“Moving Target: State Law Variances Require Agents to Be Diligent With Referral Fees,” American Agent & Broker
“Referrals are a great way to acquire business. Providing a monetary incentive to get those referrals can increase the number of those referrals,” write Matthew S. Marrone and Colleen M. Murphy, Co-Chairs of Goldberg Segalla’s professional liability practice focused on insurance agents and brokers.
“However, for the unsuspecting insurance agent or broker, this can be a potential minefield given that some jurisdictions have placed restrictions on who can collect these fees and the conditions surrounding these fees. Insurance agents and brokers need to be aware of these rules to avoid facing fines or, worse, losing their licenses.”
This article examines the rules New York, Pennsylvania, and Illinois. Determine the rules in the jurisdictions in which you are licensed, especially as it pertains to referral fees to non-licensees.