A producer tells a prospect that a competing insurer "is about to become insolvent," knowing the statement is false. Which unfair marketing practice has the producer committed?

Why C is correct

Defamation in insurance marketing means making false, maliciously critical statements about a competitor's financial condition or business that tend to injure the competitor. The New Jersey Department of Banking and Insurance treats such statements as unfair methods of competition because they mislead consumers and harm rival insurers through falsehood rather than merit. Producers must compete on the strength of their own products.

Why the other options are wrong

• A) Rebating involves offering value as a purchase inducement; no inducement appears here.
• B) Twisting is misrepresentation made to induce replacement of an existing policy; the statement here attacked a competitor instead.
• D) Unfair discrimination concerns treating similarly situated applicants differently in pricing or benefits, not disparaging a competitor.

Memory hook

Lying about a rival's solvency is defamation — compete on merit, not rumors.