2006 Utah Code - 31A-23a-501 — Licensee compensation.

     31A-23a-501.   Licensee compensation.
     (1) As used in this section:
     (a) "Commission compensation" includes funds paid to or credited for the benefit of a licensee from:
     (i) commission amounts deducted from insurance premiums on insurance sold by or placed through the licensee; or
     (ii) commission amounts received from an insurer or another licensee as a result of the sale or placement of insurance.
     (b) (i) "Noncommission compensation" includes all funds paid to or credited for the benefit of a licensee other than commission compensation.
     (ii) "Noncommission compensation" does not include charges for pass-through costs incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
     (c) "Pass-through costs" include:
     (i) costs for copying documents to be submitted to the insurer; and
     (ii) bank costs for processing cash or credit card payments.
     (2) A licensee may receive from an insured or from a person purchasing an insurance policy, noncommission compensation if the noncommission compensation is stated on a separate, written disclosure.
     (a) The disclosure shall:
     (i) include the signature of the insured or prospective insured acknowledging the noncommission compensation;
     (ii) clearly specify the amount or extent of the noncommission compensation; and
     (iii) be provided to the insured or prospective insured before the performance of the service.
     (b) Noncommission compensation shall be:
     (i) limited to actual or reasonable expenses incurred for services; and
     (ii) uniformly applied to all insureds or prospective insureds in a class or classes of business or for a specific service or services.
     (c) A copy of the signed disclosure must be maintained by any licensee who collects or receives the noncommission compensation or any portion thereof.
     (d) All accounting records relating to noncommission compensation shall be maintained in a manner that facilitates an audit.
     (3) (a) A licensee may receive noncommission compensation when acting as a producer for the insured in connection with the actual sale or placement of insurance if:
     (i) the producer and the insured have agreed on the producer's noncommission compensation; and
     (ii) the producer has disclosed to the insured the existence and source of any other compensation that accrues to the producer as a result of the transaction.
     (b) The disclosure shall:
     (i) include the signature of the insured or prospective insured acknowledging the noncommission compensation;
     (ii) clearly specify the amount or extent of the noncommission compensation and the existence and source of any other compensation; and
     (iii) be provided to the insured or prospective insured before the performance of the service.

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     (c) The following additional noncommission compensation is authorized:
     (i) compensation received by a producer of a compensated corporate surety who under procedures approved by a rule or order of the commissioner is paid by surety bond principal debtors for extra services;
     (ii) compensation received by an insurance producer who is also licensed as a public adjuster under Section 31A-26-203, for services performed for an insured in connection with a claim adjustment, so long as the producer does not receive or is not promised compensation for aiding in the claim adjustment prior to the occurrence of the claim;
     (iii) compensation received by a consultant as a consulting fee, provided the consultant complies with the requirements of Section 31A-23a-401; or
     (iv) other compensation arrangements approved by the commissioner after a finding that they do not violate Section 31A-23a-401 and are not harmful to the public.
     (4) This section does not alter the right of any licensee to recover from an insured the amount of any premium due for insurance effected by or through that licensee or to charge a reasonable rate of interest upon past-due accounts.
     (5) This section does not apply to bail bond producers or bail enforcement agents as defined in Section 31A-35-102.

Renumbered and Amended by Chapter 298, 2003 General Session