CARD Q025
A producer knowingly spreads a false rumor that a competing insurer cannot pay its claims, intending to damage its reputation. Which prohibited practice is most specifically illustrated?
- Unfair discrimination
- Rebating
- Defamation
- Twisting
Defamation
Defamation involves false statements intended to harm an insurer’s reputation or financial standing. Twisting uses misleading comparisons to induce a policy change; rebating involves purchase inducements; unfair discrimination involves prohibited differences in treatment.
Why each choice is right or wrong
A. Unfair discrimination
Incorrect. Unfair discrimination concerns prohibited differences in treatment.
B. Rebating
Incorrect. Rebating concerns purchase inducements outside the policy, not the false rumor.
C. Defamation
Correct. Defamation involves false statements intended to harm an insurer’s reputation or financial standing. Twisting uses misleading comparisons to induce a policy change; rebating involves purchase inducements; unfair discrimination involves prohibited differences in treatment.
D. Twisting
Incorrect. Twisting specifically emphasizes misleading inducement to replace or change coverage; that is not stated here.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.