State RegulationsTN specificDifficulty 2/5
A producer holds only a limited lines license for travel insurance in Tennessee and wants to sell an annuity to a client. Which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Tennessee's limited lines licenses cover narrow product classes such as travel and baggage coverage and confer no broader selling authority; annuities are life insurance products requiring the life line of authority. Selling an annuity on a limited lines license would be unlicensed activity that the Tennessee Department of Commerce & Insurance can penalize under its producer licensing enforcement authority.
Why the other options are wrong
- B) Limited lines authority is deliberately narrow and contains no annuity component, whatever the transaction size.
- C) An oral disclosure to the client cannot create licensing authority the producer does not hold.
- D) Licensing requirements exist to protect the public and cannot be waived by a private agreement between producer and client.
Memory hook
Limited lines, limited products — travel yes, annuities no.