State RegulationsMI specificDifficulty 3/5
To close a sale in Sterling Heights, a producer tells an applicant that her current LTC policy is 'a defective product' and urges immediate replacement, without any analysis of the existing policy's actual benefits. Under Michigan's LTC marketing standards, this conduct is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3942 governs the standards for marketing LTC insurance in Michigan, and misrepresenting the terms or value of existing coverage to induce replacement is exactly the kind of misleading practice those standards forbid. The conduct also implicates the LTC replacement framework at M.C.L. 500.3917, which exists to protect continuity of coverage when policies are exchanged. A producer who bad-mouths a policy without analyzing it exposes both the sale and the producer's license to DIFS scrutiny.
Why the other options are wrong
- B) Issuance and payment of the new policy do not launder misleading marketing; the violation occurs in the solicitation itself.
- C) Statements about the value of existing coverage are marketing conduct squarely within the scope of M.C.L. 500.3942.
- D) A higher premium on the new policy neither requires nor excuses misrepresenting the existing contract.
Memory hook
Calling the old policy 'defective' without analysis is twisting, and twisting is barred.