State RegulationsCO specificDifficulty 2/5
A Boulder resident who never applied for a producer license solicits a life insurance application from a neighbor and accepts the initial premium. Under Colorado law, how should this conduct be characterized?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Soliciting an application and accepting a premium are acts of transacting insurance. Under C.R.S. § 10-3-903 and the unauthorized-entity provisions enforced by the Colorado Division of Insurance, a person must hold a producer license to transact insurance, and unlicensed activity is prohibited and subject to enforcement.
Why the other options are wrong
- A) Receiving no fee does not legalize unlicensed transacting; the prohibition applies regardless of compensation.
- B) The insurer's admitted status does not cure the unlicensed person's own violation.
- C) Later review by a licensed producer cannot retroactively authorize the unlicensed solicitation and premium collection.
Memory hook
No license, no sale — soliciting or taking premiums is transacting.