What requirement must be met for first year commissions to be legally paid?

To receive first-year commissions legally in New Jersey, it is essential for an individual to hold a valid state license and an appointment with the insurer that is disbursing the commission. This requirement ensures that the agent is recognized and authorized to conduct business on behalf of the insurer, which is a critical element of regulatory compliance within the insurance industry. Holding a state license signifies that the agent has met the necessary educational and examination standards required by the state to operate in that capacity. Additionally, being appointed by the insurer means the agent has a formal agreement that allows them to sell the insurer's policies and earn commissions for those sales, making it a prerequisite for commission payment. Meeting both of these criteria protects consumers and maintains industry standards by ensuring that agents are representing licensed and approved companies.