Which term describes insuring family members to receive a commission and is limited to 15% of the agent's premium in a 12-month period?

• A. Controlled Business
• B. Rebating
• C. Bartering
• D. Essential Insurance Act

Answer: (A)

Controlled business is when an agent writes insurance on themselves or their family members to earn commissions. Regulators cap this practice to prevent agents from relying on relatives or close associates for most of their business. In this context, the limit of 15% of the agent’s written premium in a 12-month period is the regulatory guardrail that keeps the practice in check. That’s why insuring family members to receive a commission within that 15% cap fits this term.

Rebating would involve giving some portion of the premium or other inducements to the buyer to influence a purchase, not specifically about writing policies on family members. Bartering refers to exchanging goods or services instead of money. The Essential Insurance Act is a piece of legislation, not the specific term for this practice.