State RegulationsPA specificDifficulty 2/5
What does Pennsylvania's producer disclosure requirement oblige a producer to do when advising an applicant?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
40 P.S. § 310.71(b) makes disclosure a producer duty: when recommending coverage, the producer must supply the applicant with accurate, material information about the policy so the purchase decision is informed. The Pennsylvania Insurance Department enforces this duty as part of producer regulation. Confidential client files and competitors' trade secrets are never part of the disclosure obligation; candor about the recommended product is.
Why the other options are wrong
- A) Other clients' files are confidential and outside the duty; disclosure runs about the recommended coverage, not third parties' records.
- B) Competitors' trade secrets are irrelevant to the applicant's decision and are in no sense disclosable material information.
- D) Silence until a waiver is signed inverts the duty; the producer must proactively disclose material facts under 40 P.S. § 310.71(b).
Memory hook
Disclose the deal, not secrets: material facts go to the applicant.