COLORADO SICKNESS & ACCIDENT
INSURANCE EXAM SCRIPT 2026
QUESTIONS AND COMPLETE SOLUTIONS
⩥ 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.
Dividends paid to policyholders of a mutual insurer are not considered to
be a rebate because the policy specifies that they might be paid.
,⩥ Forcing a client to buy insurance from a particular lender as a
condition of granting a loan is defined as Answer: Coercion
⩥ A producer who is licensed to transact several types of insurance
wants to remove a line of authority from his license. What should the
producer do? Answer: Submit an appropriate form to the commissioner
and return the license for amendment.
⩥ An insurer publishes intimidating brochures that portray the insurer's
competition as financially and professionally unstable. Which of the
following best describes this act? Answer: Illegal under any
circumstances
When a company criticizes the financial situation of another company,
with the intention of injuring that company, it has committed an illegal
trade practice called "defamation."
⩥ A producer's license has been suspended for noncompliance with
continuing education requirements. What is the producer'a duty
regarding the license? Answer: Promptly return it to the Commissioner
⩥ Under Colorado's Unfair Claims Practices regulations, when denying
a claim an insurer must do all of the following EXCEPT Answer: **A.-
Pay a claim that occurs after the grace period has ended
, B.- indicate to the claimant which section of the policy they are relying
upon
C.- conduct a reasonable investigation
D.- respond promptly to claims communications
⩥ The Governor has asked the Commissioner to examine an insurance
company after a group of insureds has filed several complaints against
the company. Who will pay for this examination? Answer: The insurance
company
⩥ Which of the following is a specific service for which an insurance
producer is NOT allowed to charge a fee to the applicant or
policyholder? Answer: Qualified retirement plan design for which the
producer receives a commission from the insurer
⩥ The requirement that producers must account for all insurance funds
collected and not commingle those funds with their own is known as
Answer: Fiduciary responsibility
*Money collected with respect to an insurance transaction must be held
in a position of trust by the producer or broker
⩥ Producers will be deemed to be using their license primarily to write
controlled business if, during any 12 month period Answer: The total
INSURANCE EXAM SCRIPT 2026
QUESTIONS AND COMPLETE SOLUTIONS
⩥ 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.
Dividends paid to policyholders of a mutual insurer are not considered to
be a rebate because the policy specifies that they might be paid.
,⩥ Forcing a client to buy insurance from a particular lender as a
condition of granting a loan is defined as Answer: Coercion
⩥ A producer who is licensed to transact several types of insurance
wants to remove a line of authority from his license. What should the
producer do? Answer: Submit an appropriate form to the commissioner
and return the license for amendment.
⩥ An insurer publishes intimidating brochures that portray the insurer's
competition as financially and professionally unstable. Which of the
following best describes this act? Answer: Illegal under any
circumstances
When a company criticizes the financial situation of another company,
with the intention of injuring that company, it has committed an illegal
trade practice called "defamation."
⩥ A producer's license has been suspended for noncompliance with
continuing education requirements. What is the producer'a duty
regarding the license? Answer: Promptly return it to the Commissioner
⩥ Under Colorado's Unfair Claims Practices regulations, when denying
a claim an insurer must do all of the following EXCEPT Answer: **A.-
Pay a claim that occurs after the grace period has ended
, B.- indicate to the claimant which section of the policy they are relying
upon
C.- conduct a reasonable investigation
D.- respond promptly to claims communications
⩥ The Governor has asked the Commissioner to examine an insurance
company after a group of insureds has filed several complaints against
the company. Who will pay for this examination? Answer: The insurance
company
⩥ Which of the following is a specific service for which an insurance
producer is NOT allowed to charge a fee to the applicant or
policyholder? Answer: Qualified retirement plan design for which the
producer receives a commission from the insurer
⩥ The requirement that producers must account for all insurance funds
collected and not commingle those funds with their own is known as
Answer: Fiduciary responsibility
*Money collected with respect to an insurance transaction must be held
in a position of trust by the producer or broker
⩥ Producers will be deemed to be using their license primarily to write
controlled business if, during any 12 month period Answer: The total
