State RegulationsCO specificDifficulty 2/5
A Colorado life insurer prepares an advertisement highlighting a new policy. Under the Colorado Division of Insurance's advertising requirements, the advertisement must do which of the following?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under the Colorado Division of Insurance's advertising requirements for life and annuity products, advertisements must be truthful and not misleading about the policy's benefits and terms. False or exaggerated claims expose the insurer and producer to regulatory action under Colorado's unfair trade practices framework.
Why the other options are wrong
- A) Dividends may not be projected as guaranteed unless the contract actually provides for them.
- C) Advertising must identify the insurer; omitting the name misleads consumers.
- D) Exaggerating benefits is misleading advertising, which the Division prohibits.
Memory hook
If the ad cannot survive the whole truth, it cannot run.