State RegulationsCO specificDifficulty 1/5
When a claim under an individual Colorado S&A policy is payable to the estate or to a minor or incompetent, the insurer may discharge its obligation by paying up to what amount to a relative by blood or marriage who is equitably entitled?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
C.R.S. § 10-16-202's payment-of-claims provision permits the insurer, when proceeds are payable to the estate or to a minor or incompetent, to pay up to $1,000 to any relative by blood or marriage who appears equitably entitled. Such payment fully discharges the insurer to that extent. This protects modest claims from probate delays without exposing the insurer to double payment.
Why the other options are wrong
- B) $2,000 is a common distractor figure; the Colorado statute caps the payment at $1,000.
- C) $500 is the per-act penalty for an individual who violates an existing cease-and-desist order under C.R.S. § 10-3-1109, unrelated to claim payment.
- D) $3,000 is the per-act penalty figure under C.R.S. § 10-3-1108 for unfair-competition violations, not a payment-to-relative limit.
Memory hook
Kin can take $1,000 — and the insurer is off the hook.