State RegulationsNY specificDifficulty 1/5
An agent tells a prospect: 'Buy from my company — even if we ever fail, the Life Insurance Company Guaranty Corporation will pay your claim.' Under N.Y. Ins. Law §7718, this sales pitch is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §7718, using the existence of the Life Insurance Company Guaranty Corporation in the sale or solicitation of insurance is prohibited. The guaranty system exists to protect policyowners after an insolvency occurs, not to reassure prospects during a sale, and invoking it to induce a purchase is unlawful regardless of the statement's accuracy.
Why the other options are wrong
- A) No law requires guaranty disclosure at the point of sale — in fact §7718 forbids using it as a sales tool.
- B) Accuracy is not the test — even a true statement about the corporation cannot be used to induce the sale.
- C) Financial impairment of the insurer does not create an exception; the prohibition applies at all times.
Memory hook
Sell the policy, not the safety net — never invoke the guaranty corporation in a sales pitch (§7718).