State RegulationsCO specificDifficulty 3/5
Which payment is permitted under C.R.S. § 10-2-702 even though the recipient is not an actively licensed producer?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-2-702 carves out exceptions to the licensed-producer payment rule: renewal or deferred commissions may be paid to persons entitled to them, an assignment may be made to the producer's own partnership or corporation, and entities that do not themselves sell, solicit, or negotiate insurance may receive compensation. The prohibition targets payment for the licensed activities themselves.
Why the other options are wrong
- A) Negotiating an application is a licensed activity, so paying an unlicensed person for it violates C.R.S. § 10-2-702.
- B) Soliciting a new policy is a licensed activity; the renewal and deferred-commission exception does not cover a first commission for new solicitation by an unlicensed person.
- D) Paying an unlicensed employee for referrals tied to the sale of insurance is valuable consideration not authorized by C.R.S. § 10-2-702.
Memory hook
Renewals, deferreds, and non-selling entities can be paid; solicitors cannot.