Texas Life & Health Insurance Exam — All Questions
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2 questions
State Marketing Rules, Ethics & Unfair Practices
A Texas agent offers a prospect part of the agent's commission as cash back if the prospect buys a life policy. Under Texas law this practice is:
- a.Permitted if the agent discloses it in writing
- b.Permitted for term life policies only
- c.Prohibited as unlawful rebating✓
- d.Required to be reported but otherwise legal
Rebating (giving a portion of the premium or commission, or any valuable consideration, as an inducement to buy) is prohibited in Texas. It is an unfair practice because it can lead to unfair discrimination between policyholders.
State Marketing Rules, Ethics & Unfair Practices
Which practice is defined as 'twisting' under Texas insurance regulation?
- a.Selling two policies to members of the same household
- b.Using misrepresentation to persuade a policyholder to drop an existing policy and buy a new one✓
- c.Failing to remit collected premiums to the insurer on time
- d.Backdating an application to obtain a lower age rate
Twisting is the use of misrepresentation or incomplete comparisons to induce a policyholder to lapse, surrender, or replace an existing policy in favor of a new one. It is a prohibited unfair practice in Texas.