State RegulationsCO specificDifficulty 2/5
A Colorado producer is offered an extra payment to place a client's coverage with an insurer that is not authorized in Colorado. What does Colorado law require of the producer?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Colorado's unauthorized-entity provisions, including C.R.S. § 10-3-906, a producer may not transact or aid in transacting insurance for an entity that is not authorized in Colorado, regardless of the compensation offered or the client's preference. A producer who assists such an entity violates the statute and faces action by the Colorado Commissioner of Insurance.
Why the other options are wrong
- A) The client's wishes cannot legalize a transaction that Colorado law prohibits outright.
- B) There is no written-notice safe harbor that permits placing business with an unauthorized entity.
- C) The producer's own legal duty applies whether or not the client objects to the unauthorized insurer.
Memory hook
A producer who helps an unauthorized insurer becomes an unauthorized helper.