What conditions must a policy fee meet to be charged by a broker?

A policy fee charged by a broker must be reasonable and explicitly included in the contract to be permissible. This requirement ensures that the fee does not exceed what is considered justifiable for the services provided. By specifying that the fee must be reasonable, it prevents excessive charges that could be deemed unfair or exploitative. Additionally, including the fee in the contract promotes transparency, allowing the policyholder to understand all costs associated with the insurance policy upfront. This fosters trust between the broker and the client while adhering to regulatory standards that protect consumers in the insurance marketplace.

The other options may represent different aspects of fees or charges in insurance transactions, but they do not provide the necessary framework for justifying the broker's policy fee. Understanding the correct parameters for these fees is essential in ensuring compliance with industry regulations.