State RegulationsFL specificDifficulty 2/5
A Florida entrepreneur forms a club whose only real purpose is to let members buy group life insurance cheaply. What is the legal result?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 627, Florida Statutes, a group seeking life insurance coverage must be a bona fide group - an employer-employee group, union, association, or similar - that exists for a purpose beyond buying insurance. Paying dues, registering, or limiting membership to residents does not cure a group formed solely as an insurance-buying vehicle; the OIR and the DFS treat such arrangements as impermissible.
Why the other options are wrong
- A) Collecting dues does not change the club's sole purpose of buying insurance; a bona fide purpose is required.
- B) Registration with the OIR cannot legitimize a group that exists only to obtain insurance.
- D) Residency limits are irrelevant; the disqualifier is the group's insurance-only purpose.
Memory hook
No insurance-buying clubs: the group needs a real reason to exist.