State RegulationsCO specificDifficulty 1/5
A fraternal benefit society wants its officers to place limited life coverage on members without triggering Colorado producer licensing requirements. Under C.R.S. § 10-2-401(3)(b), what is the maximum face amount of life insurance that may be written under this exemption when no compensation is paid?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-2-401(3)(b) exempts from producer licensing the writing of life insurance not exceeding $50,000 in face amount, or other insurance on not more than 25 individuals, when no compensation is paid. This carve-out covers limited fraternal and courtesy transactions that fall outside the licensed market.
Why the other options are wrong
- A) The exemption extends to $50,000 of life coverage, so a $10,000 ceiling understates the statutory limit.
- B) The statutory figure is $50,000 of face amount; $20,000 does not appear in the exemption.
- D) Thirty thousand dollars is the aggregate penalty cap of C.R.S. § 10-3-1108(1)(a), unrelated to the fraternal exemption.
Memory hook
Fraternal freebie: $50,000 of life or 25 lives, zero pay.