State RegulationsNY specificDifficulty 1/5
A licensed New York agent arranges a life insurance policy on the agent's own life through her agency. Under New York law, how much commission may the agent retain on policies insuring the agent's own life?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §2324(f), an agent who insures the agent's own life or property may not keep the ordinary commission: the commission the agent retains on such policies is capped at 5% of the aggregate annual amount. The cap prevents a producer from effectively rebating the full commission back to the producer's own household.
Why the other options are wrong
- B) Keeping the full commission on the agent's own policy would operate as an indirect rebate of premium, which §2324(f) is designed to prevent.
- C) The law does not bar all compensation on the agent's own policies; it limits what may be retained to the statutory percentage.
- D) The 10% figure is the controlled-business threshold under N.Y. Ins. Law §2103(i), which can cost a licensee the license — not the self-insurance commission cap.
Memory hook
Own policy, thin slice: an agent keeps only 5% of the commission.