I was asked recently, “If I send you a client for insurance – how much of a finder's fee do I get?” My answer was simple: “If you have an insurance license specific to the product, we'll talk. If not, you get nothing.”
I'm not sure how it works for yacht brokers and I do not know if any federal or state statutes govern the procedures brokers must follow in order to compensate unlicensed persons/third parties following the sale/charter of a vessel. Furthermore, I do not know if IYBA, MYBA, CPYB or brokerages have any professional standards or guidelines regarding the practice of providing financial incentives for referring business or compensation after a yacht or charter sells. I know it happens. I've seen it happen. Whether or not it is effectively regulated is a big unknown.
Regardless, the insurance industry has federal and state statutes that dictate to whom compensation may be paid following the sale of an insurance contract. With specific regards to insurance there is very little grey area and it is regulated. Simply put, along with kicking back a percentage of commission to a person who purchases a policy, offering unlicensed people cash incentives to purchase insurance policies or paying a referral fee is illegal in the State of Florida, according to the Deceptive Trade Practices Act and Florida statute.
Florida Statue section 626.9541 titled “Unfair methods of competition and unfair or deceptive acts or practices defined” defines rebating as: "knowingly… (b) Paying, allowing, or giving, or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance contract, any unlawful rebate of premiums payable on the contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract;…"
The statute also deals with compensating anyone - licensed or unlicensed - following the sale of an insurance policy. The following is from the Florida Statutes 626.112:
(8) No insurance agent, insurance agency, or other person licensed under the Insurance Code may pay any fee or other consideration to an unlicensed person other than an insurance agency for the referral of prospective purchasers to an insurance agent which is in any way dependent upon whether the referral results in the purchase of an insurance product.
(9) Any person who knowingly transacts insurance or otherwise engages in insurance activities in this state without a license in violation of this section commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
Again, I don’t sell yachts or charters so I can't make a determination of whether or not yachting industry brokers offering or giving portions of commissions to third parties is right or wrong; I'll let the yacht brokers and the principals of the yacht brokerages make that determination.
Regarding compensating unlicensed insurers for referring business I'll simply say this - I know others do it but I don't. I sell insurance and I am happy to do what I do to help you and your clients have a great experience on the water; but I cannot risk my license to do it – and I would never expect anyone to risk theirs for me.