An existing Michigan insurer learns that a policyholder plans to replace her policy with coverage from another company. The insurer's agent then urges the policyholder to keep the existing policy and presents a proposal to maintain it. Under Michigan rules, this activity is:

Why B is correct

Michigan Administrative Code R 500.601 defines conservation as attempts by the existing insurer or its agent to keep existing coverage in force after the insurer receives the replacing insurer's information statement. Conservation is a recognized, lawful activity; the rules simply subject it to discipline, including filing the conservation sales proposal just as replacement proposals are filed. Only routine late-payment and reinstatement offers are carved out of the definition, so deliberate retention efforts fall squarely within it.

Why the other options are wrong

• A) Conservation is expressly permitted under the Michigan rules; it is not treated as prohibited solicitation.
• C) The existing insurer's retention efforts are a recognized activity, not an unfair trade practice, so long as the rules are followed.
• D) Only routine late-payment and reinstatement offers are excluded from the definition; a deliberate retention proposal is conservation, not exempt routine service.

Memory hook

Conservation keeps the policy; routine reinstatement is not conservation.