State RegulationsFL specificDifficulty 2/5
An agent tells an applicant that a health policy 'covers every medical expense with no exclusions whatsoever,' although the policy contains standard exclusions. Under Florida law, this is
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Fla. Stat. 626.9541 (Chapter 626), misrepresentation consists of making untrue or misleading statements about the terms, benefits, or advantages of an insurance policy. Telling an applicant the policy has no exclusions when it does is a textbook misrepresentation, exposing the agent to DFS discipline and putting the sale itself in jeopardy.
Why the other options are wrong
- A) Twisting requires that the misrepresentation induce the replacement or lapse of an existing policy; this applicant had no policy to replace.
- B) No statement was made about a competitor or its financial condition, so defamation is not involved.
- C) Material exaggerations about coverage are not protected 'puffery' - they are actionable misrepresentations.
Memory hook
A wrong benefit promise is misrepresentation.