State RegulationsAZ specificDifficulty 2/5
An unlicensed clerical employee of a Scottsdale agency helps sell an insurance policy and asks for a share of the commission. Under Arizona law, may the insurer pay that commission?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under A.R.S. 20-298, commissions for the sale of insurance may be paid only to licensed producers. An unlicensed employee may support the business in clerical ways, but paying that person a share of a selling commission would violate the statute regardless of internal consent, supervision, or payment routing.
Why the other options are wrong
- A) Wrong because insurer consent cannot override A.R.S. 20-298; the prohibition on paying commissions to unlicensed persons is statutory.
- B) Wrong because working under a licensed producer's supervision does not license the employee; A.R.S. 20-298 still bars paying the commission to an unlicensed person.
- D) Wrong because routing the payment through the business entity does not change the analysis; the commission for selling may go only to a licensed producer.
Memory hook
No license, no commission — 20-298 pays producers only.