A licensed Ohio producer sold a life policy two years ago, and the insurer deferred part of the commission. The producer's license has since lapsed and was not renewed. Under Ohio law, the deferred commission:

Why B is correct

ORC 3905.18 prohibits paying commissions to a person required to be licensed but not licensed, but it expressly allows renewal or deferred commissions to be paid when the person was licensed at the time of the sale. Because this producer held an active license when the life policy was sold, the later lapse does not forfeit the deferred commission; the timing that matters is the licensing status at the sale, not at payment.

Why the other options are wrong

• A) There is no forfeiture of deferred commissions to the state; the statute protects commissions earned while the producer was properly licensed.
• C) Payment does not depend on renewing the license within 12 months; the licensing status at the time of the sale controls.
• D) The license need not be active at the time of payment; the exception in ORC 3905.18 looks to licensure at the time of the sale.

Memory hook

Deferred commissions follow the license you had at the sale, not today's.