At a sales meeting in Raleigh, a licensed producer distributes flyers claiming that a competing insurer 'is insolvent and cannot pay its claims,' although the producer knows the competitor's most recent statutory financial statement shows it to be sound. This conduct is an example of:

Why C is correct

Under the Unfair Trade Practices Article (G.S. 58-63-15), defamation consists of false and maliciously critical statements about another person's or insurer's financial condition that are calculated to injure. Knowing the competitor's statutory financial statement shows it to be sound, the producer's flyer is a textbook case. Rebating involves giving value not specified in the policy, twisting misrepresents terms to induce replacement, and unfair discrimination refers to unequal treatment of like risks — none of those fits this fact pattern.

Why the other options are wrong

• A: Rebating is offering a rebate, discount, or special favor not specified in the policy as an inducement to purchase (G.S. 58-33-85); no inducement of that kind appears here.
• B: Twisting is willfully misrepresenting or making incomplete comparisons of policy terms to induce a lapse, surrender, or exchange of an existing policy — the flyer attacks a competitor's solvency instead.
• D: Unfair discrimination concerns treating insureds of the same class and similar life expectancy differently, not making false statements about a competitor's financial condition.

Memory hook

Insolvent-claim flyer = defamation: false + malicious + about a competitor's finances.