If a producer writes most of their business for family members, what type of business are they engaged in?

Producers who primarily write business for family members are engaged in what is referred to as controlled business. This type of activity arises when a producer predominantly sells insurance to individuals or entities that are closely related to them, such as family members. The concern with controlled business is that it can lead to potential conflicts of interest and regulatory scrutiny, as the producer's ability to act in the best interest of their clients may be compromised by personal relationships.

In many jurisdictions, including Connecticut, there are regulations in place to limit the amount of controlled business a producer can write to ensure that they maintain a competitive market and that policyholders receive objective advice. This concept is focused on maintaining ethical standards in the insurance industry and ensuring that producers are not solely profiting from their personal connections. Recognizing controlled business helps uphold the integrity of insurance practices.