Insurance producers can make a charitable contribution to a bona fide charitable or nonprofit organization from commissions or fees under certain conditions. The contribution can't be with an agreement that the recipient will try to obtain insurance from the producer, refer business to them or endorse the producer or an insurance product. Certain conditions apply:
- An insured or prospective insured cannot direct which organization receives the contribution.
- The contribution cannot be made in the name of an insured or prospective insured.
- An insured or prospective insured must not become entitled to a tax benefit as a result of the contribution.
- An insured or prospective insured cannot influence selection of the person that receives benefits from the organization.
The producer may also sponsor events for such an organization. The contribution or sponsorship must not be conditioned upon a person who is affiliated or interested in the organization applying or obtaining insurance through the producer.
1. A insurance producer donates their commission to a charity in the name of someone they sold insurance to.
This is not permitted.
2. An insurance producer sponsors an event for the American Cancer Society by donating funds to the Society.
This is permitted.