West Virginia State Life Insurance Practice Exam

What could a producer be found guilty of if they told a claimant that their rights might be impaired unless they completed a release form?

1. Fraud

2. Coercion

3. Misrepresentation

4. Negligence

The correct answer is: Coercion

A producer could be found guilty of coercion in this scenario because coercion involves improperly influencing someone to act in a certain way, often under pressure or threat. When a producer tells a claimant that their rights might be compromised unless they complete a release form, they are essentially using a form of psychological pressure that can compel the claimant to act against their best interests. This manipulation can lead to the claimant not fully understanding the consequences of signing the release and can infringe upon their ability to make an informed decision. In the context of insurance claims, where the claimant may seek to recover benefits or compensation, such tactics can undermine fair dealings and erode trust in the insurance process. Therefore, labeling this act as coercion reflects the unethical nature of pressuring a claimant into making decisions that may not be in their best interest.