State RegulationsCO specificDifficulty 1/5
Under the Colorado Division of Insurance's suitability requirements, a producer's recommendation of a life insurance or annuity product must be based primarily on which of the following?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Colorado's suitability requirements, administered by the Colorado Division of Insurance, center the recommendation on the customer: the producer must base it on information about the customer's financial situation, insurance needs, and objectives, gathered through reasonable efforts before the sale.
Why the other options are wrong
- A) The producer's commission may not drive the recommendation; that is precisely what suitability rules guard against.
- B) Insurer sales targets have no place in a suitability determination.
- C) The producer's personal preference for a product is not a suitability standard.
Memory hook
Suitability = client's situation, needs, objectives.