Oregon Life & Health Insurance Exam — All Questions

A Oregon producer gives a client false information about a competitor's policy to convince the client to replace it. This prohibited practice is best described as:

• a.Rebating
• b.Sliding
• c.Twisting✓
• d.Commingling

Twisting is using misrepresentation or incomplete comparisons to induce a policyowner to lapse or replace a policy to their detriment. Rebating involves unlawful inducements, sliding involves adding unauthorized coverage, and commingling involves mishandling client funds.

Under Oregon law, offering an applicant cash or a gift not specified in the policy as an inducement to buy is:

• a.Rebating, which is prohibited✓
• b.Permitted if the client asks for it
• c.Required to be reported to the guaranty association
• d.Allowed for group policies only

Oregon, like most states, prohibits rebating -- giving inducements not stated in the policy. Both offering and accepting an unlawful rebate can be penalized; a client's request does not make it lawful.

A Oregon producer collects premium from a client. Under the producer's fiduciary duty, those funds must be:

• a.Deposited into the producer's personal account for convenience
• b.Held in trust for the insurer or client and remitted promptly, never commingled✓
• c.Used to pay the producer's business expenses first
• d.Kept by the producer until the policy's free-look period ends

Premiums are trust funds held in a fiduciary capacity. They must be kept separate and remitted promptly to the insurer; using them personally or commingling them with the producer's own money is a serious violation.