State RegulationsMI specificDifficulty 1/5
Under the Michigan Insurance Code's false statement provisions (M.C.L. 500.2014 and 500.2018), it is unlawful to:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The false statement provisions of the Michigan Insurance Code, M.C.L. 500.2014 and 500.2018, prohibit willfully making or permitting false statements or entries in any document, record, or filing connected with the business of insurance. Falsified records corrupt the regulatory system because DIFS examiners and consumers rely on them, so willful falsification is an unfair practice punishable by the director regardless of whether anyone relies on the false entry.
Why the other options are wrong
- A) Charging different premiums is not itself a false statement; the relevant prohibition is unfair discrimination between insureds of the same class under M.C.L. 500.2019 and 500.2020.
- B) Delayed claim payment is governed by the claims-processing and interest provisions, principally M.C.L. 500.2006, not by the false statement provisions.
- D) Replacing a policy with the applicant's signed replacement statement follows the Michigan Administrative Code replacement procedure (R 500.601 to R 500.606) and is lawful.
Memory hook
False statements: willful lies in insurance records are unlawful no matter who reads them.