Is it legal for licensed agents to share commissions with someone who is not licensed?

Is it legal for licensed agents to share commissions with someone who is not licensed?

• A. Yes
• B. No
• C. Only with supervisory approval
• D. Only if both are employed by the same insurer

Answer: (B)

In Texas, compensation tied to selling or procuring insurance must go to someone who is licensed for the line of authority involved. This rule exists to ensure that anyone who handles insurance transactions has met the required qualifications and is subject to regulatory oversight. Therefore, sharing a commission with an unlicensed person isn’t legal, and neither supervisory approval nor having them employed by the same insurer changes that. If you want to involve someone who isn’t licensed, the compensation must be structured in a way that isn’t tied to the sale (e.g., wages for non-sales tasks), or that person must obtain the appropriate license before receiving commissions.

In Texas, compensation tied to selling or procuring insurance must go to someone who is licensed for the line of authority involved. This rule exists to ensure that anyone who handles insurance transactions has met the required qualifications and is subject to regulatory oversight.

Therefore, sharing a commission with an unlicensed person isn’t legal, and neither supervisory approval nor having them employed by the same insurer changes that. If you want to involve someone who isn’t licensed, the compensation must be structured in a way that isn’t tied to the sale (e.g., wages for non-sales tasks), or that person must obtain the appropriate license before receiving commissions.