E&O Report | Everything Old is New Again
E&O Report | January 2026 | Volume 41, Number 1
Happy New Year and my most sincere best wishes for happiness, health and prosperity to you all for 2026.
My mother was both Old School…. and in a lot of ways Old World…. with superstitions. Whenever I started a new semester, a new job, a new apartment etc., she would always tell me to walk in with the RIGHT FOOT. (As I am writing this decades later, I am wondering if she meant that figuratively…. the “Correct” or Positive attitude… or literally. Well, for 60 years, I took it literally and actually use my right foot! So far so good.) So let us all start out on the correct foot for 2026.
That means revisiting an old issue, but one that seems more relevant than ever. Additional Service Fees – What you can charge your client’s for in addition to the commission on the premium.
Before we begin, please know that this article was created with the assistance of Tim Dodge, the savant and best resource on the issues BIG I members have.
THE ISSUE
As I understand your world, things are changing and you are doing more work to service clients than ever before. By “Service” I am referring to Post Issuance administrative and even ministerial work to assist the client. They run the gamut from issuing Certificates of Insurance, policy changes and endorsements, or gathering documents together for the various needs the client has for themselves or when needed in their business dealings.
The hours add up and is real money to all business owners. More to the point, it is usually not part of how one thinks of the operating costs of your business and certainly not fully covered by the commissions on premiums.
Recently, I and the BIG I have had several inquiries about the ability of a Broker to charge additional fees to clients.
THE ISSUE
We were recently asked to advise a Member as to whether or not the Broker could charge a client for all the time and manpower it will incur to provide the insured with copies of various documents in the Brokers files. Aside from the fact that such documents are NOT the property of the Client but are of the Broker, the task was going to be costly to the Broker.
THE STATUTE & ITS INTERPRETATION
Service Fees are governed by NY Insurance Law §2119. It has 5 main sections, “(a)” to “(e)”. The overall takeaway is that a Broker can charge a Service Fee if (1) it is writing, (2) signed by the Client (3) states the amount / rate to be charged and (4) the services to be provided. [The statute list and applies to an AGENT and/or CONSULTANT separate and apart from a BROKER, but that is an Article for another day.]
For our purposes today, know that each section is directed to different services/ functions. So while Section “(a)” says this (clearly PROCUREMENT RELATED):
“(a)(1) No person licensed as an insurance agent, broker or consultant may receive any fee, commission or thing of value for examining, appraising, reviewing or evaluating any insurance policy, bond, annuity or pension or profit-sharing contract, plan or program or for making recommendations or giving advice with regard to any of the above, * * * “ (Emphasis added)
Section “(c)” says this:
“(c)(1) No insurance broker may receive any compensation, other than commissions deductible from premiums on insurance policies or contracts, from any insured or prospective insured for or on account of the sale, solicitation or negotiation of, or other services in connection with, any contract of insurance made or negotiated in this state or for any other services on account of such insurance policies or contracts, including adjustment of claims arising therefrom* *” (Emphasis added)
Clearly, by the use of the terms “or other services in connection with” and “or for any other services on account of” is referring to POST ISSUANCE services.
As a not-so-quick legal aside, NY Insurance Law §2119 is a STATUTE. Meaning a law passed by the NY State Legislature and signed by the Governor. It has Constitutional protections[1] and is not Judge Made Law…commonly referred to as the Common Law. (Like the Duty of a Broker which is common law not statutory.) The significance is that there are strict rules of how one…especially a court, construes and interprets a statute.
The U.S. Supreme Court said, “We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.:” Consumer Product Safety Commission et al. v. GTE Sylvania, Inc. et al.,447 U.S. 102 (1980). “[I]n interpreting a statute a court should always turn to one cardinal canon before all others. . . .[C]ourts must presume that a legislature says in a statute what it means and means in a statute what it says there.” Connecticut Nat’l Bank v. Germain, 503 U.S. 249 (1992). Indeed, “when the words of a statute are unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.'” Id.
Another canon of statutory construction says that changes or differences in language must be read as having meaning and effect. Cf. Am. Nat’l Red Cross v. S.G., 505 U.S. 247, 263 (1992).
“It is an accepted rule that all parts of a statute are intended to be given effect and that a statutory construction which renders one part meaningless should be avoided” Rocovich v. Consolidated Edison Co., 78 N.Y.2d 509, 515 (1991); Matter of Avella v City of New York, 29 N.Y.3d 425 (2017).
A “statute . . . must be construed as a whole and . . . its various sections must be considered together and with reference to each other”. Matter of New York County Lawyers’ Assn. v. Bloomberg, 19 N.Y.3d 712, 721 (2012); Matter of Avella v. City of New York, 29 N.Y.3d 425 (2017).
CONCLUSION
The State of New York via the Legislature was clear in §2119 that there is a difference between PROCUREMENT related services like “examining”, “reviewing”, “evaluating”, “advising” and/or “making recommendations” as to insurance, AND……. POST ISSUANCE services like those listed in Section “(c)” which would be those like responding to the request this member got.
There is absolutely nothing wrong with advising your client that while you are happy to help and provide the documents, you must be compensated for that work. As they will think that is ALL part of the PROCUREMENT services provided, that should be a careful conversation. But you are entitled to compensation ….AS LONG as you have the Agreement in writing, signed by the client, stating the services to be provided and the fees.
The BIG I has such sample Service Fee Agreements as do I. We are at your service.
Very truly yours,
Howard S. Kronberg, Esq.
Kaufman Dolowich, LLP
[1] Heist v. Cameron, 211 A.D.2d 429, 430 (1st Dept., 1995), see also, Cantos v. Castle Abatement Corp., 251 A.D.2d 40, 42 (1st Dept., 1998); Hochberg v. Davis, 171 A.D.2d 192 (1st Dept., 1991);
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