State RegulationsFL specificDifficulty 1/5
A Florida agent spreads knowingly false statements about a competing insurer's financial condition to persuade a prospect not to buy from that insurer. What is this practice?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Chapter 626, Florida Statutes, defamation is an unfair trade practice: making, publishing, or circulating false statements about the financial condition of an insurer or another producer, calculated to injure their business. The Department of Financial Services disciplines licensees for this conduct because it distorts the consumer's choice with misinformation rather than honest competition. Truthful comparisons, by contrast, are permitted.
Why the other options are wrong
- A) Rebating involves offering inducements not specified in the contract; it does not involve false statements about a competitor.
- C) Sliding is charging an applicant for coverage or charges not requested; it is not making false statements about a competitor.
- D) Coercion involves force, threat, or intimidation to compel a transaction, not spreading false statements about another insurer.
Memory hook
Lie about a rival's wallet = defamation.