Knowing when you can charge fees for compensation, what you need to disclose to your clients and what kind of records to maintain can be confusing. The questions and answers on this page will help simplify the rules.
What types of compensation am I allowed to receive?
Unless your agreement with the insurer provides otherwise, you may receive:
- Commissions from an insurer,
- Fees paid by an insured or
- A combination of both.
May I charge a fee to anyone other than an insured?
No. You may only receive a fee from an insured or, in any other instance, where the fee is specified in the policy. "Insured" includes a prospective insured. See RCW 48.17.270(2) and RCW 48.18.180 (www.apps.leg.wa.gov).
Do I need to deal directly with an insured to charge a fee?
No. You may charge a fee whether you deal directly with an insured or not. In either case, you must provide written disclosure of the fee to the insured (or prospective insured). See RCW 48.17.270(2) and (3) and WAC 284-30-750 (www.apps.leg.wa.gov).
If I charge the insured a fee and receive a commission from the insurer, may I reimburse the insured for a portion or all of the fee I charged?
You may offset or reimburse a portion or all of the fee you charge the insured with the commission. You may also charge a reduced fee for services provided they are beyond the scope of solicitation and procurement of insurance if the compensation received is reasonable in relation to the services. See RCW 48.17.270(2)(a) and RCW 48.30.157 (www.apps.leg.wa.gov).
Am I allowed to receive incentive compensation, such as contingent commissions?
Yes. An insurance producer is permitted to receive incentive compensation. See RCW 48.17.270(3)(d) (www.apps.leg.wa.gov).