State RegulationsNY specificDifficulty 2/5
As part of a New York life insurance sale, the applicant signs the basic illustration. Under Reg 74, the applicant's signature attests that the applicant understands that:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Reg 74 (11 NYCRR Part 53-3), a basic illustration used in a New York life insurance sale must be signed by the applicant or policyowner, who attests that the non-guaranteed elements shown are not guaranteed, are subject to change, and could be either higher or lower than illustrated. The attestation ensures the purchaser actually understands which figures rest on the insurer's current scale rather than on contractual guarantees.
Why the other options are wrong
- A) Only the guaranteed elements are contractually promised; the illustration's non-guaranteed figures cannot be treated as guaranteed.
- C) The Superintendent does not approve each illustration; the attestation is a consumer-understanding device, not an approval certificate.
- D) Signing the illustration has no effect on the purchaser's statutory right to return the policy; it addresses non-guaranteed elements only.
Memory hook
Signing an illustration means acknowledging the 'maybe' numbers can move up or down.