State RegulationsCO specificDifficulty 1/5
During a sales presentation, a Colorado producer falsely tells an applicant that a competing insurer is insolvent in order to close the sale of a replacement policy. Under C.R.S. § 10-3-1104(1)(a), the producer has engaged in:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
C.R.S. § 10-3-1104(1)(a) includes making false statements about the financial condition of any insurer for the purpose of inducing the purchase of insurance. Telling an applicant a solvent competitor is insolvent to close a sale is precisely that misrepresentation, and it exposes the producer to penalties under part 11 of article 3 of title 10.
Why the other options are wrong
- A) The producer gave nothing of value back to the applicant, so the rebate prohibition is not implicated.
- B) Controlled business concerns insurance written on the producer's own or related interests, not false statements about competitors.
- C) Unfair claim settlement practices govern the handling of claims after losses, not sales presentations.
Memory hook
Lies about solvency sell nothing but trouble.