State RegulationsMA specificDifficulty 2/5
Which conduct constitutes the unfair practice of misrepresentation under Massachusetts insurance law?
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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(1) defines misrepresentation as making a false statement about the benefits, advantages, conditions, or terms of a policy — including a competitor's policy — for the purpose of inducing a purchase, and M.G.L. c. 175, § 181 reaches the same conduct in policy literature. The hallmark is a false statement about the contract used as a sales inducement; honest quoting and opinions are not misrepresentation.
Why the other options are wrong
- B) A higher premium quoted because the applicant presents worse risk is honest risk-based pricing, not a false statement about the policy's terms.
- C) Recommending a lower-commission product that fits the client is the opposite of a sales inducement through falsehood; nothing in M.G.L. c. 176D, § 3(1) is implicated.
- D) An opinion column praising claims service is neither a false statement about benefits or terms nor an inducement built on a misstatement of the contract.
Memory hook
False promise about the policy equals misrepresentation; honest quotes and opinions are not.