Which action is considered illegal in relation to sharing commissions?

The action that is considered illegal in relation to sharing commissions is offering commissions to individuals without a license. In the context of crop insurance and similar fields, only those who have the appropriate licensing can legally receive compensation for selling or promoting insurance products. This licensing ensures that individuals are knowledgeable and compliant with regulations designed to protect consumers and maintain the integrity of the industry.

Incentivizing agents based on performance, paying commissions to licensed agents, and sharing earnings with policyholders are generally permissible practices within the industry, provided they adhere to the existing laws and regulations governing insurance practices. Licensed agents have met specific qualifications that allow them to engage in commission structures, while also ensuring that the interests of policyholders are safeguarded. Therefore, the legality of commission-sharing heavily relies on whether the individuals involved hold the necessary licenses to operate in that capacity.