STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
Circular Letter No.
|TO:||All Public Health Law Article 44
Health Maintenance Organizations (HMOs); Article 43 Corporations and Health Insurers
Issuing Community-rated Contracts ("insurers"); Accident and Health Insurance
Agents; and Insurance Brokers
|RE:||Commission and Fee Payments
HMOs and insurers are reminded of the need to include in their premium rate manual for community-rated contracts on file with this Department the actual rate to be paid for commissions and fees payable to agents and brokers. The commission and fee schedule must provide for the same rate of payment for all contracts providing substantially similar benefits which make up a particular community-rated pool of risks (e.g. individual, small group (2-50 employees) and large group (over 50 employees)).
Any payments for additional services rendered for an HMO or an insurer by an insurance agent or broker which result in a payment to the agent or broker in excess of the maximum permissible rate, as established in the HMOs or insurers filed premium rate manual, must be in keeping with the following guidelines:
HMOs are reminded that the provisions of 11 NYCRR Part 52.42(f) (Regulation 62) dealing
with other compensation paid only concerns services rendered by an agent or broker for an
insured and any other compensation to the agent or broker which exceeds the HMOs
filed commission and fee schedule must meet the guidelines for additional services as set
forth in this Letter.