What constitutes controlled business?

Controlled business refers to insurance that is sold or written in a way that benefits the producer personally or financially. This typically includes coverage taken out on the producer's own life or that of family members, as it directly ties to their financial interest and potential profit from the insurance policy.

When a producer secures insurance for themselves or their family, it creates a direct relationship where the producer benefits personally from the insurance product, which is the essence of controlled business. This relationship raises concerns about potential abuses or conflicts of interest if a producer were to prioritize their personal insurance needs over that of other policyholders.

Other options, while they might involve a personal connection, do not fit the strict definition of controlled business. For instance, insurance sold to friends and relatives may still be viewed as having a broader market orientation, as the agents may not derive as direct a financial benefit as they would from their own policies. Similarly, selling insurance within the agent's community or only to company employees may involve a wider range of customers and scenarios, hence lacking the personal financial nexus that defines controlled business.