State RegulationsFL specificDifficulty 2/5
A Florida agent recommends an expensive policy to a client solely because it pays the highest commission, even though a lower-cost policy from the same insurer would better fit the client's needs. Under Florida's ethical standards for agents, this is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Chapter 626, Florida Statutes, and the ethical standards the Department of Financial Services enforces, an agent owes clients honesty and fair dealing and must not place personal financial gain above the client's interest when recommending coverage. That the recommended policy is issued by an authorized insurer does not make a purely commission-driven recommendation ethical. Practically, suitability-based selling protects both the client and the agent's license.
Why the other options are wrong
- B) The insurer's authorized status addresses the legality of the product, not the ethics of the recommendation.
- C) The duty of fair dealing does not depend on the client asking the right questions first.
- D) No standard requires agents to maximize revenue at the client's expense.
Memory hook
Client first, commission second.