State RegulationsCO specificDifficulty 2/5
During a 12-month period, a Colorado producer's aggregate premiums on policies sold to his own spouse and his own business exceed the aggregate premiums on all of his other business. Under C.R.S. § 10-2-401(4), what is the consequence?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under C.R.S. § 10-2-401(4),(5), a Colorado producer's license is deemed misused if, during any 12-month period, the aggregate premiums on controlled business — such as policies on the producer's spouse or own business — exceed the aggregate premiums on all other business of the licensee. The statute targets producers who use the license mainly for their own accounts.
Why the other options are wrong
- A) The statute does not order surrender of commissions; the consequence is that the license is deemed misused.
- C) Family and business relationships do not exempt the producer from the controlled-business limits.
- D) Cancellation of the producer's other policies is not the statutory consequence of exceeding the controlled-business share.
Memory hook
Family business beating the book? License deemed misused.