How are agent commissions structured according to disclosure requirements?

Agent commissions must be fully disclosed, including total compensation, to ensure transparency and maintain consumer trust in the insurance industry. This requirement is grounded in the principle that policyholders deserve to understand how much their agents will earn from the policies they are purchasing. Complete disclosure helps clients make informed decisions and strengthens the integrity of the sales process.

While other options suggest limitations or exceptions—such as disclosing commissions only for new policies, exempting small premiums, or limiting disclosure to individual policy commissions—none of them align with the comprehensive obligation placed on agents to convey all forms of compensation. Therefore, the correct choice emphasizes the necessity of overall transparency regarding compensation structures, fostering clarity and trust within the insurance marketplace.