Prohibition on finders' fee in insurance

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IC CIRCULAR LETTER NO. 18/92 CL: Prohibition on finders' fee in insurance

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Title Supreme Court: Prohibition on finders' fee in insurance

Law: Ic Circular Letter No. 18/92 Cl

Decision Date: Aug 3, 1992

Insurance companies are prohibited from paying finders' or referral fees to individuals not licensed as insurance agents, as this constitutes a violation of the Insurance Code.

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Authorization Requirement under Section 299 of the Insurance Code

Only persons authorized by the Insurance Commission through a license may receive commissions or compensation for insurance services.
Authorized persons include licensed insurance agents or brokers.

Prohibition Against Unauthorized Payment

Insurance companies and their agents are prohibited from paying commissions or fees to unlicensed persons.
Payment of finders'/referral fees to unlicensed individuals constitutes a violation of Section 299.

Regulatory Enforcement

The Insurance Commission enforces compliance with Section 299.
Violations may subject the insurance company or agents to regulatory sanctions.

Official Guidance and Issuance

This interpretation and guidance were formally issued by the Insurance Commissioner.
The circular letter serves as an official directive to the insurance industry assuring uniform application of the law.

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