Section 2699.6196 - Payment to Insurance Agents and Brokers for Member Employers when Premium Collected by Program(a) This section applies to guaranteed associations with an effective date of coverage prior to September 1, 1998 that have not made an election pursuant to Section 2699.6116. (1) Guaranteed associations may designate one or more insurance agents, as defined in Section 31 of the Insurance Code, or brokers, as defined in Section 33 of the Insurance Code, for guaranteed association members who participate in the program. When the program collects the employer premium from the member employers of the guaranteed association premium collection shall be as follows: (A) Except as specified in (B) below, the employer premium shall include an agent and broker fee if a designated insurance agent or, if none is designated, any other insurance agent as defined in Section 31 of the Insurance Code or a designated broker or, if none was designated, any other insurance broker as defined in Section 33 of the Insurance Code assisted the member employer in applying for the program, and if the member employer is determined to be qualified as a result of the application, and the agent or broker requests such payment in writing as part of the application and includes his or her name, license number, tax identification number, and address.(B) The employer premium shall include an agent or broker fee unless the member employer's application includes the member employer's certification that an agent or broker did not perform all of the following services:1. Assist the member employer in completing the application,2. Calculate or determine the cost of program participation for the member employer,3. Assist the member employer in enrolling the sole employees of the member employer.(C) For member employers who have made application to the program prior to July 1, 1996, the amount of the payment until the time of the qualified member employer's first annual requalification pursuant to Section 2699.6119 shall be: 1. For qualified member employers that have, at the time of application, 2-25 enrollees, the payment shall be $50 for the member employer per month and $4 per enrollee per month.2. For qualified member employers that have 26-50 enrollees at the time of application the payment shall be $75 for the member employer per month and $4 per enrollee per month.3. For qualified member employers that have 51 or more enrollees at the time of application the payment shall be $100 for the member employer per month and $4 per enrollee per month.(D) For member employers who have made application to the program on or after July 1, 1996, the amount of the payment until the time of the member employer's first annual requalification pursuant to Section 2699.6119 shall be: 1. For qualified member employers that have, at the time of application, 2-9 enrollees, the payment shall be $50 for the member employer per month and $4 per enrollee per month.2. For qualified member employers that have, at the time of application, 10-20 enrollees, the payment shall be $75 for the member employer per month and $4 per enrollee per month.3. For qualified member employers that have, at the time of application, 21-30 enrollees, the payment shall be $100 for the member employer per month and $4 per enrollee per month.4. For qualified member employers that have, at the time of application, 31-40 enrollees, the payment shall be $125 for the member employer per month and $4 per enrollee per month.5. For qualified member employers that have, at the time of application, 41-50 enrollees, the payment shall be $150 for the member employer per month and $4 per enrollee per month.6. For qualified member employers that have, at the time of application, 51 or more enrollees, the payment shall be $175 for the member employer per month and $4 per enrollee per month.(E)1. Except as specified in (4) below, the member employer premium shall continue to include an agent and broker fee after the employer's annual requalification pursuant to Section 2699.6119.2. For member employers who had an effective date of coverage before July 1, 1997, the amount of the agent or broker fees after the time of the qualified member employer's first annual requalification pursuant to Section 2699.6119 shall be as follows: a. For qualified member employers that have, at the time of application 2-25 enrollees, the payment shall be $30 for the member employer per month and $4 per enrollee per month.b. For qualified member employers that have 26-50 enrollees at the time of application the payment shall be $40 for the member employer per month and $4 per enrollee per month.c. For qualified member employers that have 51 or more enrollees at the time of application the payment shall be $50 for the member employer per month and $4 per enrollee per month.3. For member employers who had an effective date of coverage on or after July 1, 1997, the amount of the agent or broker fees after the time of the qualified member employer's first annual requalification pursuant to Section 2699.6117 shall be as follows: a. For qualified member employers that have, at the time of the application, 2-9 enrollees, the payment shall be $30 for the sole employer per month and $4 per enrollee per month.b. For qualified member employers that have, at the time of the application, 10-20 enrollees, the payment shall be $50 for the sole employer per month and $4 per enrollee per month.c. For qualified member employers that have, at the time of the application, 21-30 enrollees, the payment shall be $70 for the sole employer per month and $4 per enrollee per month.d. For qualified member employers that have, at the time of the application, 31-40 enrollees, the payment shall be $80 for the sole employer per month and $4 per enrollee per month.e. For qualified member employers that have, at the time of the application, 41-50 enrollees, the payment shall be $100 for the sole employer per month and $4 per enrollee per month.f. For qualified member employers that have, at the time of the application, 51 or more enrollees, the payment shall be $115 for the sole employer per month and $4 per enrollee per month.4. The employer premium for an annual period shall normally include an agent or broker fee. However, such fee may be terminated commencing with the second year of enrollment for member employers who made application to the program prior to July 1, 1996, and with the third year of enrollment for member employers who applied on or after July 1, 1996 and had an effective date of coverage before July 1, 1997, if the member employer's requalification request includes the employer's certification that an agent or broker provided neither of the following types of services: a. Assist the member employer in completing the requalification and/or assist the member employer's enrollees with the open enrollment process pursuant to Section 2699.6139.b. Assist the member employer or enrollees in resolving enrollment, billing, claims or other program issues.