Insurance Law §2324 prohibits authorized insurers, licensed agents and licensed brokers from sharing commissions and/or rebating to an insured, or an employee of an insured, to induce the insured to acquire or retain insurance coverage.
In response to the question of whether a broker can quote a premium net of commission and add a service fee, the Department of Financial Services concluded in its OGC Opinion of April 30, 1996 that it would constitute unfair discrimination and rebating in violation of the law.
The Department of Financial Services stated in OGC Opinions of February 12, 2001 and May 22, 2003 that premiums cannot be quoted net of commissions in New York. However, it appears that this is permitted in some other states, at least under certain circumstances.
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This is not intended to be nor should it be construed as legal advice. Consult with your own legal counsel.
Last Reviewed/Revised: October 13, 2020