9. Life and Health Insurance Marketing Practices Flashcards
(22 cards)
What is misrepresentation in the context of Texas insurance law?
A statement about the terms of a policy, its benefits, or its dividends that is untrue, deceptive, or misleading.
Includes omitting material facts or stating them in a misleading way.
What is ‘twisting’ in insurance practices?
Making a misrepresentation to induce a policyholder to lapse, forfeit, or surrender an existing policy and replace it with another.
Twisting is expressly prohibited.
What can a pattern of misrepresentations by an agent lead to?
Disciplinary actions including loss of license and indications of intentional fraud that can result in criminal penalties.
What constitutes false information and advertising in insurance?
An advertisement or statement that contains an untrue, deceptive, or misleading statement regarding the business of insurance.
This applies to various forms of publication, including newspapers and the Internet.
What is defamation in the insurance context?
Making false statements about an insurer or person engaged in the insurance business that are derogatory and intended to harm that person.
True or False: An applicant can be coerced into buying a life insurance policy by threatening their credit.
False.
Coercion into buying a policy is prohibited.
What is commingling in insurance practices?
Insurance agents may not commingle premiums belonging to insurers and insureds with their personal funds.
What is prohibited regarding false financial statements?
Filing, publishing, or providing false financial statements about an insurer to deceive the recipient.
What are insurers and agents prohibited from offering to encourage policy purchases?
Rebates on premiums or commissions, employment offers, or other valuable incentives not provided for in the contract.
What is the maximum value of promotional items that can be given to customers?
$25.
What constitutes unfair discrimination in insurance?
Charging different premiums or providing different dividends or benefits to insureds of the same class and risk.
When is charging different premiums not considered unfair discrimination?
When it reflects individual risk profiles based on valid underwriting criteria.
What actions may the TDI take against individuals engaged in unfair trade practices?
Examine and investigate their affairs, issue statements of charges, and impose administrative penalties.
What must testimonials or endorsements by third parties reflect?
The endorser’s current, personal opinions and experiences with the insurer or its products.
What must accompany a paid endorsement in advertising?
The words ‘paid endorsement’.
What must an advertisement prominently display when comparing policies of different insurers?
‘The description of [the other insurance company’s name] policy was not furnished by [the other insurance company’s name].’
What must a producer do if they suspect fraudulent insurance acts?
Report it in writing to the TDI insurance fraud unit within 30 days.
What information must the TDI insurance fraud unit submit annually?
The number of cases completed and recommendations for regulatory responses to fraudulent activities.
What is the TDI’s obligation regarding written complaints?
Notify each complaining party of the status of the complaint at least once per quarter.
Fill in the blank: Misrepresenting a policy to induce a policyholder to _______ an existing policy is known as twisting.
lapse.
Fill in the blank: Ads or promotional material may not state or imply that a product is endorsed by a particular _______.
organization.
True or False: Paid testimonials do not need to be labeled as such.
False.
