Texas General Lines — Life, Accident, Health and HMOTexas Statutes and Rules Common to Life, Accident, Health and HMOEasy
An insurance company's advertisement states that its health insurance plan 'covers everything, with no deductibles or copays ever!' Upon closer inspection, the plan actually has specific exclusions and a high annual deductible for certain services. This advertisement is an example of which prohibited act?
- ATwisting
- BBoycott
- CUnfair Discrimination
- DFalse Advertising
Show answer & explanationAnswer & explanation
Correct answer: D. False Advertising
False advertising involves making untrue, deceptive, or misleading statements about an insurance product in any public communication. The advertisement's claim of 'covers everything' with 'no deductibles or copays ever' is clearly misleading given the actual plan terms.
Why the other options are wrong
- A. Twisting involves inducing policy replacement through misrepresentation, not general advertising.
- B. Boycott involves concerted refusal to do business, not misleading ads.
- C. Unfair discrimination involves treating individuals in the same class differently, not misleading advertising claims.
False Advertising (Prohibited Act)
Making, publishing, or disseminating any untrue, deceptive, or misleading statement or representation in connection with the business of insurance.
- Applies to all forms of public communication (print, digital, broadcast).
- Prohibits claims that misrepresent policy benefits, terms, or conditions.
- Aims to protect consumers from being misled about insurance products.
Memory trick: If the ad's a lie, it's false advertising, don't deny.