State RegulationsCO specificDifficulty 2/5
A producer in Aurora falsely tells a client that her current life policy is worthless and urges her to let it lapse and replace it with a new policy. Under C.R.S. § 10-3-1104(1)(a), this conduct is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
C.R.S. § 10-3-1104(1)(a) makes it an unfair method of competition to misrepresent a policy's benefits or terms in order to induce a policyholder to lapse, forfeit, surrender, or exchange a policy. False statements that a policy is worthless, made to force a replacement, are the twisting pattern the Colorado Division of Insurance enforces against.
Why the other options are wrong
- A) The statements were false and made to induce a lapse, so the written factual-comparison safe harbor does not apply.
- B) Unfair claims practices concern the handling of claims, not misrepresentation used to induce a replacement.
- C) Controlled business concerns a producer's own policies, not misrepresentation made to a client.
Memory hook
Worthless today, twisted forever — false lapse talk is twisting.