State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California's life insurance illustration rules, an illustration that shows policy values based on current (nonguaranteed) interest or dividend scales must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California's illustration regulations (CIC Sections 10509.950-10509.965) require illustrations to clearly state which values are guaranteed and which are nonguaranteed, and to explain that nonguaranteed values are based on current assumptions and may change. The purpose is to prevent policy illustrations from misleading consumers into believing that projected dividends or interest credits are contractual promises.
Why the other options are wrong
- B) Financial ratings are marketing information and are not a required part of the illustration disclosure.
- C) Nonguaranteed illustrated values are expressly not guaranteed; labeling them guaranteed would be exactly the deception the rules prevent.
- D) There is no requirement that an attorney approve the illustration before delivery.
Memory hook
If it is not in writing and guaranteed, it is just an estimate, and the illustration must say so.