A producer in Denver recommends a life policy that pays him the highest first-year commission, even though a lower-cost policy better fits the client's stated needs and budget. Under the suitability standards administered by the Colorado Division of Insurance, which duty has the producer failed?

Why B is correct

Colorado's suitability standards, administered by the Colorado Division of Insurance, require a producer to have a reasonable basis for believing the product recommended fits the applicant's needs and financial objectives. Steering a client toward a product that enriches the producer rather than serving the client violates that duty and exposes the producer to Division discipline.

Why the other options are wrong

• A) Colorado suitability standards do not condition a recommendation on obtaining advance written consent from the client; the duty concerns the basis for the recommendation itself.
• C) No producer can or must guarantee a policy will never lapse; suitability concerns the fit of the recommendation, not future performance guarantees.
• D) Suitability requires tailoring the recommendation to each client; offering everyone the producer's own policy is the opposite of a needs-based approach.

Memory hook

Suit the product to the person, not the producer's pocket.