State RegulationsIL specificDifficulty 2/5
An insurer wants to pay a per-sale incentive to a person who does not hold an Illinois producer license for selling an insurance policy. Under Illinois law, what is the result?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
215 ILCS 5/500-80 governs producer compensation and ties payment to licensed activity, and 215 ILCS 5/151 reinforces the licensing baseline for commission transactions. Paying anyone for insurance sales work that requires a license, whatever the payment is called, exposes both the insurer and the recipient to regulatory action.
Why the other options are wrong
- A) Relabeling the payment does not help; 215 ILCS 5/500-80 looks at the activity being compensated, not the label on the check.
- C) Supervision does not license the work; compensation for transactions requiring a producer license may go only to licensed producers.
- D) The compensation rule applies across lines of insurance; it is not limited to life insurance sales.
Memory hook
No license, no commission, no matter what you call the money.