State RegulationsCO specificDifficulty 2/5
A Colorado producer's advertisement implies that a life policy is a risk-free savings plan. Under the Colorado Division of Insurance's standards for advertising life insurance, what is the consequence of this characterization?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Describing a life policy as a risk-free savings plan misrepresents its nature. Under standards enforced by the Colorado Division of Insurance, misleading advertising is an unfair trade practice under C.R.S. § 10-3-1104, and presenting a policy as a security-like investment compounds the violation.
Why the other options are wrong
- A) The product type does not excuse a misleading characterization of risk.
- B) Life advertising is subject to Colorado Division of Insurance requirements, including Colorado Insurance Regulation 1-2-18.
- D) The producer's personal belief does not cure an advertisement that misleads consumers.
Memory hook
No life policy is a risk-free bank — say otherwise and answer to the Division.