State RegulationsMI specificDifficulty 2/5
A Muskegon policyowner hands her quarterly life insurance premium to the insurer's licensed producer, who gives her a signed receipt. Under Michigan law, what is the legal effect of this payment?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.4010 allows premiums to be paid to an agent of the insurer upon delivery of a signed receipt, and such payment has the same effect as payment at the home office. The signed receipt protects the policyowner against later claims that the premium was never received, so the producer's collection with a signed receipt completes valid payment to the insurer.
Why the other options are wrong
- A) No insurer confirmation is required; the agent's signed receipt completes valid payment under M.C.L. 500.4010.
- C) The payment is not a personal loan to the producer; it is payment to the insurer through its authorized agent.
- D) DIFS notification plays no role in premium payment; the signed-receipt mechanism governs.
Memory hook
Signed receipt from the agent = paid to the insurer.