State RegulationsCO specificDifficulty 2/5
A Colorado producer concentrates on selling policies to the producer's own family and business associates. Under C.R.S. § 10-2-401, the license is deemed misused for controlled business if, during any 12-month period, the controlled-business premiums:
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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(4) and (5) deem the license misused if, during any 12-month period, the aggregate premiums on controlled business exceed the aggregate premiums on all other business of the licensee. Controlled business — insurance on the licensee's own life, family, employees, or business associates — must remain the minority of the producer's book.
Why the other options are wrong
- A) The controlled-business test is a proportional comparison to the producer's other business, not a fixed dollar threshold.
- B) The 25-individual figure relates to the fraternal exemption from licensure, not to the controlled-business misuse test.
- D) Falling below the other business is exactly the safe condition; misuse occurs only when controlled business exceeds everything else.
Memory hook
Controlled business must stay the minority — over half of your 12-month book is misuse.