State RegulationsTX specificDifficulty 1/5
Under TIC 4005.053, with whom may a Texas life and health agent share the commission on a sale?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 4005.053 an agent may share a commission only with a person who is licensed for the same type of coverage. Paying an unlicensed person is unlawful, so neither the client's written consent nor the label put on the payment changes the result, and the prohibition binds licensed agents rather than only insurers. The practical test is always the payee's license for that line of business.
Why the other options are wrong
- B) The sharing rules bind licensed agents, not only insurers.
- C) Making a referral does not entitle an unlicensed person to a share of the commission.
- D) The client cannot consent to a payment the Texas Insurance Code prohibits.
Memory hook
Check the payee's license before you split a commission.