General Insurance PrinciplesQuestion 598 of 716
Requiring a borrower to buy insurance from a particular agent as a condition of receiving a loan is an example of:
a.Rebating premium back to the borrower
b.Routine field underwriting by the agent
c.Fair and lawful price competition
d.Coercion, an unfair trade practice
Explanation
Forcing a purchase through the power of another transaction is coercion, an unfair trade practice. It is neither fair competition, rebating, nor underwriting.
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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)