What constitutes controlled business?

• A. Insurance on the producer's own life or property, or lives or property of the producer's family or business associates
• B. Insurance for clients who are policyholders for more than five years
• C. Reinsurance transactions involving the producer
• D. Commercial auto policies written by the producer

Answer: (A)

Controlled business is insurance written on the producer’s own life or property, or on the lives or property of the producer’s family or business associates. This category exists to prevent agents from shaping their income by self-serving policies for themselves or people they know closely, rather than from fair market business. The statement that best captures this idea is the one describing policies on the producer or their close relations or associates. The other descriptions refer to ordinary client business, reinsurance, or standard commercial auto policies not tied to the producer’s close connections, so they don’t fit the concept of controlled business.