State RegulationsCO specificDifficulty 1/5
Which of the following best describes "controlled business" under C.R.S. § 10-2-401(4)?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under C.R.S. § 10-2-401(4), controlled business is insurance written on risks the producer effectively controls: the producer's own life or property and the lives or property of close associates such as family or employees. The concern is that the producer controls the purchase decision rather than serving an arm's-length client, which is why the statute watches its share of the producer's book.
Why the other options are wrong
- B) Representing multiple insurers is ordinary independent production, not controlled business.
- C) A client's shopping history has no bearing on the definition; control by the producer is the trigger.
- D) A large commercial account is an arm's-length client relationship, not the producer's own controlled risk.
Memory hook
Controlled business = you, yours, and the people who take your word at the dinner table.