Which of the following is true regarding commission sharing by insurance agents?

Commissions can only be shared with a duly licensed person is accurate because it aligns with regulatory standards governing the insurance industry. In essence, sharing commissions is meant to be confined to those who are legally recognized professionals within the field. This regulation protects consumers and ensures that only qualified individuals handle financial transactions related to insurance policies.

The intent of this rule is to maintain a level of professionalism and compliance within the insurance sector, as licensed agents have undergone the necessary training and verification to provide these services. By allowing only licensed individuals to share commissions, the framework supports the integrity of the insurance process and ensures accountability.

In contrast, sharing commissions with individuals who lack the proper licensing could lead to unethical practices and undermine public trust in the insurance industry. It also helps avoid potential legal liabilities that could arise from unlicensed activities. Thus, it is essential for agents to adhere strictly to this requirement regarding commission sharing.