Texas General Lines — Life, Accident, Health and HMOTexas Statutes and Rules Common to Life, Accident, Health and HMOMedium
A life insurance agent is found to have used intimidation to discourage a client from filing a complaint with the Texas Department of Insurance (TDI). Which of the following best describes this prohibited act?
- ADefamation.
- BMisrepresentation.
- CCoercion.
- DUnfair discrimination.
Show answer & explanationAnswer & explanation
Correct answer: C. Coercion.
Using intimidation to prevent someone from filing a complaint is an act of coercion. Coercion involves forcing or compelling someone to do something against their will, often through threats or undue pressure, which is a prohibited unfair trade practice in insurance.
Why the other options are wrong
- A. Defamation involves making false statements that harm another's reputation, not intimidating a complainant.
- B. Misrepresentation involves making false statements about policy terms or benefits, not intimidating a client.
- D. Unfair discrimination involves treating individuals differently based on protected characteristics, not preventing complaints.
Coercion in Insurance
The act of using force, intimidation, or undue influence to compel a person to engage in or refrain from an insurance transaction or complaint.
- Prohibited unfair trade practice.
- Involves intimidation or threats.
- Can apply to policy purchase, claims, or complaints.
Memory trick: Don't coerce clients, defame competitors, or misrepresent policies.