State RegulationsCO specificDifficulty 2/5
A Colorado producer writes most of his premium on close family members and on employees of his own company. Under C.R.S. § 10-2-401(4) and (5), his producer license is deemed misused if, during any 12-month period:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-2-401(4) and (5) treat a license as misused when, during any 12-month period, the aggregate premiums on controlled business exceed the aggregate premiums on all other business of the licensee. Some controlled business is lawful in Colorado; letting it dominate the book is what triggers the misuse finding by the Commissioner.
Why the other options are wrong
- A) Controlled business is not banned outright; only the excess over all other business triggers the misuse finding.
- C) The violation occurs when controlled business is greater than, not smaller than, the rest of the book.
- D) Collecting commission on lawful controlled business is not itself the misuse trigger; the premium comparison is.
Memory hook
Self-business may not out-sell everything else in 12 months.