Claire-ification

Are you a member with a question? Contact IA&B VP-Advocacy Claire Pantaloni, CIC, CISR to find the answer at 717-918-9202 or ClaireP@IABforME.com.

QUESTION:

Can agencies implement a “no cash” policy for walk-in payments?

ANSWER:

In Pennsylvania, the Insurance Department has adjusted its position and opened up the ability for agencies to refuse cash payments if certain conditions are met. First, it is important to note that there is nothing in statute to prohibit an agency from refusing cash payments. By the same token, it is legal tender, and refusing cash could cause issues of timeliness of payment, resulting in lapses or cancellations for non-pay.

To avoid issues, agencies should: 1) document their process to avoid any possible claims of discrimination or other complaints; 2) consider what the agency will do in an event where not accepting cash could cause a lapse in coverage (having a contingency plan in place for such circumstances may avoid issues); and 3) check their agency agreements to make sure that refusing cash payments does not violate any contract terms.

Maryland is also flexible. According to the Maryland Insurance Administration, there is nothing in statute or regulation that requires a producer to accept cash payments. As long as the producer is treating all policyholders the same in this regard, they do not view this policy as a problem. In other words, Maryland mainly focuses on consistency of treatment so that the agency does not run into a potential discriminatory practice issue.

In Delaware, House Bill 299 was enacted in 2022. The law prohibits businesses from refusing cash payments, except in limited circumstances that would generally not apply to insurance agencies. Businesses also should not discriminate against individuals paying with cash. The use of machines that convert cash into prepaid cards is an acceptable alternative for those who do not want to deal with cash, but only so long as the device is on the premises, provides a receipt with the amount of cash deposited, does not charge a fee, and the prepaid card is not subject to an expiration date. The law became effective Jan. 1, 2023.

This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.