sale of credit life and GAP insurance

Hi,
Our bank sells credit protection and gap insurance on consumer non-RE loans and pays incentive to employees based on % of the insurance premium of consumer loans. The insurance is voluntary, not a requirement (condition) of a loan.
Does anyone can share is there any state limitations on the incentive paid on gap and credit life insurance ?
Thank you very much in advance!

In all 50 States? In some states, I believe if they are not licensed, they cannot receive income. You also need really tight controls as if the officers are getting a cut, likely proving this is voluntary is going to be questionable. You better be monitoring your penetration rates, surrogate monitoring for gender and race, etc. per loan officer very carefully. Most banks quit this practice a long time ago due to potential abuse of borrowers.

Voluntary but you pay your employees a percentage. Boy, I wouldn't want to try to defend a UDAAP claim with those facts.

Thank you, ricarey!
We are a Texas state member bank. I referred to State of Texas rule.
I searched at the federal level regulations, I did not find anything so I am wondering if there is any limitation/requirements at the State level.
Thank you again for the additional info regarding monitoring process. All consumer loans are centralized in consumer lending department. We provided all required disclosures. I will dig into for the penetration and other prohibited basis.

Have you talked to your legal counsel about this? You need to be looking at the Texas Department of Insurance: https://www.tdi.texas.gov/agent/specialty-credit-apply.html

I am not sure that you can pay non-licensed individuals in Texas for actual sales of insurance.

Thank you, rlcarey! I will talk to our legal.