A. When any insurance producer or any affiliate of the insurance producer receives any compensation from a customer for the placement of insurance or represents the customer with respect to that placement, neither that insurance producer nor the affiliate shall accept or receive any compensation from an insurer or other third party for that placement of insurance unless the insurance producer has, prior to the customer's purchase of insurance:
(1) obtained the customer's documented acknowledgment that such compensation will be received by the insurance producer or affiliate; and
(2) disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.
B. Subsection A of this section does not apply to an insurance producer who:
(1) does not receive compensation from the customer for the placement of insurance;
(2) represents an insurer that has appointed the insurance producer in connection with that placement of insurance; and
(3) discloses to the customer prior to the purchase of insurance:
(a) that the insurance producer will receive compensation from an insurer in connection with that placement; or
(b) that, in connection with that placement of insurance, the insurance producer represents the insurer and that the insurance producer may provide services to the customer for the insurer.
C. A person shall not be considered a customer for purposes of this section if the person is merely:
(1) a participant or beneficiary of an employee benefit plan; or
(2) covered by a group or blanket insurance policy or group annuity contract sold, solicited or negotiated by the insurance producer or affiliate.
D. This section does not apply to:
(1) a person licensed as an insurance producer who acts only as an intermediary between an insurer and the customer's insurance producer, for example, a managing general agent, a sales manager or wholesale broker; or
(2) a reinsurance intermediary.
E. For purposes of this section:
(1) "compensation from an insurer or other third party" means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes or any other form of valuable consideration, whether or not payable pursuant to a written agreement; and
(2) "documented acknowledgment" means the customer's written consent obtained prior to the customer's purchase of insurance. In the case of a purchase over the telephone or by electronic means for which written consent cannot reasonably be obtained, consent documented by the producer shall be acceptable.
History: Laws 2016, ch. 89, § 48.
ANNOTATIONSEffective dates. — Laws 2016, ch. 89, § 72 made Laws 2016, ch. 89, § 48 effective July 1, 2017.
Severability. — Laws 2016, ch. 89, § 71 provided that if any part or application of Laws 2016, ch. 89 is held invalid, the remainder or its application to other situations or persons shall not be affected.