State RegulationsNY specificDifficulty 3/5
When may a New York agent lawfully make statements to a client about a competing insurer's financial condition?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
N.Y. Ins. Law §2604 prohibits false or maliciously made statements about an insurer's financial condition or business methods — it does not ban truthful comparisons. An agent who accurately explains a competitor's lower financial ratings or different policy terms, without intent to deceive, is engaging in lawful competition rather than defamation.
Why the other options are wrong
- A) The statute targets false and injurious statements, so honest, accurate comparisons remain perfectly lawful.
- B) The competing insurer's corporate form — stock or mutual — has nothing to do with the defamation rules.
- C) The rule applies equally to spoken and written statements; truthfulness and intent, not the medium, control legality.
Memory hook
Truth is the defense: accurate, good-faith comparisons are fine.