State RegulationsCO specificDifficulty 3/5
Under C.R.S. § 10-2-702, which arrangement is an EXCEPTION to Colorado's rule against paying commissions to unlicensed persons?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
C.R.S. § 10-2-702 carves out renewal and deferred commissions payable to persons entitled to them under the original arrangement, along with assignments to the producer's own partnership or corporation and payments to entities that do not sell, solicit, or negotiate. The logic is that entitlement already vested while the recipient was properly licensed or entitled under the deal. Colorado therefore lets old money owed continue to flow, while any NEW sale activity by an unlicensed person remains uncompensable.
Why the other options are wrong
- B) A bonus for solicitation work performed while unlicensed is exactly the payment the statute forbids; entitlement cannot be created after the fact.
- C) Entitlement must arise from the original commission arrangement, not from a personal relationship with the former producer.
- D) The office manager helped negotiate a new sale while unlicensed, so sharing that commission violates the licensed-at-the-time rule.
Memory hook
Old money owed still flows; new sales to unlicensed hands do not.