Okla. Admin. Code § 365:10-5-73

Current through Vol. 42, No. 7, December 16, 2024

Section 365:10-5-73 - Agent or representative compensation

(a)Purpose. The purpose of this section is to establish the maximum compensation allowance which may be paid in connection with credit life and credit accident and health insurance.

(b) The following allowances are the maximum compensation which may be paid for the sale of credit insurance in this State:

(1) in the aggregate, to all persons including insurance agents or limited insurance representatives directly or indirectly connected with the creditor, forty percent (40%) of the net written life insurance premiums;

(2) in the aggregate, to all persons, including insurance agents or limited insurance representatives, directly or indirectly connected with the creditor, forty percent (40%) of the net written accident and health insurance premiums;

(3) in the aggregate, to all persons independent of the creditor, including but not limited to general agents, an amount not to exceed the lesser of:

(A) ten percent (10%) of the net written credit life and credit accident and health insurance premium, or

(B) the general expense component used in the calculation of the maximum rate chargeable for credit life multiplied by the net written credit life and credit accident and health insurance premium; and

(4) "Compensation" shall include, but not be limited to, the receipt directly or indirectly or reciprocally of commissions, contingent commissions, service fees, policy fees, expense allowances or reimbursements, gifts, all benefits such as items of merchandise, equipment, travel, conventions, vacations, rewards, bonuses, trading stamps, scripts, or any other form of remuneration resulting directly or indirectly from the sale of credit insurance or as an inducement to or payment for sales made or volume of sales obtained. Compensation shall also include any amounts or things of value received from or paid by any person other than an insurer in consideration of the sale or retention of credit insurance.

(5) Dividends or other distributions of earnings based upon the profits derived from the sale of credit life or credit accident and health insurance shall be considered compensation if:

(A) such dividends or other distribution of earnings are realized as the result of direct writing with an insurance company or direct or indirect reinsurance cessions to reinsurance companies, and

(B) such insurance or reinsurance companies are controlled or owned wholly or in part by the creditor receiving such dividends on earnings, and

(C) the amounts credited to the creditor/shareholder or ceded to such reinsurers on behalf of the creditor/shareholder exceeds seventy-five percent (75%) of the risk under any credit life or credit accident and health insurance policy produced by said creditor for the insurance company or ceding insurance company, or

(D) such dividends or other distributions of earnings are credited to any class of stock of an insurance company or insurance holding company on the basis of premiums written by a creditor, less loss experience and other charges applied to such premiums, if such participating stock so credited was issued after the effective date of this rule amendment."

(c) In order to assist in the enforcement of this Part, any insurer writing credit life or credit accident and health insurance in this State shall on or before March 1, 1997, and on the same date of each year thereafter, execute a notarized affidavit certified to by one of the insurer's officers stating whether or not said insurer or its agents had paid compensation in excess of the maximum compensation as herein described and set forth. Said notarized affidavits shall be maintained at the offices of the insurer and shall be provided to the Commissioner immediately upon request of the Commissioner or his representatives.

(d) In order to assist in the enforcement of this Part, any agent, limited insurance representative or other person writing credit life or credit accident and health insurance in this State shall on or before March 1, 1997, and on the same date of each year thereafter, execute a notarized affidavit stating whether or not said agent, limited insurance representative or other person had paid or received compensation in excess of the maximum compensation as herein described and set forth. Said notarized affidavits shall be maintained at the offices of the agent's appointing insurer and shall be provided to the Commissioner immediately upon the request of the Commissioner or his representatives.

Okla. Admin. Code § 365:10-5-73

Amended at 10 Ok Reg 3049, eff 10-1-93; Amended at 14 Ok Reg 2650, eff 7-1-97; Amended at 14 Ok Reg 2415, eff 7-1-97 (emergency); Amended at 15 Ok Reg 1382, eff 7-1-98