State RegulationsMI specificDifficulty 1/5
Which statement best describes the regulation of variable life insurance products sold in Michigan?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Variable products are both insurance contracts and securities, so two regimes apply at once. Federally, the SEC and FINRA govern the securities aspects; in Michigan, DIFS administers the variable-product rules found at Michigan Administrative Code R 500.830 to R 500.839 and R 500.841 to R 500.842, with DIFS Bulletin 09-15 providing guidance. A producer cannot lawfully sell variable products in Michigan by satisfying only one of the two regimes.
Why the other options are wrong
- B) Federal oversight alone is incomplete: Michigan retains insurance regulatory authority through DIFS and the Michigan Administrative Code rules on variable products.
- C) Variable contracts have a securities component, so treating them as ordinary fixed life insurance ignores the required federal securities compliance.
- D) Dependence on separate-account performance is precisely why the products are regulated as securities; it is not an exemption from oversight.
Memory hook
Variable means double duty: securities rules plus DIFS rules, both at once.