State RegulationsMI specificDifficulty 1/5
Which statement best describes how variable life insurance products are regulated in Michigan?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Variable products combine insurance and securities features: the securities component is subject to federal oversight by the SEC and FINRA, while Michigan regulates the insurance side through Michigan Administrative Code R 500.830 through R 500.839 and R 500.841 through R 500.842, with DIFS Bulletin 09-15 providing related guidance. A producer must satisfy both the Michigan insurance licensing framework and federal securities requirements to sell them.
Why the other options are wrong
- A) Federal securities law applies to the separate-account investment component, so regulation is not exclusive to DIFS.
- C) Michigan's variable-product rules apply to variable business sold in this state; being a security does not create an exemption.
- D) Variable products are among the most closely regulated products; investment-linked returns do not remove them from regulatory oversight.
Memory hook
Variable = two regulators: the securities feds plus the R 500.830 rules.