Ray Wenger from the Department of Financial Services was our guest speaker at the FLTA Zone 4 meeting yesterday (6-24-11). And as always, Ray gave a great presentation and valuable insights into the thinking of our regulators. One of the topics discussed was the Department’s view that Florida Statutes §626.112 prohibits an Agency from paying its unlicensed marketing reps a commission based on the premium or number of title insurance policies sold.
He also indicated that the Department was enforcing violations of this statute and assessing fines and other penalties.
As one would expect, this generated a great deal of concern and discussion as to how an agency could legally compensate and incentivize its “true” employees. Ray did indicate his unofficial view that compensating “true” employees based on a share of the agency’s profitability, gross revenue or the profitability or gross revenue of an individual office would be legally permissible under §626.112. FLTA will be working with the Department to obtain further clarification of their position and guidance.
A more detailed bulletin is attached here.In the meantime, please share your thoughts on how this prohibition is likely to affect your business.