Final answer:
Unlicensed employees in the insurance industry are prohibited from receiving compensation based on the volume of business generated, such as percentages of premiums or commissions. The only permissible payment would be none, meaning no referral fees can be paid to them.
Step-by-step explanation:
The subject of this question revolves around the payment of referral fees to an unlicensed employee in the insurance industry. According to most insurance laws and regulations, unlicensed employees are generally not permitted to receive compensation based on the volume of business generated, which would include a percentage of the premium, a commission, or any other form of variable compensation that depends on the amount or success of the policies sold.
Therefore, the correct answer is D) No compensation can be paid to unlicensed employees for referrals. This is because referral fees that vary with the amount of business generated could be construed as engaging in the business of insurance without a license, which is typically not allowed. A flat fee for each successful referral could also be seen as compensation based on business generated and is usually not allowed for unlicensed individuals.