Licensing Requirements For Persons Or Entities Collecting Unpaid Insurance Premiums From Commercial Entities
Mass. Gen. Laws chapter 93, section 24 requires that persons or entities engaged in the business of collecting or receiving payment for others of any account, bill or other indebtedness, or engaged in soliciting the right to collect or receive payment for another of any such indebtedness, shall obtain a collection agency license from the Division. This licensing requirement applies to commercial and individual consumer accounts. Regulation 209 CMR 18.03 defines a "debt" as "money or its equivalent which is, or is alleged to be, more than thirty days past due and owing, unless a different period is agreed to by the debtor, under a single account as a result of a purchase, lease, or loan of goods, services, or real or personal property."
The company in this case has been incorporated to collect, on behalf of insurance companies, unpaid workers' compensation and general liability insurance premiums from commercial entities. These types of insurance premiums initially are calculated based upon estimated revenue or payroll figures at the beginning of the policy period; the true premium is recalculated, at the end of the policy period, based upon an audit. The Division is of the opinion that an entity engaged in collecting the adjusted insurance premiums need not have a collection agency license unless it attempts to collect insurance premiums which become more than thirty days past due.