State RegulationsGA specificDifficulty 1/5
A Georgia producer tells an applicant that a life policy's dividends are guaranteed at a level the insurer has never committed to, in order to close the sale. Which unfair trade practice has the producer committed?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under O.C.G.A. § 33-6-4(b)(2), misrepresentation includes falsely describing the terms, benefits, or dividends of a policy, or making any false statement about a policy to induce a purchase. Inventing a guaranteed dividend level the insurer never committed to is a textbook misrepresentation, and it exposes both the producer and the insurer to Commissioner sanctions.
Why the other options are wrong
- A) Defamation targets false or malicious statements about competitors or other insurance persons, not false statements made to a buyer about a policy.
- B) Rebating involves giving or receiving valuable consideration not specified in the contract, not false statements about dividends.
- D) A boycott is a concerted refusal to deal with a party, which has nothing to do with inflated dividend promises to an applicant.
Memory hook
Guaranteed dividends? Only if the insurer says so.