Georgia Property & Casualty Practice Exam

Which unfair trade practice did Agent Tyler commit by making disparaging comments about a competitor?

1. Defamation

2. Rebating

3. Unfair discrimination

4. Coercion

The correct answer is: Defamation

Agent Tyler committed the unfair trade practice of defamation by making disparaging comments about a competitor. Defamation in the context of insurance refers to making false statements that harm the reputation of another individual or business. This can occur through slander (spoken) or libel (written) and is recognized as an unethical practice that can lead to legal consequences. In the insurance industry, agents and brokers are expected to uphold a standard of professionalism and integrity. Making false claims or negative remarks about a competitor can mislead consumers and damage the competitor's professional standing, which is why it is considered an unfair practice. Such actions violate industry standards as they can undermine confidence in the market and create an unfair competitive environment. The other options do not apply in this context; rebating refers to returning part of a premium to the insured, unfair discrimination involves treating individuals differently based on non-risk-related factors, and coercion pertains to pressuring individuals into actions against their will or best interests. In contrast, defamation specifically addresses the act of making harmful statements about a competitor. Thus, choosing defamation accurately reflects the nature of Agent Tyler's actions.