legal referral fees?

[AGLALord]

I have been thinking of doing something similar with business owners I sell to. From what I have seen and heard the big no no is paying a fee based on the sale.

How about paying based on the appointment? If I see the person and get a chance to talk, I pay a referral fee, not based on if I sell.

How does that sound?

 

[myinsurebiz]

Why not just set them up as employees of the company and give them shares of a profit pool that are based on business they bring to the agency? Or - if your State allows it - set them up as a Sub-Agent?

Tom

 

[djs]

Some carriers may have limits because it impacts the type of business that it attracts. I don't think there is any legal limit, but at some point, it begins to smell fishy. You have to use your judgement on that.

Keep in mind, you have to provide the incentive for the referral, not for the business. In these types of cases, most referrals will result in business, but not always. In fact, with todays mortgage underwriting, more cases will go unissued than normal, because the loan falls apart.

Dan

 

[aray100]

It has always been my understanding that there is no cap. You just have to be sure to pay for EVERY referral whether you close the deal or not. The best arrangement for all is to get someone licensed that will have the ability to refer you business consistently. That way you only have to pay for the ones you get and they will get paid for renewal if that is the deal you make.