State RegulationsCO specificDifficulty 2/5
Under C.R.S. § 10-2-702, which of the following payments is permitted despite the general prohibition on paying commissions to unlicensed persons?
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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(2) excepts renewal or deferred commissions paid to persons entitled to receive them, along with payment to a producer's own partnership or corporation and payments to entities that do not sell, solicit, or negotiate. The exceptions preserve earned entitlements without rewarding unlicensed sales activity.
Why the other options are wrong
- A) A finder's fee tied to new sales rewards unlicensed solicitation, which C.R.S. § 10-2-702(1) prohibits.
- B) A share of new premiums paid to an unlicensed manager is compensation for sales activity and falls outside the exceptions in C.R.S. § 10-2-702(2).
- C) A bonus for solicited applications pays an unlicensed person for selling, soliciting, or negotiating, which C.R.S. § 10-2-702(1) forbids.
Memory hook
Renewals and deferred dues survive; new-sale money for the unlicensed never does.