State RegulationsMA specificDifficulty 2/5
During a market conduct examination, the Massachusetts Division of Insurance finds that an insurer keeps no record of the complaints it receives from policyholders. Under M.G.L. c. 176D, § 3(10), the insurer has committed:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 176D, § 3(10) lists failure to maintain a complete record of complaints as an unfair trade practice, and it obligates insurers to keep those records available for examination. The Massachusetts Division of Insurance uses market conduct examinations to verify the recordkeeping, and an insurer that keeps no complaint record fails the statutory duty directly. The violation is about the absence of the required records, independent of how any individual complaint was resolved.
Why the other options are wrong
- B) Defamation under M.G.L. c. 176D, § 3(3) concerns malicious statements about a competitor's financial condition, which has nothing to do with recordkeeping.
- C) The complaint record is statutorily required under M.G.L. c. 176D, § 3(10); it is not a voluntary business practice.
- D) False financial statements under M.G.L. c. 176D, § 3(5) concern false filings about the insurer's financial condition, not missing complaint files.
Memory hook
No complaint file, no defense: § 3(10) makes the record mandatory.