State RegulationsCO specificDifficulty 2/5
A Colorado producer solicits and negotiates a life insurance application for a client in Boulder, and a dispute later arises between the client and the insurer over the underwriting outcome. Under C.R.S. § 10-2-401(1), for whom does the producer legally act in the controversy?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-2-401(1) provides that a producer who solicits or negotiates an application represents the insurer — not the insured or the beneficiary — in any controversy. Colorado fixes this alignment by statute regardless of who pays the commission or how close the producer feels to the client. The practical effect is that a Colorado producer's advice during solicitation carries the insurer's legal position, and clients should understand that the producer is the insurer's agent for purposes of the application.
Why the other options are wrong
- A) Premium collection does not change the representation rule; the statute assigns the producer to the insurer regardless of the money flow.
- B) The statute expressly excludes the beneficiary from the producer's representation.
- D) Colorado law does not leave the producer neutral; § 10-2-401(1) fixes the producer on the insurer's side in any controversy.
Memory hook
The producer who solicits the application stands with the insurer, even in a fight.