Which of the following is true about commission sharing between producers?

Commission sharing between producers is typically appropriate and permissible when it occurs between licensed individuals. This aligns with regulatory standards meant to ensure that all parties involved in the transaction possess the necessary qualifications and licenses to perform their duties in the insurance industry or related fields. Sharing commissions helps foster collaboration and can lead to improved client service when both parties are compliant with legal requirements.

In contrast, sharing commissions among individuals who are not licensed can lead to legal complications and potential violations of state regulations designed to protect consumers and maintain industry standards. This emphasizes the necessity of ensuring that commission sharing only occurs among those who have the proper credentials.