Health Insurance Mastery Practice Exam

A licensed producer may share commissions with which of the following?

1. Her family members

2. Anyone she chooses

3. Her highest performing employee, who is licensed

4. Other licensed producers

The correct answer is: Her highest performing employee, who is licensed

A licensed producer is permitted to share commissions with other licensed producers because this practice is typically regulated by state insurance laws. These laws often require that any sharing of commissions occurs only among individuals who are licensed to sell insurance, ensuring compliance with ethical and legal standards within the industry. By restricting commission sharing in this way, the regulations aim to maintain professionalism and accountability. Although a licensed producer might have high-performing employees, if they are not licensed, sharing commissions with them would generally violate these regulations. Similarly, sharing commissions with family or anyone else not licensed to sell insurance could lead to potential legal issues and non-compliance with licensing requirements. Thus, the option that allows for commission sharing among licensed producers aligns with the broader standards of practice in the insurance industry, ensuring that all parties involved are properly trained and authorized to engage in such financial arrangements.