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Over the years I've been approached many times about paying referral fees to a non-licensed person to refer insurance business to me.  While I would love to pay referral fees to real estate agents and mortgage lenders, I would be violating the code as set forth under IC 27-1-15.6-13 of the Indiana Department of Insurance.  Under that code I may "pay a referral fee to a non-licensed person as long as that person does not sell, solicit, or negotiate insurance".   Obviously the person is not going to "sell" or even "negotiate"; however, the person would definitely be soliciting in order to refer the business to me.

To that end, an ethical insurance agent would need to decline to pay referral fees.  And that's where great service and competitive  premium pricing come into play for the consumer, as well as solidifying the trust between their real estate agent and/or mortgage lender by looking out for the consumer's best interest.  

I may ask my real estate agents and mortgage lenders who refer business to me, to lunch or I might take them a plate of cookies, or make some other small gesture just as a way of maintaining good relationships.  That's what good business is all about.
Posted 4:25 PM

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