Which statement correctly describes how Georgia regulates controlled business - insurance written primarily on a producer's own life, property, or interests?

Why B is correct

Georgia imposes no numeric percentage limit on controlled business. Instead, under the Georgia Insurance Code's controlled-business rules, a license will not be granted or continued when its primary purpose is writing insurance on the interests of the licensee or the licensee's business. The practical test is why the license exists, not how much of the producer's volume is self-placed. The Insurance Commissioner applies this purpose test when granting and continuing licenses.

Why the other options are wrong

• A) Georgia deliberately avoids a percentage cap; the controlling standard is the primary purpose of the license, not a share of production.
• C) There is no first-year grace period; the primary-purpose test applies to granting and continuing the license at any time.
• D) No special endorsement exists; controlled business is policed through the license-granting and continuation standard itself.

Memory hook

No percentage cap in Georgia - the 'primary purpose' test rules.

Why B is correct

Under Georgia insurance law, a license will not be granted when the primary purpose is to write the licensee's own interests. The Commissioner examines the purpose behind the application, and a license sought chiefly to cover the applicant's own business is a controlled business license that may lawfully be denied by the Insurance Commissioner.

Why the other options are wrong

• A) Georgia does address controlled business; while no percentage cap exists, a license held primarily for the licensee's own interests may be denied or not continued.
• C) No special course exists as a cure; the statutory test is the primary purpose of the license.
• D) A temporary license under O.C.G.A. § 33-23-13 is tied to situations such as agent death, disability, or termination, not controlled business denials.

Memory hook

A license is for selling to the public, not to yourself — primary purpose is the Commissioner's test.

Why C is correct

Under O.C.G.A. § 33-23-1, Georgia permits controlled business and, unlike some jurisdictions, sets no numeric percentage limit on it. The statutory control is the primary-purpose test: a license will not be granted or continued if its primary purpose is writing controlled business. The practical consequence is that a producer may insure his own and his associates' interests freely, as long as the license is genuinely intended for a broader agency operation.

Why the other options are wrong

• A) Controlled business is not prohibited; Georgia allows it and regulates it through the primary-purpose licensing standard.
• B) There is no probationary or initial-period rule; the primary-purpose test applies throughout the life of the license.
• D) The rule is not tied to employment by a single insurer; it applies to all licensees regardless of insurer affiliations.

Memory hook

Georgia's controlled-business test is a purpose test, not a percentage test.