31.13.01.20

.20 Commission to Agents and Creditors.

A. Maximum Commission.

(1) On all loans originating in Maryland, an insurer may not directly or indirectly pay, allow, or offer to pay any form of commission, as defined in Regulation .04B(6) of this chapter, in excess of the limits stated in these regulations on a form of credit life or credit health insurance regardless of whether the payment is made to a licensed agent, a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor or the licensed insurance agent.

(2) The maximum commission payable to all payees on each policy of credit life or credit health insurance may not exceed a total of 36 percent of prima facie premium rates.

(3) Commission paid to a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor, regardless of whether the payee is a licensed agent, may not exceed 32 percent of prima facie premium rates.

(4) Payment as described in §A(3) of this regulation will not preclude payment of commission to a licensed agent not listed in §A(3) of this regulation, provided the total commission paid under §A(3) of this regulation and under this subsection does not exceed the maximum rate stated in §A(2) of this regulation.

(5) A licensed agent proposing to pay commission to any payee listed in §A(3) of this regulation shall first inquire of the insurer whether any commission is being paid by the insurer to that payee on the same business. The agent may not pay that payee an amount which, when added to the amount paid by the insurer for the same business, would cause the payment to exceed the maximum rate stated in §A(3) of this regulation. The insurer shall cooperate with the agent in providing the information called for by this subsection.

B. Excluded from Commission. The following will not be deemed commission to an agent or creditor:

(1) The cost to the insurer of conducting a review performed in accordance with Regulation .26 of this chapter.

(2) Services performed by account executives or liaison personnel of the insurer who visit the offices of the creditor at occasional intervals and who are regular salaried officers or employees of the insurer and who receive no commission or other compensation directly dependent upon the amount of business obtained.