Referral "Thank You" Gifts

[AIABROKER]

I have partnered up with a P&C agent and an AFLAC agent who are referring me some FE business. I know I cannot just write them a check for these referrals and they do expect something. I don't come across enough business to reciprocate at this time. I'm thinking of just giving them a gift card.

How would you handle this if you were to have the same set up? Do you go off a percentage of the commission? What happens if there is a charge back (if advanced)? Probably makes sense to go as earned for that business but I don't want to give the person a $10 gift card every month. I appreciate your input.

 

[JimmyUt]

I have partnered up with a P&C agent and an AFLAC agent who are referring me some FE business. I know I cannot just write them a check for these referrals and they do expect something. I don't come across enough business to reciprocate at this time. I'm thinking of just giving them a gift card.

How would you handle this if you were to have the same set up? Do you go off a percentage of the commission? What happens if there is a charge back (if advanced)? Probably makes sense to go as earned for that business but I don't want to give the person a $10 gift card every month. I appreciate your input.

If they are licensed you can pay them whatever you want.

 

[AIABROKER]

If they are licensed you can pay them whatever you want.

I thought there was a rule that an insurance agent cannot pay even another licensed agent a referral fee. It's been 13 years since I took the L&H exam so not sure if something has changed. I thought I heard that during training.

 

[Norton]

I thought there was a rule that an insurance agent cannot pay even another licensed agent a referral fee. It's been 13 years since I took the L&H exam so not sure if something has changed. I thought I heard that during training.

Check your state laws and regulations, but I believe -- generally speaking -- an agent is not allowed to pay a non-licensed individual a referral fee contingent upon the referral becoming a client... Meaning: you can give someone a fee or gift, etc., for sending referrals your way, but it can't be "I'll pay you $x.xx if you send me people who write policies with me."

I assume each state has its own rules, of course... and I'm no lawyer and can't speak definitively. But that's what I think works here in FL.
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If they are licensed you can pay them whatever you want.

If they're only P&C and don't have a life license, they're unlicensed as it pertains to life insurance and would be treated like anyone else in the public... or am I just up too late?

 

[russelltw]

In NC, you can pay a referral fee to a non-licensed agent. So it must vary state to state. A quick search on your Dept of Ins site may give you an answer.

http://www.ncdoi.com/ASD/Documents/FAQs/Referral%20Fees_AAFAQ.pdf#search="referral fee"

referral fee to unlicensed person = okay
commission to unlicensed person = no okay

The unlicensed person can not discus details of policy...

 

[GoCubsGo]

Isn't it you can pay a referral as long as it isn't contingent on a sale. Just pay a small amount for every one. I would do something like a $5 credit with every referral and when they build up to a $25 or $50 balance you give them a gift card.

Or maybe $5 for each one with $25 additional for every tenth one.

 

[JimmyUt]

He mentioned the referrals were both from licensed agents. My understanding is that you can pay another licensee however you please, it is the referrals to the non licensed that get us in trouble.

 

[AIABROKER]

He mentioned the referrals were both from licensed agents. My understanding is that you can pay another licensee however you please, it is the referrals to the non licensed that get us in trouble.

Yes, these referrals would be coming from licensed life agents. I will check the state insurance website. It sounds like, from what I see here is that I can pay the other licensed agent directly for the closed referrals.

 

[WinoBlues]

You guys are way over thinking this.

 

[GoCubsGo]

He mentioned the referrals were both from licensed agents. My understanding is that you can pay another licensee however you please, it is the referrals to the non licensed that get us in trouble.

I knew the AFLAC guy would have a life license but it didn't sound like the P&C guy did or he would be referred as a P&C/Life guy. ha