State RegulationsIL specificDifficulty 2/5
An Illinois accident and health producer designs his own newspaper advertisement that overstates a policy's hospital benefit. Under 50 Ill. Adm. Code 2002, who is accountable for the misleading advertisement?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under 50 Ill. Adm. Code 2002, an insurer is responsible for the advertising of its accident and health products, including material created and used by its appointed producers. An overstated hospital benefit also constitutes misrepresentation under 215 ILCS 5/149. The practical consequence is that insurers must review and control A&H sales material their producers use, and an insurer cannot escape liability by pointing to the producer as the ad's author.
Why the other options are wrong
- A) The producer is accountable, but not exclusively; 50 Ill. Adm. Code 2002 also holds the insurer whose product is advertised responsible.
- B) The newspaper is a publication channel; advertising responsibility under 50 Ill. Adm. Code 2002 rests with the insurer and the producer, not the publisher.
- C) The Illinois Department of Insurance does not become liable for an unapproved ad; it is the enforcement authority, and the rule places responsibility on the insurer and producer.
Memory hook
If your product is in the ad, the ad is your problem.