State RegulationsCO specificDifficulty 2/5
For purposes of Colorado's controlled-business rule, which business written by a producer counts as controlled business?
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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 on the producer's own risks and on the risks of closely connected persons — family members, employees, and the producer's own business interests — where the producer effectively controls the purchase decision. The statute caps how far such self-directed sales may dominate the licensee's book of business.
Why the other options are wrong
- B) The buyer's state of residence is irrelevant; controlled business is defined by the producer's relationship to the risk, not geography.
- C) Servicing a policy does not make it controlled; the test is whether the producer controls the insured risk.
- D) An agency distribution structure has no bearing on whether the business is controlled.
Memory hook
Controlled = your own risks, family, employees, and business.