Nevada Life & Health Insurance Exam — All Questions

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

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

Under Nevada market-conduct rules, what is "twisting"?

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

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.