State RegulationsMA specificDifficulty 1/5
Under M.G.L. c. 175, § 181, which act constitutes insurance fraud?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 175, § 181 makes it a violation to present a false statement knowingly in support of an application for an insurance policy, and it anchors the insurance-fraud provisions enforced by the Massachusetts Division of Insurance. The statutory focus is the knowing falsity of statements made to obtain coverage, which is why the application is the classic fraud venue. The catalogue practices in the other choices are regulatory unfair trade practices under M.G.L. c. 176D, § 3, distinct from the fraud prohibition.
Why the other options are wrong
- B) Disparaging a competitor's financial condition is defamation under M.G.L. c. 176D, § 3(3), an unfair trade practice rather than the § 181 fraud offense.
- C) Incomplete complaint records violate M.G.L. c. 176D, § 3(10); recordkeeping lapses are not the knowing false statements § 181 targets.
- D) Misleading advertising is false advertising under M.G.L. c. 176D, § 3(2); the fraud question turns on knowing false application statements.
Memory hook
A lie on the application is § 181 fraud — the falsehood is in the paperwork, not the pitch.