Section 2699.6197 - Payment to Insurance Agents and Brokers for Individual Members 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 individual member premium from the individual members it shall be as follows:(A) Except as specified in (B) below, the individual member 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 individual member in applying for the program, and if the individual member 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 individual member premium shall include an agent or broker fee unless the individual member's application includes the individual member's certification that an agent or broker did not perform all of the following services:1. Assist the individual member in completing the application,2. Calculate or determine the cost of program participation for the individual member.(C) The amount of the payment until the time of the qualified individual member's first annual requalification pursuant to Section 2699.6119 of this part shall be: 1. For qualified individual members the payment shall be $14 for the individual member per month and $4 per enrolled dependent per month.(D)1. Except as specified in (3) below, the individual member premium shall continue to include an agent and broker fee after the individual member's annual requalification pursuant to Section 2699.6119.2. The amount of the fee after the time of the qualified individual member's first annual requalification pursuant to Section 2699.6119 shall be $9 for the individual member and $4 for each enrolled dependent per month.3. The individual member 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 individual member who made application to the program prior to July 1, 1996 and with the third year of enrollment for individual members who applied on or after July 1, 1996 and had an effective date of coverage before July 1, 1997, if the individual member requalification request includes the member's certification that the agent or broker provided neither of the following types of services: i. Assist the individual member in completing the requalification and/or assist the individual member with the open enrollment process pursuant to Section 2699.6139.ii. Assist the individual member resolving enrollment, billing, claims or other program issues.(E) The individual member 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 individual member to the program and providing the program with the information required under (a)(1) of this section. The effective date of the redirection shall be within ninety (90) calendar days following receipt of the notice.(F) 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.(G) For individual members who apply on or after July 1, 1996, when agent or broker fees are terminated pursuant to (F)(1), (2), or (3) above within the first two years, the individual member shall pay the equivalent amount monthly 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 individual members of such guaranteed associations, the amount of the agent or broker fee shall be seven 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 individual member in applying for the program, and if the individual member 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 individual member 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 individual member 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, § 2699.6197
1. Renumbering and amendment of former section 2699.628.7 to section 2699.6197 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) and (a)(4)(A)-(B) transmitted to OAL 4-12-95 and filed 5-22-95 (Register 95, No. 21).
4. Amendment of subsections (a)(4)(A)-(C) and new subsection (a)(7) filed 4-25-96; operative 5-25-96 (Register 96, No. 17).
5. Amendment of subsections (a)(4)(C) and (a)(4)(C)1., repealer and new subsection (a)(4)(C)2., and repealer of subsection (a)(4)(C)3. filed 6-3-97; operative 7-1-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 23).
6. 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.
7. Certificate of Compliance as to 7-3-98 order, including amendment of subsection (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 2699.628.7 to section 2699.6197 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) and (a)(4)(A)-(B) transmitted to OAL 4-12-95 and filed 5-22-95 (Register 95, No. 21).
4. Amendment of subsections (a)(4)(A)-(C) and new subsection (a)(7) filed 4-25-96; operative 5-25-96 (Register 96, No. 17).
5. Amendment of subsections (a)(4)(C) and (a)(4)(C)1., repealer and new subsection (a)(4)(C)2., and repealer of subsection (a)(4)(C)3. filed 6-3-97; operative 7-1-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 23).
6. 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.
7. Certificate of Compliance as to 7-3-98 order, including amendment of subsection (b)(4), transmitted to OAL 10-2-98 and filed 11-16-98 (Register 98, No. 47).