State RegulationsCO specificDifficulty 1/5
A producer offers to return part of the first-year premium to an applicant as an inducement to purchase a policy. Under Colorado law this offer is:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-3-1104(1)(g) prohibits giving or promising any rebate of premiums payable on the policy, or any valuable consideration not specified in the contract, as an inducement to purchase. Returning part of the first-year premium is a classic unlawful rebate under Colorado law.
Why the other options are wrong
- A) Twisting is misrepresentation used to induce lapse or exchange of existing coverage; no existing policy is involved here.
- B) Defamation requires false statements about a competitor's financial condition, which is absent from this scenario.
- D) The conduct occurs at the point of sale, not during claim handling, so the unfair claims statute does not apply.
Memory hook
Kick the kickback out — no premium giveaways in Colorado.