While selling an annuity in Ann Arbor, a producer tells the applicant that Michigan's life and health insurance guaranty association will back every dollar of the annuity, which overstates the actual protection the association provides. Which provision makes this statement unlawful?

Why C is correct

M.C.L. 500.2005(i) of the Michigan Insurance Code makes it unlawful to misrepresent the terms, benefits, or coverage provided by the Michigan Life and Health Insurance Guaranty Association (MLHIGA) or the Property and Casualty Guaranty Association. Guaranty-association protection is limited by statute, so using exaggerated claims about that safety net to close a sale is a specific misrepresentation offense that DIFS can sanction, even apart from any other misstatement about the product itself.

Why the other options are wrong

• A) The false information and advertising provision (M.C.L. 500.2007) addresses false published information about the business of insurance generally, but statements about guaranty-association coverage are specifically and separately prohibited by M.C.L. 500.2005(i).
• B) The rebating prohibition (M.C.L. 500.2024) concerns giving anything of value not specified in the contract as an inducement, which is unrelated to overstated guaranty protection.
• D) The unfair discrimination provisions (M.C.L. 500.2019 and 500.2020) concern unequal treatment of insureds of the same class, not statements about guaranty coverage.

Memory hook

Never oversell the guaranty fund — 500.2005(i) makes guaranty hype its own offense.