A Georgia producer tells an applicant that a life policy pays dividends every year, when dividends are discretionary and not guaranteed. Under O.C.G.A. § 33-6-4, this conduct is:

Why D is correct

Under O.C.G.A. § 33-6-4(b)(2), misrepresenting the terms, benefits, conditions, or dividends of a policy — or making any false statement designed to induce the purchase — is an unfair trade practice. Telling an applicant that discretionary dividends are paid every year misstates the policy's benefits and is precisely the conduct the statute targets; the Insurance Commissioner can discipline the producer for it.

Why the other options are wrong

• A) Coercion involves boycott, intimidation, or compelling a person to act against their will under O.C.G.A. § 33-6-4(b)(4) — not overstating benefits.
• B) Controlled business refers to writing coverage on the licensee's own interests; it has no connection to statements about dividends.
• C) Defamation requires a false or derogatory statement about a person or insurer calculated to cause injury, not a misstatement about the policy being sold.

Memory hook

Promise only what the policy pays — overstating dividends is misrepresentation.

Why C is correct

Under O.C.G.A. § 33-6-4(b)(2), misrepresentation includes falsely describing the terms, benefits, or dividends of a policy, or making any false statement about a policy to induce a purchase. Inventing a guaranteed dividend level the insurer never committed to is a textbook misrepresentation, and it exposes both the producer and the insurer to Commissioner sanctions.

Why the other options are wrong

• A) Defamation targets false or malicious statements about competitors or other insurance persons, not false statements made to a buyer about a policy.
• B) Rebating involves giving or receiving valuable consideration not specified in the contract, not false statements about dividends.
• D) A boycott is a concerted refusal to deal with a party, which has nothing to do with inflated dividend promises to an applicant.

Memory hook

Guaranteed dividends? Only if the insurer says so.