State RegulationsCO specificDifficulty 2/5
A Denver businesswoman who has never held a Colorado insurance license refers a commercial client to a producer and asks to share the commission on the resulting policy. Under C.R.S. § 10-2-702, the producer may pay her a commission only if she:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
C.R.S. § 10-2-702(1),(2) prohibits paying any commission, service fee, or other valuable consideration to a person for selling, soliciting, or negotiating insurance unless that person was a duly licensed producer at the time the services were performed. Contract paperwork, courses, or referral registrations cannot substitute for holding the license during the period the services were actually rendered.
Why the other options are wrong
- A) Reg. 1-2-9 and C.R.S. § 10-2-702 provide no referral-registration mechanism that legitimizes paying an unlicensed person.
- B) Completing a course does not authorize commissions; only licensure at the time of the services satisfies C.R.S. § 10-2-702.
- C) A contractor agreement cannot override C.R.S. § 10-2-702; the licensing requirement attaches to the activity, not the paperwork.
Memory hook
No license at signing time, no commission — ever.