State RegulationsTN specificDifficulty 1/5
When a Tennessee producer uses an illustration in selling a life policy, what must happen at the time of application under Tenn. Comp. R. & Regs. 0780-1-40?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Tenn. Comp. R. & Regs. 0780-1-40 requires the applicant, at the time of application, to sign a statement acknowledging that nonguaranteed elements are not guaranteed and may be more or less favorable than illustrated. The signed acknowledgment travels with the application, giving the Tennessee Department of Commerce & Insurance a record that the projections were disclosed before the sale was completed.
Why the other options are wrong
- B) Forwarding notices to a prior insurer belongs to the replacement procedure under Tenn. Comp. R. & Regs. 0780-1-24, not the illustration acknowledgment duty.
- C) Illustrations are not filed with the Commissioner for approval; the rule imposes presentation and signature duties on the parties instead.
- D) The acknowledgment is captured at application time, not deferred to delivery; delaying it would defeat the rule's disclosure purpose.
Memory hook
Illustration used? Applicant signs 'not guaranteed' — at application, not later.