State RegulationsNJ specificDifficulty 2/5
A producer completes a life application for a client and knows the client's answers about recent hospitalizations are false, but submits it anyway because the sale will pay a large commission. Under New Jersey's Insurance Fraud Prevention Act, what is the producer's exposure?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
N.J.S.A. 17:33A-1 et seq. reaches anyone who knowingly makes or assists in making a false statement in connection with an insurance transaction — and producers are squarely within its reach. A producer who submits an application containing answers she knows are false is not a bystander; the commission motive is irrelevant to the violation. The New Jersey Department of Banking and Insurance can also discipline the producer's license for the same conduct, so both civil fraud exposure and licensing consequences follow.
Why the other options are wrong
- A) The applicant's signature does not launder the producer's knowledge; knowingly aiding a false statement is its own violation.
- B) The fraud act attaches to false statements in insurance transactions; it does not wait for a claim to be paid.
- C) A complaint from the applicant is not a precondition — the state can act on the false statement itself.
Memory hook
Submitting what you know is false makes you part of the fraud — commission is no defense.