Are brokers allowed to charge additional fees beyond commissions for surplus lines transactions?

Brokers can indeed charge additional fees beyond commissions for surplus lines transactions as long as these fees are disclosed to the client. This requirement for disclosure is crucial because it ensures transparency in the broker-client relationship. Clients must be made aware of all the costs associated with the transaction so they can make informed decisions.

By requiring disclosure, regulators aim to protect consumers from unexpected charges and maintain trust in the insurance market. Thus, if a broker informs the client about any additional fees and the fees are deemed reasonable, it is permissible for them to charge these fees alongside their commissions.

The context that surrounds surplus lines insurance, which involves coverage from non-admitted carriers, further supports the idea that additional fees may apply but must be clearly articulated to clients. This practice is designed to uphold ethical standards in the industry while providing brokers the flexibility they need to cover their operational costs.