A producer's license may be revoked if the commissioner finds that commission earned on 'controlled business' exceeds what percentage of total commissions?

A producer's license may be revoked if the commissioner finds that commission earned on 'controlled business' exceeds what percentage of total commissions?

• A. 25%
• B. 50%
• C. 75%
• D. 90%

Answer: (B)

Controlled business is when the producer has a financial interest in the policies or writes business for people closely connected to them (like relatives or their own agency). Regulators place a cap on how much of a producer’s commissions can come from this type of business to prevent self-dealing and keep the producer serving a broad client base. In this state, that cap is 50% of total commissions. If commissions from controlled business exceed half of all commissions, it signals an overreliance on tied interests, and the commissioner may revoke the license. That’s why the correct limit is 50%.

Controlled business is when the producer has a financial interest in the policies or writes business for people closely connected to them (like relatives or their own agency). Regulators place a cap on how much of a producer’s commissions can come from this type of business to prevent self-dealing and keep the producer serving a broad client base. In this state, that cap is 50% of total commissions. If commissions from controlled business exceed half of all commissions, it signals an overreliance on tied interests, and the commissioner may revoke the license. That’s why the correct limit is 50%.