New Hampshire Life & Health Insurance Exam — All Questions

A New Hampshire producer offers a prospect part of the producer's commission as cash back to induce the purchase of a life policy. Under state law this is:

• a.Required to be reported but otherwise legal
• b.Permitted for term policies only
• c.Prohibited as unlawful rebating✓
• d.Permitted if disclosed in writing

Rebating, giving away part of the premium or commission or other valuable consideration to induce a purchase, is prohibited in New Hampshire. It is an unfair practice because it leads to unfair discrimination between policyholders who are charged different net prices for the same coverage.

Under New Hampshire market-conduct rules, what is "twisting"?

• a.Holding appointments with more than one insurer
• b.Submitting an application electronically instead of on paper
• c.Selling policies to two members of the same household
• d.Using misrepresentation or incomplete comparisons to persuade a policyholder to drop an existing policy and buy a new one✓

Twisting is inducing a policyholder to lapse, surrender, or replace a policy through misrepresentation or misleading comparisons. It is a prohibited unfair practice. A related abuse, churning, involves replacing coverage within the same insurer's book, often using the policy's own values, to generate new commissions.