The producer is giving insurance advice regarding a prospect's existing coverage. If Jay were to receive a fee for this advice, he MUST:

In New Jersey, when an insurance producer provides advice about a prospect's existing coverage and receives a fee for that advice, it is essential to have legal and ethical documentation in place. Obtaining a signed memorandum from the prospect serves several critical purposes: it formalizes the agreement between the producer and the prospect, outlines the scope of the advice provided, and ensures that both parties are clear on the terms under which the advice was given and the fee collected.

This process helps protect both the producer and the prospect, ensuring transparency and accountability in the transaction. It demonstrates that the prospect understands and consents to the fee arrangement, which is crucial for compliance with state regulations governing the conduct of insurance producers.

The other options do not fulfill the requirements laid out by New Jersey law for fee arrangements related to insurance advice. For instance, providing a discount on the policy may not be relevant to the fee structure and does not substitute the need for documented consent. Notifying the insurance company may not be a necessary step in this context unless it affects the producer's contractual obligations, and refraining from collecting other fees doesn't address the specific requirement for documentation when charging for advice. Thus, having a signed memorandum is the correct and necessary step to comply with legal obligations in this scenario.