State RegulationsGA specificDifficulty 2/5
Which statement correctly describes how Georgia regulates controlled business - insurance written primarily on a producer's own life, property, or interests?
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Answer & full 3-part explanation (select an option above, or peek)
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.