Ohio Miscellaneous Regulatory Material DEPARTMENT OF INSURANCE BULLETINS Bulletin 87-2 Kickbacks prohibited	Effective Date July 23, 1987

The Department has learned that kickbacks are being offered to insurance agents and adjusters for referrals of repair business.

Ohio law prohibits the solicitation and receipt of kickbacks. Insurance agents and adjusters are prohibited from soliciting or receiving kickbacks.

The acceptance of kickbacks by insurance agents is a violation of Ohio Administrative Code Section (National Insurance Law Service edition) 3901-1-24(A)(1) or (Banks-Baldwin edition) 3901-1-24(B)(1).

The acceptance of kickbacks by insurance agents is a violation of Ohio Administrative Code Section 3901-1-40(B)(1) and 3901-1-10(H)(1).

The acceptance of kickbacks by agents and others employed by insurers to settle claims is prohibited by Ohio Administrative Code Section (National Insurance Law Service edition) 3901-1-07(C)(m) or (Banks-Baldwin edition) 3901-1-07(C)(13).

Kickbacks paid for referrals of repair business are particularly pernicious because they inflate the cost of premiums for all consumers and artificially increase the claims history of individual consumers.

Kickbacks also impair the accuracy of financial reports and rate filings made by insurers.

Insurers shall inform their agents and adjusters of this bulletin and take appropriate action to correct any violations of law.

In conducting investigations of suspected kickback schemes, insurers may request the assistance of the Department's fraud division (614) 481-5748 or in Ohio toll free (800) 843-8356.

George Fabe
Director of Insurance

CROSS REFERENCE RULE 3901-1-24; RULE 3901-1-40; RULE 3901-1-10;
RULE 3901-1-07

DATE NEW 1987

SUBJECT CATEGORY 400 - Insurance representatives
700 - Trade practices

INDEX
Insurance representatives and Illegal compensation and
Repair service companies