State RegulationsTN specificDifficulty 2/5
Upset that a rival agency won one of his clients, a Tennessee producer circulates an email to area clients falsely asserting that the rival's main insurer is insolvent. Under Tennessee law, the email is best characterized as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
T.C.A. § 56-8-104(3) prohibits disseminating false and malicious statements about the financial condition of an insurer, calculated to injure the insurer or a person engaged in the insurance business. A knowingly false insolvency claim circulated to clients fits each element — falsity, malice, and likely injury — making it defamation under the unfair trade practices act.
Why the other options are wrong
- B) False factual claims about solvency are not opinion or puffery; competitive speech does not license falsehoods under T.C.A. § 56-8-104(3).
- C) Rebating concerns giving premium value to induce purchases; a false statement about financial condition is not a rebate.
- D) The conduct is a false statement about financial condition — defamation — not concerted pressure or threats, which is what the boycott and coercion provision addresses.
Memory hook
Lying that a rival is broke is defamation — the email trail proves the malice.