Is there a cap on the amount of commission brokers can earn per policy?

In the context of the RIBO Act, it is accurate that there is no specific cap on the amount of commission brokers can earn per policy. Instead, the act emphasizes that commissions must be disclosed to clients and be considered reasonable. This framework is designed to promote transparency and ensure that clients are aware of the financial incentives affecting the advice or service they are receiving.

The requirement for reasonable commissions means that brokers need to provide value relative to the commissions they earn, thereby maintaining ethical standards in their practices. It prevents excessive commission structures that might arise if caps were established, which could hinder brokers from competing fairly or providing quality service.

The other options imply restrictions or specific conditions that do not align with the principles of commission structure as outlined in the RIBO Act. Understanding this framework helps brokers operate within legal boundaries while addressing the needs of their clients effectively.