COLUMBUS, Ohio -- A reduction in the fee insurance companies pay to appoint insurance agents is projected to result in $11.3 million in reduced costs each year. An amended rule took effect in Ohio June 30 that reduces the agent appointment fee 25%, to $15 from $20.
“Lowering the cost of doing business in Ohio benefits consumers and further strengthens Ohio’s vibrant insurance market,” said Lt. Gov. Mary Taylor, also director of the Ohio Department of Insurance, in a prepared statement.
State law requires insurers to “appoint” agents before the agents can act on their behalf to sell, solicit or negotiate insurance products. The department has increased operational efficiencies by updating its technology systems, thereby reducing the expense of monitoring company and agent appointments, Taylor noted.
A $5 appointment termination fee was eliminated in 2013 while those who renew licenses late now pay $50 instead of $100. The license reinstatement fee was also dropped from $300 to $100.
Insurers will see savings directly because they pay most of the fees to appoint agents, Taylor explained. Agents and agencies should also benefit because the insurance companies pass the fees onto them. Consumers could benefit from the fee reduction in the form of lower premiums, assuming the insurance companies will pass along the savings.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our free daily email headlines and to our twice-monthly print edition.