State RegulationsCO specificDifficulty 2/5
A producer in Aurora tells a life policyowner that the owner's current policy has no meaningful cash values, so the owner lets it lapse and buys a replacement policy from the producer. Under C.R.S. § 10-3-1104(1)(a), this conduct is an example of:
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 D is correct
C.R.S. § 10-3-1104(1)(a) prohibits misrepresenting the terms of any policy to induce a policyholder to lapse, forfeit, exchange, convert, or surrender it — the Colorado twisting hook. The false cash-value statement used to kill the existing policy and sell the replacement fits that prohibition exactly, and the replacement regulations add their own disclosure duties.
Why the other options are wrong
- A) Defamation concerns false statements about an insurer's financial condition, not misstatements used to induce a replacement.
- B) The producer returned nothing of value to the owner, so there is no rebate.
- C) There is no loan or debtor relationship here, so the coercion-of-debtors statute does not apply.
Memory hook
Twisting twists the truth until the old policy dies.