State RegulationsCO specificDifficulty 2/5
A producer circulates a flyer in Boulder falsely stating that a competing insurer is insolvent and cannot pay claims, hoping agents will move their business. Under Colorado law, this is:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-3-1104(1)(c) prohibits defamation: making or circulating false or maliciously critical statements about the financial condition of an insurer, calculated to injure the insurer or its producers. A knowingly false insolvency flyer designed to divert business fits every element; truthful, factual comparisons remain lawful, but this statement is false and injurious.
Why the other options are wrong
- A) No premium, dividend, or contract benefit is being given to any insured, so rebating is not implicated.
- B) Twisting involves inducing policyholders to replace policies through misrepresentation, not attacking a competitor's solvency.
- D) Competitive advertising is regulated; false attacks on a competitor's financial condition are prohibited defamation.
Memory hook
False + malicious + about their money + meant to hurt = defamation.