California Insurance Code & EthicsQuestion 55 of 215
A producer tells a client that an admitted insurer's policy contains a 'guaranteed dividend,' when no such dividend is contractually guaranteed. This violates §790.03(a) as:
a.Coercion
b.Misrepresentation in the sale of insurance
c.Boycott
d.Unauthorized practice of law
Explanation
Section 790.03(a) prohibits making, issuing, or circulating any misrepresentation regarding the terms or benefits of any policy. Promising a guaranteed dividend that does not exist is a textbook misrepresentation. Coercion, boycott, and unauthorized practice of law are separate violations.
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