropriation of premium.

How to Locate a Final Order on the Department's Website

There are two ways to locate enforcement actions from the Division of Insurance Agent & Agency Services' website:

Under "Quick Links" on the division's website, click on the "Enforcement Actions" link to view the most recent actions posted. If you need a previous order, click on "Division of Legal Services' database" on the same page under "Important Note" and you will be redirected to a search portal. In the search field for "Style" you may enter the name of the disciplined individual or entity. Please note that it may take a couple of weeks after entry of the action for the document to be available online.

Copies of previous and current enforcement action documents, which include the allegations, can be located by searching the Division of Legal Services' database. For further information, you may make a public records request via email or contact the Public Records Unit.