What mandatory payments are calculated as a percentage of the total premium of an insurance policy?

The correct answer identifies taxes as the mandatory payments calculated as a percentage of the total premium of an insurance policy. In the context of insurance, taxes are typically imposed by state and local governments as a way to generate revenue. These taxes can include a variety of fees such as premium taxes, which are applied based on the premium amount that the policyholder pays.

For example, in Arizona and many other states, insurance companies must pay a premium tax on the premiums collected from policyholders. This tax is assessed as a percentage of the total premium, which means that the higher the premium, the higher the tax amount.

Other options, while they may involve costs associated with insurance, do not function as mandatory payments based on a percentage of the premium itself. Licensing fees are usually fixed charges required for insurance professionals to operate legally and do not vary with the policy premium. Broker commissions are payments made to brokers for selling insurance and are typically calculated based on the premium, but they are not mandatory payments; rather, they are negotiated and can vary. Compliance charges also do not pertain to a percentage calculation based on the premium but refer to costs associated with adhering to regulations.

Thus, taxes are the only payments listed that are calculated as a percentage of the insurance premium