Indicate the scale of commission if asked by the customer
Share the commission by way of rebate
Disclose his licence on demand
Indicate the premium to be charged
Answer is Right!
Answer is Wrong!
The correct answer is: B. Share the commission by way of rebate.
An insurance agent is a person who sells insurance policies on behalf of an insurance company. They are required to be licensed by the state in which they operate. Insurance agents must disclose their license number to customers upon request. They must also indicate the premium to be charged for the policy.
It is not appropriate for an insurance agent to share the commission by way of rebate. This is because the commission is compensation for the agent’s services in selling the policy. The customer should not be asked to share in this compensation.
Here are some additional details about each option:
- Option A: Indicate the scale of commission if asked by the customer. This is correct. The insurance agent should be prepared to disclose the scale of commission they will earn from the sale of the policy.
- Option B: Share the commission by way of rebate. This is incorrect. The commission is compensation for the agent’s services in selling the policy. The customer should not be asked to share in this compensation.
- Option C: Disclose his licence on demand. This is correct. The insurance agent must be licensed by the state in which they operate. They must disclose their license number to customers upon request.
- Option D: Indicate the premium to be charged. This is correct. The insurance agent must indicate the premium to be charged for the policy.