State RegulationsCO specificDifficulty 2/5
A producer in Boulder offers a client a new television if she switches her health coverage to the producer's recommended carrier. Under Colorado law, this offer is:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
C.R.S. § 10-3-1104(1)(g) bars offering any valuable consideration not specified in the policy as an inducement to purchase. A merchandise gift tied to switching carriers is classic illegal rebating; disclosure, the identity of the payer, and timing do not legalize it, because the rule keeps every Colorado applicant competing on equal terms.
Why the other options are wrong
- B) Disclosure on the application does not matter; the statute prohibits the inducement itself, not a hidden one.
- C) It is irrelevant who funds the gift — rebating by a producer is prohibited just as rebating by an insurer is.
- D) The free-look period is a cancellation right and provides no safe harbor for an unlawful inducement.
Memory hook
No TVs for switching — inducements beyond the contract are rebates.