State RegulationsNY specificDifficulty 3/5
An insurer plans an advertisement stating that its new accident and health policy 'has been approved by the Department of Financial Services.' Under N.Y. Ins. Law §2603, this statement is:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §2603, an advertisement may not use the fact that a policy or insurer is licensed or approved in a way that would mislead consumers into believing that the Superintendent of Financial Services or the Department of Financial Services recommends or endorses the product. Approval to market is a regulatory status, never an official seal of quality.
Why the other options are wrong
- A) That approval is publicly known does not make its use in selling lawful; the danger is the implied official endorsement.
- B) Even a factually true statement of approval cannot be used in advertising, because the implication of endorsement is itself misleading.
- D) No rule requires a DFS approval notice in advertisements; the rule runs in the opposite direction.
Memory hook
Approved for sale is not endorsed by DFS — never blur the two.