State RegulationsNY specificDifficulty 2/5
Which of the following is a prohibited act under the Insurance Frauds Prevention Act (N.Y. Ins. Law §403)?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §403, it is a prohibited fraudulent insurance practice for any person, knowingly and with intent to defraud, to present or cause to be presented false, incomplete, or misleading information in connection with an application, claim, or investigation. The prohibition targets deliberate deception, and violations feed DFS enforcement and possible prosecution.
Why the other options are wrong
- B) An honest clerical error lacks the knowing conduct and intent to defraud that §403 requires for a prohibited fraudulent act.
- C) Asking an adjuster to reconsider a valuation is an ordinary, legitimate exercise of a claimant's rights, not fraud.
- D) Nonrenewal for nonpayment of premium is a lawful underwriting action permitted under New York law, not a fraudulent practice.
Memory hook
IFPA §403 punishes knowing lies to defraud, not honest mistakes.