California Insurance Code & EthicsQuestion 31 of 215
A property and casualty broker tells a prospect that a competing insurer is on the verge of insolvency, knowing the statement is false. Under the Unfair Insurance Practices Act, this conduct is best described as:
a.Twisting
b.Defamation of an insurer
c.Boycott
d.Rebating
Explanation
Section 790.03(b) prohibits making, publishing, or circulating any false, maliciously critical, or derogatory statement calculated to injure any person engaged in the business of insurance. Lying about a competitor's financial condition is the classic example of defamation of an insurer. Twisting involves misrepresentations to induce a policy replacement, boycott involves coercive agreements not to deal, and rebating involves giving improper inducements to the insured.
Law Reference: Cal. Ins. Code §790.03(b)Practice all 215 questions free — no signup required.
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