Under what condition can a producer share a commission with an unlicensed person?

The correct answer is that a producer may share a commission with an unlicensed person if the unlicensed person held a valid license at the time of the sale. This means that if the individual was properly licensed during the transaction, they had met the regulatory requirements to receive commissions from insurance sales.

In the context of insurance regulations, commission sharing rules are in place to maintain the integrity of the insurance industry and ensure that only individuals who are properly licensed can earn commissions. When an unlicensed person has previously held a license, it signifies that they have undergone the necessary training and have awareness of the industry standards, making it acceptable to share commissions under such circumstances.

The other answers outline various scenarios that do not meet the legal requirements set by regulatory authorities. For example, merely having a referral agreement or obtaining written consent from the insurer does not constitute a justifiable reason under Pennsylvania law to share commissions with someone who is not currently licensed, nor does being a relative imply any legal allowance for such sharing. Understanding these regulations helps maintain professionalism and compliance within the insurance field.