Controlled business can best be described as what?

Controlled business can best be described as what?

• A. Insurance sold to the general public
• B. Insurance business written on a producer's family members
• C. Insurance solely for the producer's friends
• D. Insurance exclusively for high net worth individuals

Answer: (B)

Controlled business refers specifically to insurance that is sold or written for the benefit of a producer's family members, themselves, or their close associates. This type of business can sometimes be viewed with suspicion by regulators because it raises concerns about potential conflicts of interest and the producer's objectivity in serving the public. In the context of this question, the correct description captures the essence of controlled business, where a producer may benefit from commissions or policy incentives based on sales to those within their personal circle. This could include family members or close friends, making it a unique category compared to general insurance sales aimed at the broader market or exclusive sales to wealthy clients. Insurance sold to the general public signifies a broader market approach, which is not limited to personal connections. Meanwhile, insuring only friends or high net worth individuals does not encompass the broader definition that includes family members, thus not fully capture the concept of controlled business as it applies in regulatory terms.

Controlled business refers specifically to insurance that is sold or written for the benefit of a producer's family members, themselves, or their close associates. This type of business can sometimes be viewed with suspicion by regulators because it raises concerns about potential conflicts of interest and the producer's objectivity in serving the public.

In the context of this question, the correct description captures the essence of controlled business, where a producer may benefit from commissions or policy incentives based on sales to those within their personal circle. This could include family members or close friends, making it a unique category compared to general insurance sales aimed at the broader market or exclusive sales to wealthy clients.

Insurance sold to the general public signifies a broader market approach, which is not limited to personal connections. Meanwhile, insuring only friends or high net worth individuals does not encompass the broader definition that includes family members, thus not fully capture the concept of controlled business as it applies in regulatory terms.