State RegulationsNY specificDifficulty 2/5
During a sales presentation in Albany, a licensed New York agent tells a prospect: 'Buy with confidence — New York's guaranty corporation stands behind every policy.' Under N.Y. Ins. Law §7718, this statement is...
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §7718, the existence of the Life Insurance Company Guaranty Corporation of New York may not be used for the purpose of sales or solicitation. Truth is no defense — even an accurate statement about coverage (the actual limits of which are set by §7708) cannot be deployed to induce a purchase. An agent who leans on the safety net to close a sale commits a violation subject to discipline by the Department of Financial Services.
Why the other options are wrong
- B) Accuracy about coverage does not matter; §7718 prohibits using the corporation's existence in sales or solicitation at all.
- C) An insurer's authorization cannot permit what the Insurance Law forbids; the prohibition applies regardless of employer consent.
- D) There is no affirmative duty to advertise the corporation — the statute does the opposite and bars its use as a selling point.
Memory hook
Never sell the safety net: guaranty corporation plus sales pitch equals a §7718 violation.