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Idaho unfair trade practices practice questions

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The Idaho all-lines section on both producer exams includes "Marketing practices": unfair claims practices, unfair methods of competition (rebating, misrepresentation, false advertising, defamation, false financial statements, boycott, unfair discrimination, coercion of borrowers, fraud) and penalties, citing Idaho Code chapter 13 of title 41. [1] This page explains those rules and gives 12 practice questions.

The core rule

Idaho Code 41-1302 bars any trade practice that chapter 13 defines as, or that is determined to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance. It also bars dishonest or predatory insurance sales to members of the armed forces. [2]

Practice questions

1. A producer gives a new life client a gift basket worth $50, and nothing else that year. Is that a prohibited rebate in Idaho?
Answer: Not by itself. Idaho allows life, disability, property and casualty insurers and producers to give a policyholder or prospect prizes, goods or property worth no more than $200 in total in a calendar year. (41-1314(3)) [3]

2. What does Idaho's rebating law prohibit in general?
Answer: Giving or offering, as an inducement to insurance, any rebate of premium or of the producer's commission, any special favor or advantage in dividends or benefits, or any valuable consideration not specified in the contract, except as the law allows. (41-1314(1)) [3]

3. Is paying a commission to a licensed producer a rebate?
Answer: No. The section does not prohibit commissions to duly licensed producers or ordinary dividends to participating policyholders. (41-1314(2)) [3]

4. A producer makes an incomplete comparison of two policies to get a client to drop an existing policy. What is this called?
Answer: Twisting. It covers misrepresenting or making incomplete comparisons of policy terms, conditions or benefits to induce someone to lapse, forfeit, surrender, exchange or convert a policy. (41-1305) [4]

5. A producer calls a life policy "shares of stock." Is that allowed?
Answer: No. No person may misrepresent an insurance policy as shares of stock. (41-1303(3)) [5]

6. A producer spreads a false claim that a competing insurer is broke. What is this?
Answer: Defamation: a false or maliciously critical statement about an insurer's financial condition, made to injure someone in the insurance business. (41-1308) [6]

7. Two applicants are the same class with equal expectation of life, but one is charged more for no reason. What is this?
Answer: Unfair discrimination. (41-1313(1)) [7]

8. Can a disability insurer set rates based on a genetic test?
Answer: No. No person may discriminate based on a genetic test or private genetic information in issuing coverage or setting rates, terms or conditions for disability insurance or a health benefit plan. (41-1313(3)) [7]

9. An insurer refuses to pay claims without a reasonable investigation, and does so as a general business practice. Which law does it violate?
Answer: Unfair claim settlement practices, 41-1329(4). Acts count when done intentionally or with such frequency as to indicate a general business practice. [8]

10. What is the most the director can fine an insurer for unfair claim settlement practices?
Answer: Up to $10,000, after a hearing, plus or instead of suspending, revoking or refusing to continue the insurer's certificate of authority. (41-1329A) [9]

11. An insurer believes a claim is fraudulent. How long does it have to report it to the director?
Answer: Within sixty days. (41-290) [10]

12. What is the penalty for insurance fraud under 41-293?
Answer: A felony, with up to fifteen years in prison, a fine up to $15,000, or both, plus restitution. (41-293(4)) [11]

Other rules in this section

Study tips

More Idaho law questions are in the free Idaho 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.

  1. Pearson VUE, Idaho content outlines 121301 (effective July 31, 2025): https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/121301.pdf
  2. Idaho Code 41-1302: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1302/
  3. Idaho Code 41-1314: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1314/
  4. Idaho Code 41-1305: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1305/
  5. Idaho Code 41-1303: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1303/
  6. Idaho Code 41-1308: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1308/
  7. Idaho Code 41-1313: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1313/
  8. Idaho Code 41-1329: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1329/
  9. Idaho Code 41-1329A: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1329A/
  10. Idaho Code 41-290: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH2/SECT41-290/
  11. Idaho Code 41-293: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH2/SECT41-293/
  12. Idaho Code 41-1315: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1315/
  13. Idaho Code 41-1330: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1330/
  14. Idaho Code 41-1325: https://legislature.idaho.gov/statutesrules/idstat/Title41/T41CH13/SECT41-1325/

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