State RegulationsCO specificDifficulty 3/5
In connection with insurance that a Colorado lender requires a debtor to obtain, which practice does C.R.S. § 10-3-1105 expressly prohibit?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Along with barring required insurer or agent designations, C.R.S. § 10-3-1105 prohibits imposing a separate handling charge on the debtor for insurance required in connection with the loan. Requiring genuine proof of coverage or placement with an admitted insurer, and allowing premium payments through the lender, are ordinary practices the statute does not condemn.
Why the other options are wrong
- A) Placement with an admitted Colorado insurer is entirely proper; the statute targets required specific sources and extra charges, not admitted placement.
- B) Collecting premiums through the lender is a convenience, not a prohibited handling charge.
- D) Proof that required coverage is in force is a legitimate condition of a secured loan.
Memory hook
Required insurance is fine — an extra 'handling' fee on it is not.