State RegulationsIL specificDifficulty 2/5
In an accident and health advertisement, a producer states that a policy pays benefits 'for every illness, injury, and expense, with no limitations or exclusions,' although he knows the policy contains significant exclusions. Under Illinois law, how is this conduct treated?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Misrepresenting the terms, benefits, or advantages of a policy is an unfair trade practice under 215 ILCS 5/149, and accident and health advertising is further policed under 50 Ill. Adm. Code 2002. A producer who overstates benefits in an advertisement violates Illinois law even if the policy document itself is accurate, and the Illinois Department of Insurance can act against both the producer and the insurer.
Why the other options are wrong
- A) Accurate policy wording does not cure a false advertisement; Illinois law prohibits the misrepresentation itself, not just the delivery of a different contract.
- C) The applicant's diligence is no defense; the statutory duty of truthful advertising rests on the producer and insurer.
- D) Advertising misrepresentation is expressly regulated conduct under the Illinois Insurance Code and its administrative rules, not a private matter.
Memory hook
If the ad promises more than the policy pays, 5/149 has already been broken.