What is considered "controlled business" in insurance?

Controlled business in insurance refers to the practice where an agent sells insurance products primarily influenced by personal relationships rather than general market demand. This can include policies sold to friends, family, or acquaintances where the agent has a direct personal connection.

In the context of regulation, many states have rules regarding controlled business as it can pose ethical concerns and may not reflect the broader interests of the market. The intention is to ensure that agents are not solely relying on personal networks but are also engaging in a wider scope of business to serve a more diverse clientele.

The other choices focus either on specific types of relationships, like friends and family, or an overly broad scope that encompasses all business conducted by the company, which does not accurately define controlled business. Identifying controlled business helps maintain integrity and fairness in the insurance market by ensuring that agents are motivated by the needs of their clients rather than personal interests.