Ethics

Which of the following is considered an unfair claims practice?

Failing to affirm or deny coverage within a reasonable time after receiving proof of loss

Leo, a producer, sat down with a prospective client to discuss a long-term care policy. He used a computer program to outline and emphasize his remarks. The visual presentation contained the principal benefits of the policy he was trying to sell. Although he mentioned that it also had, the usual, conditions, he did not include those in his visual presentation or specify what they were. The producer was engaging in:

Misrepresentation

In the underwriting of insurance policies, some amount of discrimination is:

Present in many cases, because of differing levels of risk

In discussing a potentially lucrative group policy with a business owner who had purchased a business and just moved into the community, an established producer jokingly remarked, "Well, would it sweeten the pot if I could assure you membership in the country club?"The producer added, "I'm on the membership committee and while we're not accepting new application right now, I'm sure something could be worked out." These remarks constituted:

Rebating

All of the following acts are considered unfair trade practices, EXCEPT

Replacement

All of the following, if performed frequently enough to indicate a general business practice, are unfair claims settlement practices, EXCEPT

Requiring submission of preliminary claim report or a formal proof of loss before paying a claim.

An example of an unfair claim settlement practice would include

Advising a claimant of the possibility that, should the claimant reject a settlement offer, an arbitration award might be less than the offer

Defamation occurs when:

An individual or entity makes false, derogatory statements about an insurer's financial condition that are calculated to injure the insurer's business

The practice of using misrepresentation to induce a policyholder to replace a policy issued by the insurer the producer represents is called:

Churning

In a conversation with an older family friend, an insurance agent, Sly, inquired with what company she had a Medicare supplement policy. When she told him, the agent was silent. Concerned by his silence, the woman asked if the company was a reliable company. The producer asked, "Have you received any financial statements regarding their solvency?" This producer was

Engaging in defamation