State RegulationsPA specificDifficulty 1/5
Who may lawfully receive a commission for the sale of an insurance policy in Pennsylvania?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The producer compensation rules, 40 P.S. §§ 310.72-310.74, confine commissions for insurance sales to persons properly licensed for the line involved. Compensation is the signature of the insurance business, and the state channels it through licensed producers so that everyone earning from a sale is accountable to the Pennsylvania Insurance Department. Paying commissions outside licensed channels undermines the regulatory structure and is prohibited.
Why the other options are wrong
- B) An unlicensed introducer may not earn a commission; receiving compensation for insurance sales requires a producer license.
- C) Home-office employees are salaried staff; commissions for sales are the province of licensed producers under 40 P.S. §§ 310.72-310.74.
- D) Family relationship confers no right to compensation; only licensure does, regardless of who referred the buyer.
Memory hook
No license, no commission — pay only through licensed channels.