State RegulationsNY specificDifficulty 1/5
A life insurance illustration includes figures based on the insurer's current dividend scale. Under Reg 74, how must those figures be presented?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Reg 74 (11 NYCRR Part 53-3.1 to .6), an illustration that includes nonguaranteed elements — such as values based on the insurer's current dividend scale — must clearly identify those figures as nonguaranteed, because the insurer may change the scale in the future. The labeling requirement lets consumers distinguish what the contract promises from what is merely projected.
Why the other options are wrong
- A) A currently paid dividend scale can change, so the figures cannot be presented as guaranteed.
- B) Projections are allowed in illustrations — they simply must be labeled as nonguaranteed.
- D) Oral explanation does not substitute for the required written identification of nonguaranteed figures.
Memory hook
Current scale is not a promise: nonguaranteed columns must say so.