Are surplus lines brokers permitted to share commissions with unlicensed agents?

Surplus lines brokers are prohibited from sharing commissions with unlicensed individuals to maintain the integrity of the licensing system and ensure consumer protection. This regulation is in place to prevent unauthorized individuals from participating in the insurance transaction process, which could lead to ethical concerns and malpractice. The licensing requirements are designed to ensure that only qualified and trained individuals handle insurance operations, and allowing unlicensed individuals to earn commissions could undermine this framework. In New Jersey, like many other states, strict rules govern the sharing of commissions to safeguard consumers and ensure that all parties engaged in the insurance transaction are properly licensed and held accountable for their actions. This necessity for licensing helps maintain industry standards and fosters trust within the insurance market.