DC Ethics and Unfair Practices in Insurance

Question 1

What is 'rebating' in DC insurance law?

Accepted Answer

Offering a prospect something of value not specified in the policy as an inducement to purchase insurance

Answer

Filing a fraudulent claim with the insurer

Answer

Inducing a policyholder to lapse coverage by misrepresenting a new policy

Answer

Refusing to pay a valid claim

Question 2

Which of the following best describes 'unfair discrimination' in DC insurance?

Accepted Answer

Charging different premiums to insureds with identical risk profiles based on non-actuarial factors such as race or religion

Answer

Charging higher premiums to a higher-risk class of insureds

Answer

Declining to insure a building in a flood zone

Answer

Requiring a medical exam before issuing life insurance

Question 3

Under DC insurance regulations, which of the following is an example of a 'material misrepresentation' on an insurance application?

Accepted Answer

Failing to disclose a prior DUI conviction when applying for auto insurance

Answer

Rounding up age to the nearest year

Answer

Estimating annual mileage within 1,000 miles

Answer

Providing a slightly different spelling of a street name

Question 4

What is the purpose of DC's insurance guaranty association?

Accepted Answer

To protect DC policyholders when a licensed insurer becomes insolvent

Answer

To guarantee investment returns on insurance premium funds

Answer

To regulate premium rates charged by DC insurers

Answer

To manage DC's residual market for high-risk drivers

Question 5

Which prohibited practice involves an agent convincing a client to replace a suitable existing policy with a new one primarily to generate commissions?

Accepted Answer

Churning

Answer

Twisting

Answer

Rebating

Answer

Sliding

Question 6

An agent in DC 'slides' additional coverage onto a client's policy without their knowledge. What is this practice called?

Accepted Answer

Sliding

Answer

Rebating

Answer

Twisting

Answer

Churning