State RegulationsNC specificDifficulty 1/5
A producer tells an applicant, 'Buy this policy — the state guaranty association stands behind it.' Under G.S. 58-62-86, what is wrong with this statement?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under G.S. 58-62-86(a) and (b), no person may use the existence of the Life and Health Insurance Guaranty Association in any sales solicitation or inducement to purchase insurance, and member insurers must deliver the Commissioner-approved summary document before or at policy delivery. Policies excluded from association coverage require a separate conspicuous written notice under G.S. 58-62-86(d). The association is a safety net for policyholders — never a selling point.
Why the other options are wrong
- B) The statute expressly prohibits using the Association's existence to induce a sale.
- C) No written-consent exception exists that would make such a solicitation lawful.
- D) No death-benefit threshold exception exists in the statute.
Memory hook
The guaranty association is a safety net — never a sales pitch.