State RegulationsCO specificDifficulty 2/5
A Colorado producer writes almost all of his business on his own life, his family, and his own company. Over a 12-month period, the premiums on that controlled business exceed the premiums on all of his other business combined. Under C.R.S. § 10-2-401(4), the consequence is that:
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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(4),(5) deems a producer's license misused when, during any 12-month period, the aggregate premiums on controlled business exceed the aggregate premiums on all of the licensee's other business. The deemed misuse exposes the producer to disciplinary action by the Colorado Commissioner of Insurance.
Why the other options are wrong
- A) Colorado law provides no commission-return remedy for controlled business; the license status is what the statute addresses.
- C) The policies themselves remain valid; it is the producer's license that is implicated.
- D) The statute deems the license misused once the threshold is crossed; no advance written warning is a prerequisite.
Memory hook
When your own business outsells everyone else, the license is on trial.