State RegulationsTN specificDifficulty 3/5
A Tennessee producer solicits an individual major medical policy for an applicant, and no commission is paid on the transaction. Under T.C.A. § 56-6-125(b), what may the producer do regarding compensation?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
T.C.A. § 56-6-125(b) addresses producer compensation on individual major medical policies in the no-commission context, allowing a fee to be charged when no commission is paid. This narrow statutory allowance keeps the transaction lawful without converting the producer into an uncompensated intermediary, and it does not extend to extracting commissions from applicants or leveraging policy delivery.
Why the other options are wrong
- A) The statute specifically contemplates a fee when no commission is paid, so uncompensated service is not required.
- B) Charging the applicant a commission is not what the statute permits; the allowance is a fee in the no-commission setting, and T.C.A. § 56-6-125 governs it.
- C) Conditioning policy delivery on commission payment is coercive and finds no support in T.C.A. § 56-6-125(b).
Memory hook
No commission, no problem: the major-medical fee fills the gap.