State RegulationsCO specificDifficulty 3/5
Which practice is expressly permitted under Colorado's rebate statute?
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 C is correct
C.R.S. § 10-3-1104(1)(g) enumerates its own exceptions, including the payment of dividends from nonparticipating surplus and expense allowances under industrial plans, with related permitted arrangements addressed under C.R.S. § 10-3-1104.5. Paying dividends out of nonparticipating surplus therefore does not violate the rebate ban.
Why the other options are wrong
- A) Offering stocks, bonds, or other securities as an inducement is an expressly prohibited form of rebating.
- B) Special favors or advantages in dividends not specified in the contract are exactly what the statute forbids.
- D) A promised premium rebate is a prohibited return of premium no matter when it is scheduled to be paid.
Memory hook
Surplus dividends are statutory; stocks and side deals are not.