Hawaii unfair and deceptive practices practice questions
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The Hawaii all-lines section on both producer exams lists "Unfair and deceptive practices" under marketing practices, citing HRS 431:13-101 through 108. [1] This page explains what that article defines as unfair, how violations are handled, and gives 12 practice questions.
What HRS 431:13-103 defines as unfair
Section 431:13-103(a) lists unfair methods of competition and unfair or deceptive acts, including: [2]
- Misrepresentation and false advertising of policies, such as misrepresenting benefits or dividends, misrepresenting to cause a lapse, exchange or surrender, calling a policy shares of stock, or advertising an insurer's assets without its liabilities.
- False information and advertising generally.
- Defamation of an insurer's financial condition.
- Boycott, coercion and intimidation, including requiring someone to buy another policy as a condition of getting or renewing one.
- False financial statements and stock operations.
- Unfair discrimination, including refusing or limiting coverage because of sex or marital status, or solely because someone took an HIV test before applying.
- Rebates.
- Unfair claim settlement practices.
- Failure to keep complaint records, misrepresentation in applications, and failure to get information before recommending an annuity.
Practice questions
1. A producer offers to share part of the commission with a client who buys a policy. Which category is this?
A. Defamation
B. Rebates
C. Boycott
D. False financial statements
Answer: B. Rebates include giving any rebate of premium, special favor, or valuable consideration or inducement not specified in the contract. (431:13-103(a)(8)) [2]
2. Can an insurer refuse to insure someone solely because they took an HIV test before applying?
Answer: No. (431:13-103(a)(7)(G)) [2]
3. Can an insurer use marital status at all?
Answer: Only to define who is eligible for dependent benefits. Refusing or limiting coverage because of sex or marital status is unfair discrimination. (431:13-103(a)(7)(E)) [2]
4. An insurer requires a customer to buy a second policy before it will renew the first. What is this?
Answer: A form of boycott, coercion and intimidation under 431:13-103(a)(4)(B). [2]
5. How quickly must an insurer respond to a policyholder's communication about a claim?
Answer: With reasonable promptness, and in no case more than fifteen working days. The response must do more than acknowledge receipt. (431:13-103(a)(11)(B)) [2]
6. Liability is affirmed and the amount is not in dispute. When must the insurer offer payment?
Answer: Within thirty calendar days. (431:13-103(a)(11)(F)) [2]
7. A claim stays unresolved for thirty calendar days after it was reported. What must the insurer do?
Answer: Give the insured, or the beneficiary when it applies, a reasonable written explanation for the delay. (431:13-103(a)(11)(G)) [2]
8. How many written complaints in twelve months create a rebuttable presumption of a general business practice?
Answer: Three or more, charging separate violations. (431:13-103(c)) [2]
9. The commissioner sends a written inquiry about a consumer complaint. How fast must the licensee respond?
Answer: In no case more than fifteen working days. (431:13-103(f)) [2]
10. Before a hearing on an alleged unfair practice, how much notice is required?
Answer: At least fifteen days after the statement of charges and notice are served. (431:13-106(a)) [3]
11. After a hearing finds a violation the person did not know about, what is the fine limit?
Answer: Not more than $1,000 for each act, up to $10,000. If the person knew or reasonably should have known, up to $5,000 for each act and up to $50,000 in any six-month period, and the license can be suspended or revoked. (431:13-201(a)) [4]
12. What is the fine for violating a cease and desist order?
Answer: Up to $10,000 for each act in violation, and the license may be suspended or revoked. (431:13-202(a)) [5]
Lenders and insurance (431:13-104)
A lender may not require a borrower to buy insurance through a particular insurer or producer as a condition of a loan. A lender who solicits insurance must explain in writing that the insurance may be bought from an insurer or producer of the borrower's choice. These rules do not apply to credit life or credit disability insurance. [6]
Health claim payment timing (431:13-108)
For the health plans the section covers, a claim that is not contested or denied must be paid within thirty calendar days of a written claim or fifteen calendar days of an electronic claim, unless the contract sets shorter times. [7]
Study tips
- The fine ladder: $1,000 per act up to $10,000 if the violator did not know, $5,000 per act up to $50,000 in six months if they knew or should have known, and $10,000 per act for violating a cease and desist order.
- Fifteen shows up a lot: fifteen working days to respond on claims or to the commissioner, and fifteen days' hearing notice.
More Hawaii law questions are in the free Hawaii insurance law practice test.
Prep Retention is independent and is not affiliated with Pearson VUE or the state.
Sources
Laws and exam documents quoted as of October 2026.
- Pearson VUE, Hawaii content outlines 121201 (effective January 1, 2026): https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/121201.pdf
- HRS 431:13-103: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0013-0103.htm
- HRS 431:13-106: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0013-0106.htm
- HRS 431:13-201: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0013-0201.htm
- HRS 431:13-202: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0013-0202.htm
- HRS 431:13-104: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0013-0104.htm
- HRS 431:13-108: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0013-0108.htm