State RegulationsCO specificDifficulty 2/5
A licensed Colorado producer has an unlicensed friend solicit a life insurance application from a client in Aurora, then wants to share the commission. Under C.R.S. § 10-2-702, may the producer pay the friend for the solicitation?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-2-702(1) and (2) prohibit paying any commission, service fee, or other valuable consideration to a person for selling, soliciting, or negotiating insurance unless that person was a duly licensed producer at the time the services were performed. Paying an unlicensed person for solicitation violates the statute, and the timing rule looks to licensure when the work was done, not afterward.
Why the other options are wrong
- A) Later passage of the examination does not cure the violation; C.R.S. § 10-2-702 requires licensure at the time the services were performed.
- C) A producer's license does not extend to unlicensed coworkers or friends; each person paid for selling, soliciting, or negotiating must be licensed.
- D) Client consent is irrelevant under C.R.S. § 10-2-702; the statute protects the licensing system, not the client's approval of fee arrangements.
Memory hook
No license, no commission — licensed when the work was done.