To Amend The Law Concerning Miscellaneous Prohibited Practices Under The Arkansas Insurance Code; And To Clarify Fees Collected By Certain Brokers.
Summary
SB76 amends a provision of the Arkansas Insurance Code governing fees charged by licensed property and casualty agents, brokers, and surplus lines brokers. The bill expressly allows these professionals to charge an insured a fee in addition to the policy premium, so long as the fee is separately disclosed on the invoice or billing statement and is tied to the insurer’s filed rates and rules. It also requires that the fee be reasonable in relation to the cost of underwriting, issuing, and processing the policy or contract.
The bill further limits the combined amount of fees and producers’ commissions or other compensation to 20% of the total gross premium charged for the policy or contract. However, that 20% cap does not apply when a licensed property or casualty agent or broker refers a risk to a licensed surplus lines broker. In practical terms, the measure clarifies how broker fees may be collected and disclosed, while preserving a specific exception for surplus lines transactions.
Impact
SB76 updates Arkansas Code § 23-66-310(c) and affects the rules governing compensation practices in the insurance marketplace. It provides clearer statutory authority for brokers and agents to charge separate fees, establishes disclosure and reasonableness requirements, and sets a compensation cap in most cases. The bill primarily impacts licensed property and casualty agents, brokers, surplus lines brokers, insurers, and insureds who purchase policies through these intermediaries.
Sentiment
The available voting history suggests strong, bipartisan support for the bill, with unanimous third-reading votes in both chambers recorded at 35-0 in the Senate and 98-0 in the House. No committee transcripts were provided, and there is no evidence in the record of significant opposition or controversy. Overall, the bill appears to have been viewed as a technical clarification rather than a major policy dispute.
Contention
The main policy issue in SB76 is the balance between allowing brokers to charge additional fees and protecting consumers from excessive or unclear charges. The bill addresses this by requiring separate disclosure, tying fees to underwriting and processing costs, and imposing a 20% aggregate cap on fees and compensation in most cases. The principal exception—excluding surplus lines referrals from the cap—could be a point of interest for brokers and insurers operating in that market, but the voting record indicates no notable public or legislative conflict.