State RegulationsCO specificDifficulty 2/5
A producer circulates flyers in Denver falsely stating that a competing insurer 'is insolvent and cannot pay its claims,' hoping to win over the competitor's clients. Which unfair practice has occurred?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. 10-3-1104(1)(c) prohibits false or maliciously critical, derogatory statements about the financial condition of any person, calculated to injure. The flyer is false, targets the competitor's solvency, and aims to take its business - the classic Colorado defamation scenario under the unfair-competition statute.
Why the other options are wrong
- A) Nothing of value was returned to policyholders to induce a sale.
- B) No loan condition or debtor coercion is present in this scenario.
- D) Controlled business concerns a producer's own related premium volume, not statements about competitors.
Memory hook
Falsely crying 'insolvent' is defamation.