State RegulationsMI specificDifficulty 2/5
A Michigan insurer's website advertisement for a life policy states that all policy values shown are "fully guaranteed by the State of Michigan." Under Michigan Administrative Code R 500.1371 to R 500.1387, the advertisement is unlawful primarily because it:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Michigan's life insurance advertising rules, Michigan Administrative Code R 500.1371 to R 500.1387, require advertisements to be truthful and not misleading in substance. An ad implying that the state guarantees policy values misrepresents the product and falsely invokes government backing, which is also a misrepresentation of material facts under M.C.L. 500.2005. DIFS enforces these advertising standards against insurers and producers alike.
Why the other options are wrong
- A) The medium is not the violation; website advertisements are covered by the same truthfulness standards as printed material.
- B) Michigan advertising rules do not require comparative rate listings against all competitors.
- C) Mentioning Michigan is not itself unlawful; the violation is the false implication of a state guarantee of policy values.
Memory hook
Ads must tell the truth: no phantom state guarantees of policy values.