When would an insurance broker disclose the amount of commission they were paid by an insurer?

The correct answer highlights that an insurance broker typically discloses the amount of commission they receive from an insurer as a standard business practice, specifically when requested by a commercial client. This approach reflects the principles of transparency and trust that underpin the broker-client relationship. Commercial clients, who often engage in more complex transactions and have greater bargaining power, may want to verify the broker's compensation as part of ensuring that they are receiving an unbiased service.

Recognizing the specifics of client relationships is important; individual clients may not have the same level of concern or need for this information unless they expressly ask for it. Furthermore, not all clients require the same degree of disclosure, making the practice of sharing commission details situational and dependent on the client’s request, particularly in the commercial sector. This approach helps maintain professionalism while addressing the informational needs of the client.

Other options imply broader or unnecessary disclosure of commission information. Automatically providing this information to all clients may create confusion or mistrust, and disclosing it only when legally mandated may not engage the spirit of transparency that clients value. Additionally, stating that disclosure should occur whenever a client asks for more information is too vague and does not align with customary practices in commercial transactions. Thus, the focus on a specific request from a