An agency owner in Mesa closes a life insurance sale and wants to pay a commission bonus to the unlicensed receptionist who set the appointments. Under A.R.S. 20-298, what is the lawful treatment of the commission?

Why D is correct

A.R.S. 20-298 provides that commissions may be paid only to producers licensed for the applicable line of authority. An unlicensed employee may support the agency in salaried ways, but a commission for the sale itself may go only to an individually licensed producer.

Why the other options are wrong

• A) Contribution to the sale does not matter; A.R.S. 20-298 conditions commission payment on licensure.
• B) Insurer approval cannot override the licensing requirement of A.R.S. 20-298.
• C) Tax reporting does not cure payment of a selling commission to an unlicensed person.

Memory hook

No license, no commission — A.R.S. 20-298 pays only the licensed.

Why C is correct

Under A.R.S. 20-298, commissions for the sale of insurance may be paid only to licensed producers. An unlicensed employee may support the business in clerical ways, but paying that person a share of a selling commission would violate the statute regardless of internal consent, supervision, or payment routing.

Why the other options are wrong

• A) Wrong because insurer consent cannot override A.R.S. 20-298; the prohibition on paying commissions to unlicensed persons is statutory.
• B) Wrong because working under a licensed producer's supervision does not license the employee; A.R.S. 20-298 still bars paying the commission to an unlicensed person.
• D) Wrong because routing the payment through the business entity does not change the analysis; the commission for selling may go only to a licensed producer.

Memory hook

No license, no commission — 20-298 pays producers only.