Service Fees and Insurance Certificates

In speaking with Steve Manders of the Insurance Commissioner’s Office last week about insurance certificate issues, the subject of whether a fee could be charged by an agent for the issuance of such certificates came up.  Mr. Manders was of the opinion that since the issuance of insurance certificates was part of the normal servicing process for insurance policies, no separate fee for their issuance could be charged unless there was an applicable rate filing, rating plan, or rating system filed with and approved by the Commissioner that permitted the charging of such a fee.  At this time, he was not aware of any such approved filing. 

Mr. Manders was relying on the provision of the Georgia Insurance Code that prohibits charging anything more or less “for insurance” than the premium specified in the policy in question or in any rate filing, rating plan, or rating system filed with and approved by the Commissioner.  In his view, that provision prohibits the charging of anything in addition to such premium for services that are normally provided in connection with obtaining and servicing the insurance policy in question.   

Mr. Manders also informed me that a regulation regarding insurance certificates will soon be issued by the Commissioner’s Office.  In part, it will require the delivery of a copy of all issued insurance certificates to the insurance company that issued the underlying policy, so the company will know what has been issued to its insureds by its agents.  Stay tuned for further updates on this new regulation.