Question & AnswerQ&A (IC CIRCULAR LETTER NO. 18/92 CL)
The 'finders'/referral fee' is considered a form of commission or compensation for services in obtaining insurance.
No, it is a violation of Section 299 of the Insurance Code for insurance companies to pay such fees to any person who is not authorized by the Insurance Commission to act as an insurance agent.
Section 299 prohibits any insurance company or its agents from paying any commission or other compensation to any person for services in obtaining insurance unless such person has first procured a license from the Commissioner to act as an insurance agent or broker.
The Insurance Commissioner must authorize the person by issuing a license to act as an insurance agent or broker.
One must obtain a license from the Insurance Commissioner to act as an insurance agent for a company or as an insurance broker.
No, paying commissions to unlicensed individuals is prohibited and constitutes a violation of the Insurance Code.
To regulate and ensure that only authorized and licensed persons receive commissions or compensation for insurance services, thereby maintaining legal and professional standards in the insurance industry.
It results in a violation of Section 299 of the Insurance Code, which may subject the insurance company or agent to penalties imposed by the Commission.
To ensure that commissions and compensations are paid only to individuals who have met regulatory requirements and qualifications, thereby protecting the integrity of the insurance industry and consumers.