The government has no business dictating how insurance agents and brokers get paid. Quite simply, attorneys general, insurance-industry executives and self-proclaimed consumer advocates who want to modify compensation for insurance agents and brokers don't know what they are talking about.
The insurance industry pays upfront commissions and year-end bonuses—also called contingent commissions—in about the same way as other industries do. Judged by its practical applications and consequences for consumers, this combination of commission types does a good job aligning the interests of those who sell insurance and those who buy it.
Some basics on the controversy first: One can buy insurance through either an agent or a broker. Both agents and brokers pass similar exams, provide advice and guidance about insurance purchases, and help match consumers with insurers. But they get paid differently.
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