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(1) An issuer or other entity may provide commission or other compensation to a producer for the sale of a Medicare supplement policy or certificate only if the first year commission or other first year compensation is no more than 200% of the commission or other compensation paid for selling or servicing the policy or certificate in the second year or period.

(2) The commission or other compensation provided in subsequent (renewal) years must be the same as that provided in the second year or period and must be provided for no fewer than five renewal years.

(3) No issuer or other entity shall provide compensation to its producers, and no producer shall receive, compensation greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates if an existing policy or certificate is replaced.

(4) For purposes of this rule, "compensation" includes pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards and service and finders fees.

(5) As part of the annual filing under ARM 6.6.508(7), the entity providing Medicare supplement policies shall provide copies of commission schedules.

(a) An issuer must provide reasonable compensation, as provided under the plan of operation of the program, to a producer, if any, for the sale of a Medicare supplement insurance policy or certificate. For purposes of this rule, "reasonable compensation" shall be at least 3% of the premium paid for the policy or certificate.

(b) An issuer may not vary the commission paid on the sale or renewal of a Medicare supplement insurance policy or certificate due to any factor other than the first year or renewal status of the policy or certificate. For example, issuers may not vary the commission based on the plan marketed or the age, health status, location, or claims experience of the insured. Issuers may pay a different commission on a policy transferred to a different producer for servicing purposes following the initial sale, or on a policy sold over the internet, so long as there is no other variation in the commission for any other reason.


History: 33-1-313, 33-22-904, MCA; IMP, 33-22-902, 33-22-904, 33-22-906, MCA; NEW, 1990 MAR p. 1688, Eff. 9/1/90; AMD, 1993 MAR p. 1487. Eff. 7/16/93; AMD, 1996 MAR p. 1637, Eff. 1/1/97; AMD, 2004 MAR p. 1017, Eff. 2/13/04; AMD, 2018 MAR p. 572, Eff. 3/17/18.

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