23 CAR § 83-114. Agent compensation

(a) As to credit life or credit disability insurance written by or through a creditor, any affiliate, associate, subsidiary, director, officer, employee, or other representative of or for such creditor, or by or through any agent or broker, all compensation for writing or handling such insurance shall not exceed forty percent (40%) of the maximum premiums permitted herein. (b) Compensation shall include, but shall not be limited to, the receipt directly, indirectly, or reciprocally of: (1) Commissions, contingent commissions, service fees, policy fees, expense allowances or reimbursements, dividends, or other distribution of earnings based solely upon the profits derived from issuing or reinsuring any policy of credit life or credit disability insurance; (2) Gifts, all benefits such as items of merchandise, equipment, travel, conventions, vacations, rewards, bonuses, trading stamps, scripts, or any other form of remuneration resulting directly or indirectly from the sale of credit insurance or as an inducement to or payment for sales made or volumes of sales obtained; (3) Experience refunds, retrospective rate credits, and dividends, for the sole purpose of determining presumptively reasonable compensation allowances under this section; and (4) Any amounts or things of value received from or paid by any person other than an insurer in consideration of the sale or retention of credit insurance. (c) Compensation shall not include: (1) Reinsurance premiums paid to or underwriting profits generated by an insurer or reinsurer not owned by, controlled by, or under common control with: (A) A credit insurer; (B) An agent; (C) A broker; (D) A creditor; (E) A group of creditors; or (F) Any affiliate, associate, subsidiary, director, officer, employee, or other representative of or for such: (i) Credit insurer; (ii) Creditor; or (iii) Group of creditors; (2) Reinsurance premiums paid to or underwriting profits generated by an insurer or reinsurer owned by, controlled by, or under common control with a credit insurer, an agent, a broker, a creditor, a group of creditors, or any affiliate, associate, subsidiary, director, officer, employee, or other representative of or for such credit insurer, creditor, or group of creditors, on accounts in existence with such insurer or reinsurer on January 27, 1986, which have been registered with the Insurance Commissioner in accordance with subsection (d) of this section; and (3) Payments made to successors in interest of the accounts described in subdivision (c)(2) of this section. (d) Any insurer intending to utilize subdivision (c)(2) of this section must register with the commissioner within thirty (30) days after the effective date of this part the: (1) Identity of the account or accounts involved; (2) Name of the insurer or reinsurer; (3) Name and address of the: (A) Agent; (B) Broker; or (C) Creditor reinsurer; and (4) Name and address of the agent, broker, creditor, or group of creditors through which the account is written. (e) Any insurer that, for credit insurance written in any of its credit insurance accounts in this state, charges or proposes to charge the presumptive rates of premium set forth in 23 CAR §§ 83-105 and 83-106 and that, for production of such insurance, pays or proposes to pay, directly or indirectly, compensation in excess of the presumptive allowance set out in subsection (a) of this section shall: (1)(A) Reduce the premium rates charged in any such account by four percent (4%) or fraction thereof of the applicable presumptive premium rate set out in 23 CAR §§ 83-105 and 83-106 for each one percent (1%) or fraction thereof by which it pays or proposes to pay compensation in excess of the presumptive allowance set forth in subsection (a) of this section. (B) Such compensation in excess of the presumptive compensation rate shall be applied thereafter to all subsequently written net premiums calculated upon the basis of the reduced rates of premium as specified above; and (2) File with the commissioner a transcribed copy of any agreement, whether written or oral, direct, indirect, or reciprocal, by which for the sale of credit insurance in this state it pays, proposes to pay, or contingently may pay compensation in excess of the allowable presumptive compensation set out in subsection (a) of this section. (f)(1) In the event that premium rates for any account of credit insurance are required to be reduced in accordance with subsection (e) of this section by reason of base or front-end compensation in excess of the presumptive compensation allowance, the effective date of such reduction shall be the same as the effective date of the agreement providing for such payment. (2) For any reduction of premium rates required by subsection (e) of this section by reason of contingent compensations based upon favorable experience which, alone or together with base or front-end compensations, exceed the presumptive compensation allowance set out in subsection (a) of this section: (A) The effective date of such reduction of premium rates shall be the termination date of the period for which such contingent compensations are paid; and (B) Such rate reduction shall remain in effect in the account for a period of twelve (12) months thereafter, regardless of any change or replacement of the insurer during such twelve-month period. (g) In the event that premiums are paid and charged debtors at rates in excess of the reduced rates required by subsection (e) of this section, whether by inadvertence or otherwise, the insurer shall be responsible for the refund of such overpayment to the person or persons who paid such premium in addition to any other remedies provided by law.