While presenting a life insurance proposal to a client in Cleveland, an Ohio producer explains that if the issuing insurer ever fails, the guaranty association will back the policy, using that point to urge an immediate purchase. How should this practice be characterized?

Why B is correct

ORC 3956.18 prohibits any person from using the existence of the Ohio Life and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any contract of insurance. Member insurers must deliver the association's approved summary document prior to or at the time of policy delivery, and guaranty-association disclosures in advertising are addressed under OAC 3901-1-52. Using the association's safety net as a selling point is itself the violation.

Why the other options are wrong

• A) Accuracy of the statement does not cure the violation; the statute bans the use of the association's existence as an inducement, accurate or not.
• C) Membership of the issuing insurer is irrelevant; the ban applies to any person using the association's existence to sell.
• D) Delivering the summary document is a separate required disclosure at or before policy delivery; it does not authorize using the association as a sales inducement.

Memory hook

Name the guaranty fund to make a sale and the sale itself breaks the law.