State RegulationsTN specificDifficulty 2/5
A Tennessee insurer's illustration projects a current crediting rate well above any rate it actually credited in recent years, in order to outshine competing proposals. Under Tenn. Comp. R. & Regs. 0780-1-40, which statement is correct?
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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 bars nonguaranteed elements that are not supported by the insurer's actual recent historical experience, and the Tennessee Department of Commerce & Insurance can treat such inflated projections as misleading presentations. A disclosure label cannot rescue a projection that the insurer's own history does not support.
Why the other options are wrong
- B) Nonguaranteed elements are regulated, not unbounded; the experience-support requirement is the rule's central control.
- C) Labeling a projection as possible does not satisfy the self-supporting standard of the rule.
- D) What competitors illustrate is irrelevant; the test is the insurer's own actual recent experience.
Memory hook
History or nothing: a crediting rate with no track record is a violation.