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Roberto is a licensed life insurance agent, and he has a deal with his friend Kelly-Anne, a real estate agent, that he gives her a portion of his commission for any sale he makes to one of the many clients she refers. This arrangement is known as which of the following?

a. Inducing to insure
b. Premium rebating
c. Referral arrangement
d. Commission sharing

1 Answer

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Final answer:

The agreement in which Roberto gives Kelly-Anne a portion of his commission for referrals is known as Commission sharing. It's a common practice in some industries but must adhere to legal and ethical standards.

Step-by-step explanation:

The arrangement between Roberto, a licensed life insurance agent, and his friend Kelly-Anne, a real estate agent, where he gives her a portion of his commission for sales made to clients she refers, can be described as Commission sharing. This is a business practice where professionals share parts of their commissions as a reward for referrals. It's important to note that while commission sharing might be legal in some industries, it must comply with the applicable laws and regulations governing each professional's industry, as it may be considered illegal or unethical in others. Therefore, Roberto and Kelly-Anne should ensure their arrangement adheres to the compliance and regulatory standards of their respective industries.

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