State RegulationsIL specificDifficulty 2/5
An Illinois producer emails several local agencies claiming that the principal of a competing agency committed insurance fraud and should not be trusted with clients' accounts. The claim is false and the producer knows it. Which practice has the producer committed?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
215 ILCS 5/149 makes it unlawful to make or circulate false, maliciously critical statements about a competitor that disparage the competitor's business. A knowingly false fraud accusation spread among agencies is defamation in the insurance-competition sense, and the Illinois Department of Insurance can act against the producer for it.
Why the other options are wrong
- B) No premium, commission, or other value was returned or offered to induce a sale; 215 ILCS 5/151 is not implicated.
- C) Claims-settlement practices under 215 ILCS 5/154.6 concern the treatment of claims, and no claim is being handled here.
- D) The producer's violation is disparagement of a competitor under 215 ILCS 5/149, not the omission of a required disclosure under 215 ILCS 5/500-155.
Memory hook
Lies about rivals are defamation: 149's second half polices the mud, not just the pitch.