R590. Insurance, Administration. (Effective
9-30-01)
R590-207. Health Agent Commissions for Small Employer Groups.
R590-207-1. Authority.
This rule is
issued and based upon the authority granted the commissioner under
Sections 31A-2-201(3)(a) and 31A-30-104(6).
R590-207-2. Purpose.
The purpose of
this rule is to establish guidelines relating to commission structure for
[a] small group health insurance agent in the small
employer group market that affect access to health insurance coverage for
small employer groups.
R590-207-3. Applicability.
This rule applies
to all licensed insurers doing health insurance business under Title 31A,
Chapter 30, the Individual and Small Employer Health Insurance Act.
R590-207-4. Definitions.
The definitions
in Sections 31A-1-301 and 31A-30-103 apply to this rule.
R590-207-5. Commission Schedule Policy.
A health
insurance carrier shall not structure agent commission rates that,
directly or indirectly, create a restriction, hindrance, or barrier to
access to coverage for the smallest group identified in the commission
schedule.
The commission for
the smallest size group in the commission schedule may not be designed to
avoid, directly or indirectly, the requirements of guarantee issue or
renewal in the marketing of health insurance to small business owners.
TABLE
ACCEPTABLE EXAMPLES:
A commission
structure that is in compliance would be:
an employer group size 2-5 would receive a 10% commission,
an employer group size 6-25 would receive a 9% commission, and
an employer group size 26-50 would receive a 7% commission.
Another example of an acceptable commission schedule would be: for
employer group size 2-5 the commission would be $20/Per Member Per
Month(PMPM), for employer group size 6-25 the commission would be $18/PMPM,
and for employer group size 26-50 the commission would be $16/PMPM.
Case Size in
Lives
Rate Up Comm.
Rate
2-24
<
22
12%
2-24
22% to
<44%
8%
2-24
44% to
<65%
8%
2-24
65% to
85%
7%
25-50
8%
UNACCEPTABLE EXAMPLE:
Case Size in
Lives
First Year Renewal
Up to
3
3%
3%
4-14
8%
8%
15-29
7%
7%
30-50
6%
6%
Case Size in
Lives
Rate Up Comm. Rate
2-24
<
22%
12%
2-24
22% to
<44%
10%
2-24
44% to
<65%
8%
2-24
65% to
85%
6%
25-50
8%
R590-207-6. Penalties.
Any carrier with
a commission structure that is not in compliance with this rule after the
effective date of this rule will be considered in violation of this rule
and will be subject to the penalties provided for in Section 31A-2-308.
R590-207-7. Compliance Date.
This rule is in
effect on the date stated in the Notice of Effective Date form relating to
this rule that the department files with the Division of Administrative
Rules (the "effective date"). The effective date will follow a
period of 30 days during which interested parties will have time to
prepare to be in compliance with this rule. It will also be the date on
which the department will begin enforcing this rule. The Notice of
Effective Date is published in the Utah State Bulletin, a publication of
the Division of Administrative Rules. The Utah State Bulletin is found at
the website, http://www.rules.state.ut.us. In addition, the effective date
may be found at the department's website, http://www.insurance.utah.gov by
clicking on INDUSTRY RESOURCES and then RULES and scrolling down to the
appropriate reference to the rule.
R590-207-8. Severability.
If any provision
or clause of this rule or its application to any person or circumstance is
for any reason held to be invalid, the remainder of the rule and the
application of these provisions shall not be affected.
KEY: insurance law
2001
31A-2-201
31A-2-202
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