A producer tells an applicant that a health policy pays dividends every year, knowing the policy contains no dividend provision. Which unfair trade practice has the producer committed?

Why C is correct

Va. Code § 38.2-503 makes it unlawful to misrepresent the terms, benefits, or advantages of any policy of insurance. Asserting a benefit that the contract does not contain — a fictitious dividend promise — is textbook misrepresentation, which the Virginia Bureau of Insurance polices as an unfair trade practice. The representation need not be in writing to violate the section.

Why the other options are wrong

• A) A boycott is a collective withholding of business to coerce a competitor; nothing in the stem involves group action.
• B) Defamation concerns false statements about a competitor's financial condition or business affairs, not promises about one's own product.
• D) Rebating involves giving anything of value not specified in the contract as an inducement; the producer here gave a false promise, not a rebate.

Memory hook

Promising what the contract does not pay is misrepresentation.