From a regulatory perspective, under what condition must insurance producers disclose their compensation?

Insurance producers are always required to disclose their compensation to ensure transparency and maintain trust in the insurance transaction process. This requirement is rooted in regulatory practices designed to protect consumers by providing them with clear information about how their insurance representatives are compensated. Such disclosure allows clients to understand potential conflicts of interest that may arise if a producer's compensation structure depends on the sale of specific policies or products.

The regulation mandates this level of transparency regardless of the producer’s relationship with the insurance company, including whether they are employees or independent agents, and does not depend on clients asking for that information. This proactive approach in communication empowers consumers to make informed decisions regarding their insurance purchases.