COLORADO STATUTES RULES AND
REGULATIONS FOR SICKNESS & ACCIDENT
INSURANCE QUESTIONS WITH ANSWERS
2026
⩥ Which of the following accurately describes the ability of a licensed
Colorado resident producer to become licensed in other states? Answer:
The producer can get a nonresident license in all reciprocal states
⩥ All of the following would be considered rebating EXCEPT Answer:
An agent misrepresents policy benefits to convince a policyowner to
replace policies
*Rebating occurs when an insured is offered something of value in order
to induce the sale of an insurance product. Both the offer and acceptance
of a rebate are illegal
⩥ What is the maximum a producer may be fined for violating a cease
and desist order? Answer: $500
⩥ Insurers must complete claims investigations Answer: promptly
,⩥ When the commissioner believes that a person has engaged in an
unfair method of competition or an unfair trade practice, before issuing a
cease and desist order, the commissioner misr Answer: Hold a hearing
⩥ In which of the following situations is it legal to limit coverage based
on marital status? Answer: It is never legal to limit coverage based on
marital status
⩥ Which of the following is NOT a penalty for violating provisions of
the insurance code? Answer: Imprisonment
*in addition to suspension of an insurance producer license, any person
who violates any provision of the insurance code bay be subject to civil
penalty (monetary fine) or an order to pay for contractual obligations
(for example, when the violation caused the failure to pay the claim)
⩥ Which type of insurers will be held liable for their actions in court?
Answer: All companies; authorized and unauthorized
⩥ An insurer decides an intimidation strategy in order to corner a large
portion of the insurance market. Which of the following best describes
this practice? Answer: Illegal
*It is illegal to participate in any boycott, coercion or intimidation that is
intended to restrict fair trade or create a monopoly
, ⩥ An insurer who willfully violates a single provision of an unfair trade
practice regulation may be fines Answer: $30,000
*In Colorado, an insurer who knew or reasonably should have known it
was in violation could be fined up to $30k for each violation, not to
exceed an aggregate of $750k annually
⩥ All of the following are considered to be misuses of fiduciary funds
EXCEPT Answer: Collecting interest on customer balances held in a
producer's trust account
*Producers who act in an agency capacity are required to maintain a
separate trust account for premiums. Any interest earned in a trust
account belong to the producer. Trust accounts may not be used as a
personal asset or as collateral for a loan to a producer; operating
expenses may not be paid out of the trust account. Producers must remit
a return premium to an insurer within 30 days after the producer
received it from the insurer.
⩥ How many days do producers have to report administrative actions
taken against them in another jurisdiction? Answer: 30 days
⩥ All of the following could be considered rebates if offered to an
insured in the sale of insurance EXCEPT Answer: Dividends from a
mutual insurer.
REGULATIONS FOR SICKNESS & ACCIDENT
INSURANCE QUESTIONS WITH ANSWERS
2026
⩥ Which of the following accurately describes the ability of a licensed
Colorado resident producer to become licensed in other states? Answer:
The producer can get a nonresident license in all reciprocal states
⩥ All of the following would be considered rebating EXCEPT Answer:
An agent misrepresents policy benefits to convince a policyowner to
replace policies
*Rebating occurs when an insured is offered something of value in order
to induce the sale of an insurance product. Both the offer and acceptance
of a rebate are illegal
⩥ What is the maximum a producer may be fined for violating a cease
and desist order? Answer: $500
⩥ Insurers must complete claims investigations Answer: promptly
,⩥ When the commissioner believes that a person has engaged in an
unfair method of competition or an unfair trade practice, before issuing a
cease and desist order, the commissioner misr Answer: Hold a hearing
⩥ In which of the following situations is it legal to limit coverage based
on marital status? Answer: It is never legal to limit coverage based on
marital status
⩥ Which of the following is NOT a penalty for violating provisions of
the insurance code? Answer: Imprisonment
*in addition to suspension of an insurance producer license, any person
who violates any provision of the insurance code bay be subject to civil
penalty (monetary fine) or an order to pay for contractual obligations
(for example, when the violation caused the failure to pay the claim)
⩥ Which type of insurers will be held liable for their actions in court?
Answer: All companies; authorized and unauthorized
⩥ An insurer decides an intimidation strategy in order to corner a large
portion of the insurance market. Which of the following best describes
this practice? Answer: Illegal
*It is illegal to participate in any boycott, coercion or intimidation that is
intended to restrict fair trade or create a monopoly
, ⩥ An insurer who willfully violates a single provision of an unfair trade
practice regulation may be fines Answer: $30,000
*In Colorado, an insurer who knew or reasonably should have known it
was in violation could be fined up to $30k for each violation, not to
exceed an aggregate of $750k annually
⩥ All of the following are considered to be misuses of fiduciary funds
EXCEPT Answer: Collecting interest on customer balances held in a
producer's trust account
*Producers who act in an agency capacity are required to maintain a
separate trust account for premiums. Any interest earned in a trust
account belong to the producer. Trust accounts may not be used as a
personal asset or as collateral for a loan to a producer; operating
expenses may not be paid out of the trust account. Producers must remit
a return premium to an insurer within 30 days after the producer
received it from the insurer.
⩥ How many days do producers have to report administrative actions
taken against them in another jurisdiction? Answer: 30 days
⩥ All of the following could be considered rebates if offered to an
insured in the sale of insurance EXCEPT Answer: Dividends from a
mutual insurer.
