Referral fees – referral fees are either cash or an item given to the source of a referral provided for the referral of a prospective insurance customer. The fees are lawful provided they are given for every referral, not just those that result in insurance sales. Acceptable fees can be paid in cash, with a gift card, merchandise, lottery tickets, etc. There is NO limit on the amount of a cash referral fee or the value of merchandise. For reference, DFS cites section 626.112(8), Florida Statutes.
Marketing/Advertising Gifts – these are items of merchandise given to prospective or current policyholders or to the public that market or advertise a licensee or agency. Acceptable items include coffee mugs, golf balls, golf towels, mouse pads, calendars, etc., and generally include the name of the agent or agency. Cash, gift cards, lottery tickets, etc., are not acceptable advertising gifts. Effective July 1, 2018, new legislation substantially expanded Section 626.9541(1)(m), Florida Statutes, by allowing insurers and agents to give advertising and promotional gifts having a total value of not more than $100 per insured or prospective insured in any calendar year.
Unlawful Inducements – the definition of an unlawful inducement in its simplest terms is to give a prospective customer, existing customer OR ANY OTHER PERSON a “thing of value” in exchange for something of value to the licensee. An example is giving any person or entity cash, a gift card, merchandise, lottery tickets, tickets to a sporting event, etc. in exchange for the ability to produce an insurance quote or sell insurance. If another agent or agency sells the same product for the same price, the consumer may choose to work with the licensee that offers a gift card. According to DFS, the law was created in part to deter unfair competition among licensees. DFS refers licensees to section 626.9541(1)(h) which is titled "Unfair methods of competition and unfair or deceptive acts or practices defined".
Gaps in Regulation of Structured Settlement Transferees
Why does this longstanding inequity exist?
Given that neither of these states require any sort of licensing or registration of structured settlement transferees, state legislature in these and other states should perhaps address the following two questions:
- What if an employee of a Florida structured settlement factoring company, or a factoring company in another state were to engage in this activity with a structured settlement annuitant?
- What if an employee of a Florida structured settlement factoring company, or a factoring company in another state were to engage in this activity with an individual or individuals with access to non public personal identifiable information concerning structured settlement annuitants?