State RegulationsCO specificDifficulty 2/5
A business owner in Aurora asks licensed producer Ryan Tallow to place its employee benefit plan with an insurer that holds no Colorado license from the Division of Insurance. What should Ryan do?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. 10-3-903 and the related unauthorized-entity provisions continuing through 10-3-904.5 prohibit transacting insurance in Colorado without Division of Insurance authority. A producer who places business with an unauthorized entity participates in unlawful activity; the placement must not be made, and the Division is the body that determines whether an entity is authorized to transact insurance.
Why the other options are wrong
- A) Out-of-state licensure does not authorize an insurer to transact business in Colorado; Division of Insurance authorization is required.
- C) A private waiver cannot cure the lack of statutory authority; the prohibition is imposed by statute, not by contract.
- D) Reporting after the fact does not authorize the placement; the transaction itself with an unauthorized entity is prohibited.
Memory hook
No Colorado license, no Colorado sale - check Division authority first.