State RegulationsCO specificDifficulty 2/5
The Colorado Division of Insurance learns that an entity holding no Colorado insurance license has been transacting insurance in the state. What is the legal status of that activity?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Colorado's unauthorized-entity provisions (C.R.S. § 10-3-903 through 10-3-904.5) prohibit transacting insurance in Colorado without authorization from the Colorado Division of Insurance. Policies placed by an unauthorized entity lack the protections the Division enforces, and the Commissioner of Insurance may act against the entity and against any producer who assists it.
Why the other options are wrong
- A) Registering with the Secretary of State creates a business entity but is not insurance authorization.
- B) Colorado law contains no small-volume exception; any unlicensed transacting of insurance is prohibited.
- D) A license issued by another state does not authorize the entity to transact insurance in Colorado.
Memory hook
No Colorado certificate of authority, no Colorado insurance business.