State RegulationsMI specificDifficulty 2/5
A Grand Rapids producer wants to begin selling variable annuities. Beyond holding a Michigan insurance license, what must occur before the producer can lawfully sell these contracts?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Variable annuities are securities as well as insurance products, so the producer must satisfy the federal securities registration requirements and affiliate with a broker-dealer in addition to holding the insurance license. In Michigan, DIFS administers variable-product rules under Michigan Administrative Code R 500.830 to R 500.839 and DIFS Bulletin 09-15, so state insurance oversight continues alongside the securities regime. Selling without the securities side violates both regimes.
Why the other options are wrong
- A) No Insurance Director waiver excuses the securities requirements; both regimes must be satisfied independently.
- C) 24 hours is Michigan's general continuing education requirement per 2-year period under M.C.L. 500.1204c, not a variable-products pre-licensing course.
- D) Appointment by two insurers is not a prerequisite for selling variable contracts; the securities registration and broker-dealer affiliation are the missing pieces.
Memory hook
Variable annuity = insurance license plus securities registration: both gates must open.