State RegulationsPA specificDifficulty 3/5
A producer recommends a health policy but says nothing about a significant exclusion that limits the very benefit the client asked about. Beyond any misrepresentation concern, which duty has the producer failed?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Concealing a material exclusion from an applicant fails the producer's disclosure duty under 40 P.S. § 310.71(b), which requires honest, material disclosure when coverage is recommended so the applicant can make an informed choice. An exclusion that guts the benefit the client specifically wanted is quintessentially material. The Pennsylvania Insurance Department treats such omissions as producer misconduct separate from any affirmative misstatement.
Why the other options are wrong
- A) There is no federal registry filing duty for policy exclusions; the failed duty is the producer's disclosure duty under Pennsylvania law.
- C) Competing agencies have no entitlement to notice; the disclosure duty runs to the applicant under 40 P.S. § 310.71(b).
- D) 40 P.S. § 323.3-4 governs departmental examination of producer records; it is not a duty owed to the applicant about policy content.
Memory hook
What you hide about the policy is what the disclosure law demands you tell.