Regulatory Alerts2009-01-01 | Bulletin 2009-2Oregon Insurance Division Bulletin INS 2009-2: Medicare Supplement Commission Practices
The Oregon Insurance Division issued Bulletin INS 2009-2 to explicitly prohibit insurers and producers from reducing Medicare Supplement sales commissions based on a purchaser's age. This age-based compensation practice violates Oregon Revised Statute 746.160, which bans trade arrangements that control commissions, discriminate against agents, or injure free competition and the public. The directive takes effect immediately and requires all market participants to align their compensation structures with state trade practice laws.
OREGON INSURANCE DIVISION BULLETIN INS 2009-2 TO: All insurers, insurance producers or other representatives for the sale of a Medicare Supplement, “Medigap” Policies RE: Unfair Discrimination Compensation Arrangements and Noncompliant Commission Activities. We are issuing this bulletin to provide the industry clarity relating to unfair discrimination compensation arrangements in the Medicare supplement marketplace. The Oregon Insurance Division has received information that some insurers may be reducing Medicare supplement sales commissions based on the age of the individual purchasing a Medicare supplement plan. This practice is in violation of the trade practices under Oregon Revised Statute 746.160 Practices injurious to free competition. The statute states, “except as otherwise expressly provided by law, no person, either within or outside of this state, directly or indirectly, shall enter into any contract, understanding or combination with any insurer or manager, agent or representative thereof for the purpose of, nor shall any such persons or insurers, jointly or severally do any act or engage in any practice for the purpose of: (1) Controlling the rates to be charged, or the commissions or other compensations to be paid, for insuring any risk or class of risks in this state; (2) Discriminating against or differentiating from any insurer, manager or agent, by reason of the plan or method of transacting business or the affiliation or non-affiliation with any board or association of insurers, managers, agents or representatives; or (3) Doing anything which is detrimental to free competition in the business or injurious to the insuring public.” This bulletin takes effect immediately. This bulletin is dated the 5 th day of May 2009 at Salem, Oregon. (Signed) May 5, 2009 Teresa D. Miller Date Acting Administrator Department of Consumer and Business Services Insurance Division, Consumer Advocacy 350 Winter St. NE PO Box 14480 Salem, OR 97301-0405 (503) 947-7984 FAX (503) 378-4351 TTY (503) 947-7280 www.oregoninsurance.org Theodore R. Kulongoski, Governor