State RegulationsNY specificDifficulty 3/5
A licensed New York agent sells a long-term care insurance policy to herself. Under N.Y. Ins. Law §2324, how much commission may the agent retain on her own policies?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §2324, an agent may retain commission on the agent's own policies only up to 5% of the aggregate annual amount. The allowance is deliberately small: an agent's own-policy commission is tolerated only in that limited measure, and anything beyond it is treated as an unlawful rebate. The rule keeps an agent's personal purchases from becoming a disguised inducement.
Why the other options are wrong
- A) Retaining the full commission on the agent's own policy crosses into rebating territory; the statute caps the permitted retention well below the full amount.
- C) An outright prohibition overstates the rule; a limited retention on the agent's own policies is specifically permitted.
- D) An insurer's written consent cannot authorize what the statute limits; the cap applies regardless of any private arrangement.
Memory hook
Own-policy commission: capped at 5%, or it is a rebate.