NAIC Unfair Trade Practices Act (#880)

What this document is

NAIC Unfair Trade Practices Act (#880) is a naic model law published by National Association of Insurance Commissioners (NAIC). It is one of the documents that insurance license exam questions are written from, including life & health, personal lines practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• NAIC Model #880: Section 4.M (Misrepresentation in Insurance Applications)

  “Making false or fraudulent statements or representations on or relative to an application for a policy, for the purpose of obtaining a fee, commission, money or other benefit from any provider or individual person.”

• NAIC Model #880: Section 4 (Unfair Trade Practices Defined)

  “Charging fees other than commissions for financial planning by insurance producer, unless such fees are based upon a written agreement, signed by the party to be charged in advance of the performance of the services under the agreement.”

• NAIC Model NAIC 880: Section 4L (Failure to Maintain Complaint Handling Procedures)

  “This record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of each complaint, and the time it took to process each complaint. For purposes of this subsection, “complaint” shall mean any written communication...”

• NAIC Unfair Trade Practices Act § 4I(2)(e)(vi), documented objective criteria for value-added products or services

  “The availability of the value-added product or service must be based on documented objective criteria and offered in a manner that is not unfairly discriminatory. The documented criteria must be maintained by the insurer or producer and produced upon request by the Department.”

• NAIC Unfair Trade Practices Act § 8A (Cease and Desist and Penalty Orders)

  “If, after a hearing, the commissioner finds that an insurer, health insurance lead generator, person, depository institution or affiliate of a depository institution has engaged in an unfair trade practice, the commissioner shall reduce the findings to writing and shall issue and cause to be served...”

• NAIC Unfair Trade Practices Act (#880), Section 14 (Immunity from Prosecution)

  “If any person shall ask to be excused from attending and testifying or from producing any books, papers, records, correspondence or other documents at any hearing on the ground that the testimony or evidence required may tend to incriminate or subject the person to a penalty or forfeiture, and...”

• NAIC Unfair Trade Practices Act (#880), Section 4I(2)(a) (Practices not included in discrimination or rebates)

  “(2) Nothing in Subsection H, or Paragraph (1) of Subsection I shall be construed as including within the definition of discrimination or rebates any of the following practices: (a) In the case of life insurance policies or annuities, paying bonuses to policyholders or otherwise abating their...”

• NAIC Unfair Trade Practices Act (#880), Section 4.I(2)(e)(vii) (Pilot or testing program)

  “(vii) If an insurer or producer does not have sufficient evidence but has a good-faith belief that the product or service meets the criteria in H(2)(e)(ii), the insurer or producer may provide the product or service in a manner that is not unfairly discriminatory as part of a pilot or testing...”

• NAIC Unfair Trade Practices Act (#880), Section 5D(3) (Acknowledgement of the disclosure)

  “(3) A depository institution that solicits, sells, advertises, or offers insurance, and any person who solicits, sells, advertises or offers insurance on behalf of a depository institution or on the premises of a depository institution shall obtain written acknowledgement of the receipt of the...”

• NAIC Unfair Trade Practices Act (#880) § 4I(2)(f)(iii)

  “(iii) Conduct raffles or drawings to the extent permitted by state law, as long as there is no financial cost to entrants to participate, the drawing or raffle does not obligate participants to purchase insurance, the prizes are not valued in excess of a reasonable amount determined by the...”

• NAIC Unfair Trade Practices Act (#880) § 4J

  “J. Prohibited Group Enrollments. No insurer shall offer more than one group policy of insurance through any person unless such person is licensed, at a minimum, as a limited insurance representative. However, this prohibition shall not apply to employer/employee relationships, nor to any such enrollments.”

• NAIC Unfair Trade Practices Act (#880) § 5A

  “A. No person or depository institution, or affiliate of a depository institution may require as a condition precedent to the lending of money or extension of credit, or any renewal thereof, that the person to whom such money or credit is extended or whose obligation a creditor is to acquire or...”

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