State RegulationsOH specificDifficulty 3/5
A producer's unlicensed assistant refers a prospect who then buys a policy; the assistant asks for a share of the commission. Under ORC 3905.181, the producer may:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
ORC 3905.181 prohibits paying any commission, service fee, brokerage fee, or other consideration to a person required to be licensed but not licensed, and prohibits unlicensed persons from accepting such consideration. The one allowance is a referral fee to an unlicensed person paid as a fixed dollar amount per referral that does not depend on whether a sale occurs; a sale-contingent commission share remains prohibited under ORC 3905.18 as well.
Why the other options are wrong
- B) Tying the payment to a completed sale makes it a commission, which only a licensed person may receive; the sale's completion is exactly what triggers the prohibition.
- C) An absolute ban overstates the rule; ORC 3905.181 expressly permits a fixed dollar referral fee that does not hinge on whether the sale happens.
- D) Dollar size is not the test; any sale-dependent payment is a commission and may go only to a licensed person, no matter how small the amount.
Memory hook
Referral fee yes — but flat and sale-proof, never a commission cut.