State RegulationsAZ specificDifficulty 2/5
An agency owner in Mesa closes a life insurance sale and wants to pay a commission bonus to the unlicensed receptionist who set the appointments. Under A.R.S. 20-298, what is the lawful treatment of the commission?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-298 provides that commissions may be paid only to producers licensed for the applicable line of authority. An unlicensed employee may support the agency in salaried ways, but a commission for the sale itself may go only to an individually licensed producer.
Why the other options are wrong
- A) Contribution to the sale does not matter; A.R.S. 20-298 conditions commission payment on licensure.
- B) Insurer approval cannot override the licensing requirement of A.R.S. 20-298.
- C) Tax reporting does not cure payment of a selling commission to an unlicensed person.
Memory hook
No license, no commission — A.R.S. 20-298 pays only the licensed.