State RegulationsNY specificDifficulty 1/5
For purposes of New York's permitted compensation arrangements for Medicare supplement insurance, the term 'compensation' includes:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under New York's permitted compensation arrangements for Medicare supplement insurance, compensation is defined broadly to include pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy, expressly including bonuses, gifts, prizes, awards and finder's fees. Because non-cash rewards count, an issuer cannot evade the compensation limits by paying producers in prizes or gifts instead of commission dollars, and the Department of Financial Services can measure every form of producer reward against the rules.
Why the other options are wrong
- A) Compensation is not limited to the commission stated in the producer's contract; bonuses, gifts, prizes, awards and finder's fees are all included.
- B) Payments need not be cash or come directly from the issuer; any remuneration relating to the sale or renewal is compensation under the rules.
- C) There is no minimum dollar threshold; remuneration of any kind relating to the sale or renewal counts as compensation.
Memory hook
Medigap 'compensation' = money, gifts, prizes, bonuses, finder's fees; all of it counts.