State RegulationsCO specificDifficulty 1/5
Which practice does C.R.S. § 10-2-704 prohibit for a Colorado producer who holds premium funds?
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
C.R.S. § 10-2-704(3) flatly prohibits commingling premium funds with personal funds, because premiums are held in a fiduciary capacity under § 10-2-704(1) and belong to the transaction, not the producer. Commingling is one of the fastest routes to Division of Insurance discipline for a Colorado licensee, since it obscures whose money is whose. The compliant pattern is a dedicated fiduciary account with clean records, so every dollar of client premium can be traced to remittance or refund.
Why the other options are wrong
- A) A fiduciary account is consistent with the duty to hold premiums separately; commingling with personal funds is the prohibited act.
- B) Early remittance harms no one and violates nothing; the deadlines are ceilings, not floors.
- D) Separate records support compliance with the fiduciary duty rather than breaching it.
Memory hook
Client money and your money never share an account.