Post-Termination Commissions and Renewals: Who has to Pay What to Whom‪?‬

Ordinarily, an employer has no obligation to pay a former at-will employee renewal commissions after the termination of the employment relationship. Typically, however, a written agreement may define the commission structure. Such an agreement may provide for the payment of renewal commissions on accounts placed while employed at the company or it may preclude the payment of renewal commissions after the employee's termination of employment. What if there is no written agreement but an oral promise to pay renewal commissions? Read on, as you may be surprised to learn what courts applying New York law look have found and how the Office of General Counsel treats commission payments to brokers and agents who are no longer licensed. By way of background, Section 2102 of New York Insurance Laws provides: "(e) (1) No person shall accept any commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this article and is not so licensed" And, in order for a licensed New York insurance agent to receive commission payments, the agent must be both licensed and appointed as agent by the insurer at the time that it places the business.