State RegulationsMA specificDifficulty 1/5
Under Massachusetts law, which of the following describes the unfair practice of false advertising in the business of insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 176D, § 3(2) defines false advertising as making, publishing, or disseminating information that is untrue or misleading and is designed to induce a person to purchase insurance. The companion prohibition on misrepresentations used to sell coverage appears at M.G.L. c. 175, § 181, and the Massachusetts Division of Insurance enforces both provisions. The focus is on misleading sales-directed communications, not on complaint handling, competitor disparagement, or premium givebacks.
Why the other options are wrong
- B) Incomplete complaint records are the separate unfair practice at M.G.L. c. 176D, § 3(10), not false advertising.
- C) Disparaging a competitor's financial condition is defamation under M.G.L. c. 176D, § 3(3), a distinct item in the unfair-practices catalogue.
- D) Returning premium as an inducement is rebating under M.G.L. c. 175, § 182 and M.G.L. c. 176D, § 3(8), not false advertising.
Memory hook
False advertising = misleading words aimed at a sale — not complaints, not competitor bashing, not premium givebacks.