Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Common to Life and Health InsuranceEasy
A Florida licensed health insurance agent is discussing a new policy with a client. The agent fails to explain the policy's exclusions and limitations, focusing only on the benefits. This agent's action is an example of which unfair trade practice?
- ARebating
- BMisrepresentation
- CTwisting
- DDefamation
Show answer & explanationAnswer & explanation
Correct answer: B. Misrepresentation
Misrepresentation involves making false statements or omitting material information about an insurance policy. Failing to disclose exclusions and limitations, while highlighting only benefits, is a form of misrepresentation.
Why the other options are wrong
- A. Rebating is offering something of value not specified in the policy as an inducement to purchase, which is not occurring here.
- C. Twisting involves inducing a policyholder to lapse or surrender an existing policy to replace it with a new one to the insured's detriment, which is not described.
- D. Defamation involves making false statements about another insurer to harm its reputation, which is not the case here.
Misrepresentation (Unfair Trade Practice)
Making false statements or omitting material facts about an insurance policy, insurer, or agent, which may mislead a consumer.
- Can be oral or written.
- Includes both false statements and omission of material facts.
- Aims to deceive or mislead the consumer.
Memory trick: Don't misrepresent, twist, defame, or rebate!