PLPennsylvaniamedium
A Pennsylvania producer plans to accept compensation from a personal-lines customer beyond the standard commission paid by the insurer. What must the producer do under PA law?
ANothing — additional fees from the customer are presumed lawful under PA insurance law without any disclosure requirement
Obtain the customer's written acknowledgment of the compensation arrangement before placing coverage
CNotify the insurer only after the policy is bound
DSplit the additional fee 50/50 with the insurer
Why this is the answer
40 P.S. § 310.47 requires a producer who receives compensation from a customer (separate from insurer-paid commission) to obtain the customer's documented acknowledgment of that compensation arrangement prior to placement. The disclosure must identify the amount or basis of the fee and confirm the customer understands it is in addition to or in lieu of commissions. Failure to make the disclosure is a license violation.
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