Michigan Laws 500.1240 – Payment or acceptance of commission, service fee, or valuable consideration
Current as of: 2024 | Check for updates
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(1) An insurer or insurance producer shall not pay a commission, service fee, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under this chapter and is not so licensed.
(2) A person shall not accept a commission, service fee, or other valuable consideration for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under this chapter and is not licensed.
Terms Used In Michigan Laws 500.1240
- Insurance: means any of the lines of authority in chapter 6. See Michigan Laws 500.1201
- Insurance producer: means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. See Michigan Laws 500.1201
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- Negotiate: means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, if the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers. See Michigan Laws 500.1201
- person: may extend and be applied to bodies politic and corporate, as well as to individuals. See Michigan Laws 8.3l
- Sell: means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company. See Michigan Laws 500.1201
- Solicit: means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company. See Michigan Laws 500.1201
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
(3) Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in this state if the person was required to be licensed under this chapter at the time of the sale, solicitation, or negotiation and was licensed at that time.
(4) An insurer or insurance producer may pay or assign commissions, service fees, or other valuable consideration to an insurance agency or to persons who do not sell, solicit, or negotiate insurance in this state, unless the payment would violate section 2024.