State RegulationsFL specificDifficulty 2/5
During a sales presentation in Orlando, an agent assures a prospect: 'Buy from this company - even if it ever fails, Florida's guaranty association guarantees your policy.' Under Fla. Stat. 631.735, this statement is
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Fla. Stat. 631.735 (Chapter 631 Part III), it is unlawful to use the existence of the Florida Life & Health Insurance Guaranty Association for sales, solicitation, or inducement purposes. Telling a prospect his policy is 'guaranteed' by the association is precisely the abuse the statute forbids, because it substitutes false solvency comfort for an independent buying decision.
Why the other options are wrong
- B) Chapter 631 does the opposite - it prohibits agents from invoking the association in sales talk.
- C) Truth is not a defense; the statute bans using the association's existence as an inducement at all.
- D) The prohibition applies across life and health lines alike; no line-of-business exception exists.
Memory hook
Never sell the safety net - it's the law's secret.