State RegulationsCO specificDifficulty 2/5
An Aurora producer writes a large volume of coverage on his own business, his spouse's business, and his employees. Under C.R.S. § 10-2-401(4) and (5), when is a producer's license deemed misused as to controlled business?
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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 the license as misused when, during any 12-month period, the aggregate premium on controlled business exceeds the aggregate premium on all of the licensee's other business. Writing controlled business is lawful in Colorado; the statute polices only the proportion, measured over a 12-month span.
Why the other options are wrong
- A) Controlled business is permitted; only the statutory premium proportion, not its mere existence, triggers misuse.
- C) The test is whether controlled-business premiums exceed all other premiums, not a fixed 85% ratio.
- D) The measurement period is 12 months, not 24 months, under C.R.S. § 10-2-401(4) and (5).
Memory hook
Controlled business must stay the minority over 12 months.