State RegulationsCO specificDifficulty 2/5
A member of a fraternal benefit society wants to sell the society's coverage to fellow members without obtaining a producer license. Under C.R.S. § 10-2-401(3)(b), this is permitted if no compensation is paid and the coverage does not exceed:
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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(3)(b) exempts from licensing the sale of life insurance by a fraternal benefit society member where the face amount does not exceed $50,000, or other insurance on not more than 25 individuals, provided the member receives no compensation. The exemption balances fraternal mutual aid against the state's interest in licensing commercial solicitation.
Why the other options are wrong
- A) $10,000 understates the statutory limit; C.R.S. § 10-2-401(3)(b) sets the life face-amount ceiling at $50,000.
- C) $20,000 is not the statutory figure; the fraternal exemption uses a $50,000 face-amount ceiling.
- D) The limit on other insurance is 25 individuals under C.R.S. § 10-2-401(3)(b), not 50.
Memory hook
Fraternal ceiling: 50 thousand on lives, or 25 people on other coverage.