Referral Fees Ok?

[new2insurance2009]

Hello again

In my many years of sales experience it was not uncommon to reward a client with a small token of appreciation....i.e. gift card to a restaurant, movie etc. for either using them, or referring a friend/family member. Is this type of practice ok in the insurance world? This is the first time that I am licensed, and I'm aware there may be specific guidelines to follow as to not jeopordize one's license-Perhaps this is per individual state guidelines....

As always thanks!

 

[Paradigm]

Yes you can do that- but you cannot rebate which is to reduce the cost of a policy by giving back a portion of your commission- that is illegal and will result in license revocation.

 

[new2insurance2009]

Yes you can do that- but you cannot rebate which is to reduce the cost of a policy by giving back a portion of your commission- that is illegal and will result in license revocation.

again thank you- so one could use this in marketing....offer a gift card to say thanks for the written biz, or advertise that a client would receive a gift card if they refer a potential customer (who of course is approved )

 

[DJM]

again thank you- so one could use this in marketing....offer a gift card to say thanks for the written biz, or advertise that a client would receive a gift card if they refer a potential customer (who of course is approved )

correct

What I should have said is that check your states law as each state is different, I just assumed something and made an ass of my self :(

 

[Winter_123]

again thank you- so one could use this in marketing....offer a gift card to say thanks for the written biz, or advertise that a client would receive a gift card if they refer a potential customer (who of course is approved )

Be careful. There are some modest thank you type things you can do but if you start venturing into only giving the gift card if the client is approved then, for example, how do you answer a person who makes a referral for a life or health application and wants to know where their gift is? You gonna tell them the client wasnt approved? Quick way to lose your license by sharing financial or health information about your client with someone else. Not saying you cant tread in that area and handle yourself well, just be sure you understand the minefields and how to navigate them.

 

[motorcyclegogo]

correct

You are able to give a "thank you" gift for whatever reason, But you CANNOT, I REPEAT, CANNOT advertise that there will be a GIFT, for referrals, ect.

 

[new2insurance2009]

Be careful. There are some modest thank you type things you can do but if you start venturing into only giving the gift card if the client is approved then, for example, how do you answer a person who makes a referral for a life or health application and wants to know where their gift is? You gonna tell them the client wasnt approved? Quick way to lose your license by sharing financial or health information about your client with someone else. Not saying you cant tread in that area and handle yourself well, just be sure you understand the minefields and how to navigate them.

Good point.....

 

[agent C]

Each states rules are different, Check with your state just to be safe.

 

[moonlightandmargaritas]

but you cannot rebate which is to reduce the cost of a policy by giving back a portion of your commission- that is illegal and will result in license revocation.

As has been discussed previously on the forum, rebating is legal in some states, not in others.

 

[LGilmore]

"Each states rules are different, Check with your state just to be safe."

The absolute correct advice everytime. FOLLOW it and you will never have a problem.