State RegulationsCO specificDifficulty 2/5
A Colorado producer who holds only a life insurance license wants to place a commercial risk with a surplus lines insurer. What is the problem?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
As administered by the Colorado Division of Insurance, surplus lines business requires an active property and casualty license, so a producer holding only the life line cannot place risks with surplus lines insurers. By comparison, variable life products require the life line plus FINRA registration verified through the CRD — each specialty carries its own licensing key.
Why the other options are wrong
- B) A life license does not authorize surplus lines placement; an active property and casualty license is required.
- C) The agency license is a separate credential for business entities and does not substitute for the property and casualty line needed for surplus lines.
- D) Surplus lines placement is not banned in Colorado; it is conditioned on holding the proper license.
Memory hook
Surplus lines runs on the P&C line; variable life adds FINRA.