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The 192nd General Court of the Commonwealth of Massachusetts

Section 162E: Motor vehicle insurance made by insurer pursuant to American agency system; insurer commission arrangements

Section 162E. Any filing of rates for insurance to which chapter one hundred and seventy-five E is applicable which is made by an insurer doing business in this commonwealth through independent licensed insurance agents pursuant to the so-called American Agency System other than that of any employer to employee relationship and designated producers, shall specify the amount which such insurer shall pay to such agents as fair and reasonable expense premium commission for policies and bonds subject to such rates. Such insurer's commission arrangements shall guarantee that the total amount paid to all such agents under all such policies and bonds placed with the insurer during the period such rates are in effect shall, in the aggregate, total the amounts of commission applicable to all such policies and bonds. No portion of the expense premium commission shall be considered as profit sharing or expense reimbursement. The commissioner may require appropriate reports from such insurers in order to insure compliance with requirement. Nothing in this act shall prevent any insurer from paying compensation to its agents above that specified in its filing.

For private passenger automobile insurance policies and bonds effective during the four-year period commencing on the first day that rates for such insurance are regulated under chapter one hundred and seventy-five E following the effective date of this act, the amount paid in compliance with the requirements of the first paragraph of this section shall not be less than the dollars produced by utilization of the percentage of expense premium commission established by the commissioner in his opinion, findings and decision on private passenger automobile insurance rates to be charged immediately prior to such day. An insurer may vary the amount of commission paid to any agent by not more than plus or minus ten per cent provided the proper total dollars are paid.