To close a sale, a Tennessee producer deliberately quotes an applicant a life insurance premium far below the insurer's filed rate, intending to fix the number later and knowing the insurer will not honor that figure. Under T.C.A. § 56-8-104, this intentional misquotation of premium to induce the purchase is:

Why D is correct

T.C.A. § 56-8-104's misrepresentation section reaches intentional misquotations of premium rates: a knowingly false figure used to induce the purchase is a misrepresentation about the terms of the coverage. The producer here is not offering his own money to make up the difference, which would raise the separate rebating concern; he is making a false statement about the policy's cost, and the Tennessee Department of Commerce & Insurance treats that as an unfair trade practice subject to discipline.

Why the other options are wrong

• A) Competitive quoting still must be truthful; a deliberately false figure the insurer will not honor is misrepresentation, not competition.
• B) The conduct violates the unfair trade practices statute itself, so the consequences are regulatory and not limited to the agency contract.
• C) Rebating requires an actual rebate or extra-contractual favor, such as paying part of the premium; a false quote conveys nothing and instead misrepresents the price.

Memory hook

A knowingly fake quote is a misrepresentation, not a discount — and not a rebate.