Which statement about commissions for a Medicare supplement policy is FALSE?

The correct answer highlights that first-year commissions for a Medicare supplement policy can exceed 200 percent of renewal commissions, which is indeed a false statement. In the context of insurance commissions, particularly for Medicare supplements, the commissions are typically structured to ensure that the compensation for the first year is not excessively high compared to subsequent renewals.

This provision exists to maintain fair practices within the industry and to discourage agents from pushing clients into new policies solely for the sake of earning higher initial commissions. Instead, the focus balances compensation over time, ensuring agents also have a vested interest in the ongoing relationship with their clients.

Recognizing that this specific ratio of first-year to renewal commissions is regulated helps to protect consumers and ensures that agents maintain a level of service beyond the initial sale. Other statements about compensation arrangements in the context of Medicare supplement policies accurately reflect the regulations and practices that are designed to ensure ethical and responsible behavior within the industry. The correct answer emphasizes the structured nature of commissions and the importance of maintaining industry standards.