State RegulationsCO specificDifficulty 2/5
To win a large commercial account, a Colorado producer offers the business owner shares of stock in a company the producer owns. Under C.R.S. § 10-3-1104(1)(g), offering stocks, bonds, or securities as an inducement to purchase insurance is:
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 A is correct
C.R.S. § 10-3-1104(1)(g) expressly enumerates stocks, bonds, and securities among the valuable considerations that may not be offered as an inducement to purchase insurance. The prohibition is absolute: disclosure to the insurer, public trading, or the account's commercial size does not convert an out-of-contract securities offer into a lawful practice.
Why the other options are wrong
- B) Disclosure does not cure the violation; securities as inducements are prohibited outright, not conditionally.
- C) Whether the securities are publicly traded is irrelevant to the prohibition.
- D) The anti-rebating rules apply equally to commercial and personal accounts.
Memory hook
Stocks, bonds, securities for a sale? The statute names them so you can't claim surprise.