What is considered controlled business in the context of insurance agents?

What is considered controlled business in the context of insurance agents?

• A. Drawing premiums from the general public
• B. Soliciting insurance mainly from family and associates
• C. Working exclusively with large corporations
• D. Providing services to competitors

Answer: (B)

Controlled business in the context of insurance agents refers specifically to insurance transactions that an agent conducts primarily with family members, personal friends, or associates. This term often carries regulatory implications, as many insurance jurisdictions allow agents to write a limited amount of controlled business to prevent potential ethical conflicts where agents could receive commissions mainly from individuals they are closely connected to, instead of ensuring a broader marketplace. The intention is to maintain fairness in the insurance profession and protect consumers from potential conflicts of interest. In contrast, drawing premiums from the general public would not define controlled business, as it implies a wider client base beyond personal connections. Working exclusively with large corporations suggests a commercial or organizational focus rather than a personal one, which does not fit the definition of controlled business. Providing services to competitors also does not align with the concept, as this would not typically involve writing insurance policies at all. Each of these alternatives reflects different business practices and contexts that are not limited to the personal connections that characterize controlled business.

Controlled business in the context of insurance agents refers specifically to insurance transactions that an agent conducts primarily with family members, personal friends, or associates. This term often carries regulatory implications, as many insurance jurisdictions allow agents to write a limited amount of controlled business to prevent potential ethical conflicts where agents could receive commissions mainly from individuals they are closely connected to, instead of ensuring a broader marketplace. The intention is to maintain fairness in the insurance profession and protect consumers from potential conflicts of interest.

In contrast, drawing premiums from the general public would not define controlled business, as it implies a wider client base beyond personal connections. Working exclusively with large corporations suggests a commercial or organizational focus rather than a personal one, which does not fit the definition of controlled business. Providing services to competitors also does not align with the concept, as this would not typically involve writing insurance policies at all. Each of these alternatives reflects different business practices and contexts that are not limited to the personal connections that characterize controlled business.