Are finders fees legal in califonia when selling insurance?

Question

Are finders fees legal in califonia when selling insurance?

Answer 1

Generally no, inducements are not allowed. However, if you are paying someone for referring business to you, to keep from getting into trouble, follow two simple rules: LOW (as in amount/value) and CONSISTENT (as in, give everyone the same thing). These rules are completely different if you're a registered rep governed under FINRA, in which case, NO, you can't do it. If you're just life/health/P/C licensed, check with the state of CA.

Answer 2

I'd call the CA Insurance Department and ask.  Many states don't allow it - but I"m not sure about CA in particular.

Answer 3

A finders fee is illegal per:

CALIFORNIA INSURANCE CODE SECTION 750-754

750.  (a) Except as provided in Section 750.5, any person acting individually or through his or her employees or agents, who engages in the practice of processing, presenting, or negotiating claims, including claims under policies of insurance, and who offers, delivers, receives, or accepts any rebate, refund, commission, or other consideration, whether in the form of money or otherwise, as compensation or inducement to or from any person for the referral or procurement of clients, cases, patients, or customers, is guilty of a crime. http://www.leginfo.ca.gov/cgi-bin/displa...