Life & Health · Chapter 20 · Marketing Practices
Misrepresentation (Unfair Practice)
Definition
An agent's use of publications, sales materials, or false, misleading, or deceptive statements to unfairly influence the purchase of a policy — e.g., telling a client that dividends are guaranteed when they are not. (By an applicant, misrepresentation is a false application statement; an omission/concealment of a material fact can be construed as one, and it is material if the insurer, knowing the truth, would decline the application.)
In plain English
Lying to make the sale — the textbook example is promising guaranteed dividends.
Exam tip
Dividends from a mutual insurer are never guaranteed — calling them guaranteed is the exam's stock misrepresentation scenario.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms