In an era of hyper-inflation where everything seems to cost more and it feels like all levels of government are always asking for more fees and taxes, our state government leaders continue to find ways to operate more efficiently.   

The Ohio Department of Insurance (ODI) recently proposed an action that is case and point of fiscal responsibility. The proposal will lower the cost of doing business for Ohio insurance agents and companies by decreasing the agent appointment fee from $15 to $10. The change will be pursued in the biennium operating budget that the legislature will be considering for the next several months.  

A $5 reduction in a filing fee does not sound like much of a decrease until you add the total number of agent appointments with the fee reduction and see that it comes out to millions being save annually for policyholders, agents and the insurance community. 

In addition to being a great win for our industry, it also opens an opportunity to discuss with ODI and legislators the need to examine the current appointment fee structure. It has become an increasingly common approach for insurtech startups to opt to utilize the direct to consumer (online) model.  

Such insurance companies like Berkshire Hathaway (GEICO), who are the 7th largest insurance group in Ohio with 4.2% market share and over $700 million in direct written premium, predominately do not use an agent distribution model to sell and deliver their insurance products.  

Several other top 100 insurance groups use the direct-to-consumer model as well. Through discussions with the department and legislators, we want to ensure that the various models utilized have equity in the appointment structure system, especially as it concerns market share in the state.  

OIA submitted comments to ODI on the proposed change advocating for a level playing field with insurtech/direct insurance carriers. We are advocating for changes to the model as to how ODI is funded to ensure that all carriers and distribution models pay their fair share for ODI’s regulation of the insurance industry. Please contact John Wells, OIA’s Government Affairs Manager, at john@ohioinsuranceagents.com if you would like to share your thoughts on the proposed changes to the agent appointment fees.