(F) The member employer may redirect any payment made pursuant to this section to another designated agent or broker or, if none is designated, any agent or broker, by submitting written notice signed by the employer to the program and providing the program with the information required under (a)(1)(A) of this section. The effective date of the redirection shall be within ninety (90) calendar days following receipt of the notice.(G) Payment to agents and brokers shall be terminated if one of the following occurs: 1. The agent or broker is no longer a licensed agent or broker.2. The agent or broker materially violates any law or regulation regarding the sale of insurance or fails to comply with any court order.3. The agent or broker commits any willful or dishonest act resulting in injury to the program, a participating carrier, or an enrollee.(H) For member employers who apply on or after July 1, 1996, when agent or broker fees are terminated pursuant to (G)(1), (2), or (3) above within the first two years, the member employer shall pay the equivalent monthly amount to the program as part of the program participation fee in accordance with Section 2699.6307, for the remainder of the first two years of enrollment.(b) This subsection applies to guaranteed associations with an effective date of coverage on or after September 1, 1998 and guaranteed associations that have made an election pursuant 2699.6116. (1) This section applies to guaranteed associations with effective dates of coverage on or after September 1, 1998 and guaranteed associations that have made an election pursuant to Section 2699.6116. For member employers of such guaranteed associations, the amount of the agent or broker fee shall be eight percent of the comprehensive individual medical premiums and comprehensive individual dental premiums.(2) Guaranteed associations may designate one or more insurance agents, as defined in Section 31 of the Insurance Code, or brokers, as defined in Section 33 of the Insurance Code, for guaranteed association members who participate in the program.(3) If a designated agent or broker, or if none is designated, any other insurance agent as defined in Section 31 of the Insurance Code or broker as defined in Section 33 of the Insurance Code assisted the member employer in applying for the program, and if the member employer is determined to be qualified as a result of the application, and the agent or broker requests such payment in writing as part of the application and includes his or her name, license number, tax identification number, and address then the agent or broker fee shall be paid to the identified agent or broker.(4) The member employer may redirect any payment made pursuant to this section to another designated agent or broker, or if none is designated, any other agent or broker, by submitting a written notice signed by the member employer to the program and providing the program with the information required under (b)(3) of this section. The effective date of the redirection shall be within ninety (90) calendar days following receipt of the notice.(5) Payment to agents and brokers shall be terminated if one of the following occurs: (A) The agent or broker is no longer a licensed agent or broker.(B) The agent or broker materially violates any law or regulation regarding the sale of insurance or fails to comply with any court order.(C) The agent or broker commits any willful or dishonest act resulting in injury to the program, a participating carrier, or an enrollee.(6) If the agent or broker fee is not directed to a particular agent or broker then the agent or broker fee shall be retained by the program as part of the program participation fee.Cal. Code Regs. Tit. 10, § 2699.6196
1. Renumbering and amendment of former section 2699.628.6 to section 2699.6196 filed 5-27-94; operative 5-27-94 (Register 94, No. 21).
2. Amendment filed 12-29-94 as an emergency; operative 12-29-94 (Register 94, No. 52). A Certificate of Compliance must be transmitted to OAL 4-28-95 or emergency language will be repealed by operation of law on the following day.
3. Certificate of Compliance as to 12-29-94 order including amendment of subsections (a)(1), (a)(3)(A) and (a)(4)(B)1. transmitted to OAL 4-12-95 and filed 5-22-95 (Register 95, No. 21).
4. Amendment filed 4-25-96; operative 5-25-96 (Register 96, No. 17).
5. Amendment of subsections (a)(3)(A), (a)(4)(A) and (a)(5)(B)1. filed 5-5-97; operative 7-1-97 (Register 97, No. 19).
6. Amendment filed 6-3-97; operative 7-1-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 23).
7. Amendment filed 7-3-98 as an emergency; operative 7-3-98 (Register 98, No. 27). A Certificate of Compliance must be transmitted to OAL by 11-2-98 or emergency language will be repealed by operation of law on the following day.
8. Editorial correction of subsection (a)(1)(E)1. (Register 98, No. 47).
9. Certificate of Compliance as to 7-3-98 order, including amendment of subsections (a)(1)(F) and (b)(4), transmitted to OAL 10-2-98 and filed 11-16-98 (Register 98, No. 47). Note: Authority cited: Section 10731, Insurance Code. Reference: Section 10731, Insurance Code.
1. Renumbering and amendment of former section 2699.628.6 to section 2699.6196 filed 5-27-94; operative 5-27-94 (Register 94, No. 21).
2. Amendment filed 12-29-94 as an emergency; operative 12-29-94 (Register 94, No. 52). A Certificate of Compliance must be transmitted to OAL 4-28-95 or emergency language will be repealed by operation of law on the following day.
3. Certificate of Compliance as to 12-29-94 order including amendment of subsections (a)(1), (a)(3)(A) and (a)(4)(B)1. transmitted to OAL 4-12-95 and filed 5-22-95 (Register 95, No. 21).
4. Amendment filed 4-25-96; operative 5-25-96 (Register 96, No. 17).
5. Amendment of subsections (a)(3)(A), (a)(4)(A) and (a)(5)(B)1. filed 5-5-97; operative 7-1-97 (Register 97, No. 19).
6. Amendment filed 6-3-97; operative 7-1-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 23).
7. Amendment filed 7-3-98 as an emergency; operative 7-3-98 (Register 98, No. 27). A Certificate of Compliance must be transmitted to OAL by 11-2-98 or emergency language will be repealed by operation of law on the following day.
8. Editorial correction of subsection (a)(1)(E)1. (Register 98, No. 47).
9. Certificate of Compliance as to 7-3-98 order, including amendment of subsections (a)(1)(F) and (b)(4), transmitted to OAL 10-2-98 and filed 11-16-98 (Register 98, No. 47).