Minnesota Life Insurance License Practice Exam

A false written or oral statement made by a producer with the intent to discredit an existing policy is called?

1. Defamation

2. Fraud

3. False advertising

4. Misrepresentation

The correct answer is: Defamation

The term that most accurately describes a false written or oral statement made by a producer with the intent to discredit an existing policy is defamation. Defamation specifically involves making false statements that can harm someone's reputation, and in the context of insurance, it means that the producer is attempting to harm the reputation of an existing policy by spreading false information about it. Defamation in this case is focused on how the statement affects the reputation of the policy or the insurance company associated with it, which aligns with the intention behind the action. The nature of defamation emphasizes the significance of intent and potential harm caused to someone’s reputation or credibility, especially in the competitive field of insurance. In contrast, fraud generally refers to a more comprehensive concept involving deception for personal gain, whereas misrepresentation typically involves false information that leads to an incorrect belief or understanding, often in a contractual sense. False advertising relates more to misleading claims made by a company about its own products or services rather than disparaging an existing policy. Each option has a different legal context and implications, making defamation the most suitable choice for this scenario.