§ 38a-707 — (Formerly Sec. 38-75a). Producer service fees and commissions limited. Exemption for registration under the federal Investment Advisers Act. Disclosures.

Connecticut § 38a-707

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 701a: Insurance Producers, Agents and Third-Party Administrators

Text

(a) No insurance producer shall have any right to compensation, other than commissions deductible from premiums on insurance policies or contracts, from any insured or prospective insured for or on account of the negotiation or procurement of, or other services in connection with, any contract of insurance made or negotiated in this state or for any other services on account of any such insurance policies or contracts, including, but not limited to, adjustment of claims arising therefrom, unless such right to compensation is based upon a written memorandum, signed by the party to be charged, and specifying or clearly defining the amount or extent of such compensation, provided such compensation is in compliance with regulations adopted pursuant to subsection (b) of this section. (b) The Insurance Commissioner may, by regulation, establish a reasonable schedule of maximum fees which may be charged by insurance producers or he may regulate such fees on an individual basis. (c) Nothing herein contained shall affect the right of any such producer to recover from the insured the amount of any premium or premiums for insurance effected by or through such producer. (d) The provisions of this section shall not apply to an insurance producer who is an advisory representative of a registered investment adviser registered pursuant to the Investment Advisers Act of 1940, 15 USC 80b-1, et seq., provided the insurance producer makes full disclosure in a written memorandum, signed by the party to be charged, which specifies the amount of such fee or compensation for services performed pursuant to the Investment Advisers Act of 1940 and which also discloses that a commission may be paid to the insurance producer from the sale of any insurance.

Legislative History

(1969, P.A. 738; P.A. 77-614, S. 163, 610; P.A. 80-482, S. 286, 348; P.A. 90-243, S. 32; P.A. 94-160, S. 6, 24; P.A. 96-48, S. 1.) History: P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; P.A. 90-243 divided section into Subsecs. and rephrased provision re commissioner's power to establish a maximum fee schedule which may be charged by insurance agents or brokers; Sec. 38-75a transferred to Sec. 38a-707 in 1991; P.A. 94-160 substituted “producer” for “agent or broker” to accurately reflect the modernization and nomenclature of the industry and added provision in Subsec. (a) re compliance with regulations pursuant to Subsec. (b), effective January 1, 1996; P.A. 96-48 added Subsec. (d) to exempt producers who provide the prescribed disclosures and are advisory representatives of an investment advisor registered under the federal Investment Advisers Act.