April 23, 2018

Commissioned Insurance Agents: Is your agent honest?

Commissioned Insurance Agents.

While the sale of insurance is typically based on commission payments to the selling agent, commissions can create a conflict of interest in the sale of an insurance policy.  How so?  Well, an unethical agent can simply choose to sell insurance products that offer the highest commission payments, rather than selling insurance products that are in the best interest of clients.

And sometimes, the thirst for commission payments leads to criminal activity.  Click here for a recent press release from the California Department of Insurance about a criminal scam run by former insurance agents.  The insurance agents fraudulently collected $1.9 million in upfront commission payments when they submitted bogus life insurance applications to insurance companies.

As an aside, the lingering question I have about this matter is:  How did the insurance companies that received the bogus applications allow this matter to happen?  Nothing is said in the press release about insurance company involvement in this criminal matter.

About Mary Rae Fouts, EA

Insurance questions?  Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information visit FoutsFinancialGroup.com.

Mary Rae Fouts


  1. how do I find out how much commission my insurance broker earns?

    1. There are some exceptions, but in general, commissioned insurance agents are not - required - to disclose the amount of commission earned on the sale of an insurance product. If your agent does not voluntarily disclose the commission amount he/she earned on the sale, you can always ask the agent for the information. Whether or not the commission amount will be provided to you is another story.


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