State RegulationsCO specificDifficulty 2/5
A Colorado producer tells a competing agency's producer: "Stop writing policies in this county, or our company will cut off the overflow referrals you depend on." Under Colorado's unfair trade practices, this threat is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
C.R.S. § 10-3-1104(1)(d) prohibits coercion: using force, threats, or intimidation to compel another person to act or refrain from acting in the insurance business. Conditioning a competitor's referral flow on abandoning a territory is a classic coercive threat, and it is prohibited even though no physical force is involved and no money changes hands.
Why the other options are wrong
- A) Threatening retaliation to control a competitor's conduct is not competition; it is coercion under part 11 of article 3.
- B) No premium, dividend, or contract benefit is being returned to an insured, so the anti-rebating rule is not implicated.
- C) Defamation requires a false or maliciously critical statement about financial condition; a threat of business retaliation is coercion instead.
Memory hook
Threats that steer business are coercion — no fists required.