Under New York's rules governing life insurance illustrations, an illustration presented to a prospective life insurance applicant must do which of the following?

Why C is correct

Under Reg 74 (11 NYCRR Part 53), life insurance illustrations used in New York sales presentations must be fair and not misleading, which requires clearly separating guaranteed elements, such as guaranteed premiums, values, and charges, from nonguaranteed elements such as dividends and nonguaranteed crediting rates, so the applicant can see which figures are promised and which depend on future performance. The Department of Financial Services enforces these illustration standards, and an agent who blurs that line risks disciplinary action.

Why the other options are wrong

• A) The opposite is true: presenting nonguaranteed elements as guaranteed is exactly the kind of misleading practice Reg 74 prohibits.
• B) Illustration figures must come from the insurer, not from estimates the agent invents; an agent may not substitute personal projections for the insurer's illustration under Reg 74.
• D) Nonguaranteed elements may not simply be dropped from an illustration; where they are shown, they must be labeled as not guaranteed under Reg 74.

Memory hook

Reg 74: guaranteed vs. nonguaranteed — never let the line blur.