State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 780, an insurer or its agent may not issue, circulate, or use a statement known to be a misrepresentation concerning:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Section 780 prohibits insurers, officers, agents, brokers, and solicitors from causing or permitting a statement — known or that should have been known to be a misrepresentation — about the terms of a policy, the benefits or privileges promised under it, or future dividends payable. This protects consumers from exaggerated sales claims. Misrepresenting policy benefits during a sales presentation violates this section even if no sale is completed.
Why the other options are wrong
- A) Applicant credit history is not the subject of Section 780, which targets statements about the policy itself.
- C) Commissioner fee schedules are administrative and are not a subject of this anti-misrepresentation provision.
- D) Statements about a competitor's portfolio may be false advertising, but Section 780 covers the policy, its benefits, and dividends.
Memory hook
Do not stretch the truth about policy terms, benefits, or future dividends. Section 780 polices sales claims.