When can a producer share a commission with another producer?

Pennsylvania insurance law strictly regulates commission payments to protect consumers and maintain ethical standards. A producermay share commissions only with another producer who is properly licensed in the same line of insuranceinvolved in the transaction. This rule ensures that only qualified individuals who meet licensing and education requirements receive compensation for insurance activities.

Commission sharing with unlicensed individuals is prohibited, regardless of residency. It is also not permitted to share commissions with producers licensed in a different line of authority. These restrictions are clearly outlined in Pennsylvania producer licensing rules and examination materials.

The other answer choices are incorrect. Residency in Pennsylvania does not determine commission legality, and commission sharing is not illegal when both parties are properly licensed. Therefore, the correct and verified answer iswhen the other producer is licensed in the same line of business.