Achievable Life

76. Wisconsin Laws & Ethics

76.7. Unfair Marketing Practices

Misrepresentation, Rebating & Discrimination

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Wisconsin groups its main marketing prohibitions under s. 628.34 and ss. Ins 6.54, 6.55. The categories are:

Misrepresentation
Unfair inducements (rebating)
Unfair discrimination
Restraint of competition
Unfair restriction of contracting parties’ choice of insurer
Extra charges
Attempt to unduly influence employers
Unfair use of official position

Each one deserves its own treatment.

Misrepresentation

It’s a violation for intermediaries (and their employees or anyone acting on their behalf) to make any written or oral communication about any insurance contract, the insurance business, any insurance company, or any intermediary that contains false or misleading information. The definition specifically includes:

Information that’s misleading because of incompleteness.
Filing a report with intent to deceive the person examining it.
Making a false entry in a record.
Failing to make a proper entry in a record for the purpose of concealing information.
Using a name, slogan, emblem, or related device that will or is likely to cause an intermediary to be mistaken for another intermediary.

If an intermediary distributes cards or documents, exhibits signs, or publishes advertisements (including social media posts) that include misrepresentations and reference a particular insurer the intermediary represents, the violation carries a presumption that the insurer also committed the violation. So the insurer is on the hook with the intermediary.

Real-World Examples

OCI has flagged each of the following as misrepresentation:

Telling a 77-year-old that a Medicare supplement policy “pays every expense not covered by Medicare” or “fills all the gaps.” No supplement does that.
Sending a Facebook message to a customer claiming their current health insurer is “financially unsound” and its agents are “crooks” without provable basis.
Posing as a Social Security Administration representative to gain access to a customer’s home, when the real purpose is selling insurance.
Handing out business cards identifying yourself as an agent for an insurer you don’t actually represent.
Telling a customer that a fire insurance policy has been “endorsed by the governor and the state.”
Telling a customer that your company has “taken over” the customer’s present life insurer and the customer must therefore purchase new whole life insurance.
Telling a customer that your disability policy “guarantees your income.” (You could say “helps replace” income — but “guarantees” goes too far.)

Marketing Prohibitions Overview

Governed by Wisconsin s. 628.34 and ss. Ins 6.54, 6.55
Eight main categories:
- Misrepresentation
- Unfair inducements (rebating)
- Unfair discrimination
- Restraint of competition
- Unfair restriction of contracting parties’ choice of insurer
- Extra charges
- Attempt to unduly influence employers
- Unfair use of official position

Misrepresentation

Violation: false/misleading written or oral communication about contracts, insurance business, insurer, or intermediary
Includes:
- Misleading via incompleteness
- Filing reports with intent to deceive
- False record entries or omitting entries to conceal info
- Using name/slogan/emblem likely to cause confusion with another intermediary
Insurer presumption of liability if intermediary’s misrepresentation (cards, signs, ads, social media) references that specific insurer

Real-World Examples of Misrepresentation

Overstating policy coverage (e.g., Medicare supplement “pays every expense”)
False negative claims about competitors (e.g., calling another insurer “financially unsound” or agents “crooks”)
Impersonating government officials (e.g., posing as Social Security rep) to gain sales access
Misrepresenting agency affiliation (claiming to represent an insurer you don’t)
False claims of official endorsement (e.g., “endorsed by the governor”)
False claims of company takeover to pressure new purchases
Overpromising policy outcomes (e.g., disability policy “guarantees” vs. “helps replace” income)

Next | 76.7.2 Restraint, Restrictions & Other Prohibited Practices

Misrepresentation, Rebating & Discrimination

Wisconsin groups its main marketing prohibitions under s. 628.34 and ss. Ins 6.54, 6.55. The categories are:

Misrepresentation
Unfair inducements (rebating)
Unfair discrimination
Restraint of competition
Unfair restriction of contracting parties’ choice of insurer
Extra charges
Attempt to unduly influence employers
Unfair use of official position

Each one deserves its own treatment.

Misrepresentation

Information that’s misleading because of incompleteness.
Filing a report with intent to deceive the person examining it.
Making a false entry in a record.
Failing to make a proper entry in a record for the purpose of concealing information.
Using a name, slogan, emblem, or related device that will or is likely to cause an intermediary to be mistaken for another intermediary.

Real-World Examples

OCI has flagged each of the following as misrepresentation:

Telling a 77-year-old that a Medicare supplement policy “pays every expense not covered by Medicare” or “fills all the gaps.” No supplement does that.
Sending a Facebook message to a customer claiming their current health insurer is “financially unsound” and its agents are “crooks” without provable basis.
Posing as a Social Security Administration representative to gain access to a customer’s home, when the real purpose is selling insurance.
Handing out business cards identifying yourself as an agent for an insurer you don’t actually represent.
Telling a customer that a fire insurance policy has been “endorsed by the governor and the state.”
Telling a customer that your company has “taken over” the customer’s present life insurer and the customer must therefore purchase new whole life insurance.
Telling a customer that your disability policy “guarantees your income.” (You could say “helps replace” income — but “guarantees” goes too far.)

Key points

Marketing Prohibitions Overview

Governed by Wisconsin s. 628.34 and ss. Ins 6.54, 6.55
Eight main categories:
- Misrepresentation
- Unfair inducements (rebating)
- Unfair discrimination
- Restraint of competition
- Unfair restriction of contracting parties’ choice of insurer
- Extra charges
- Attempt to unduly influence employers
- Unfair use of official position

Misrepresentation

Violation: false/misleading written or oral communication about contracts, insurance business, insurer, or intermediary
Includes:
- Misleading via incompleteness
- Filing reports with intent to deceive
- False record entries or omitting entries to conceal info
- Using name/slogan/emblem likely to cause confusion with another intermediary
Insurer presumption of liability if intermediary’s misrepresentation (cards, signs, ads, social media) references that specific insurer

Real-World Examples of Misrepresentation

Overstating policy coverage (e.g., Medicare supplement “pays every expense”)
False negative claims about competitors (e.g., calling another insurer “financially unsound” or agents “crooks”)
Impersonating government officials (e.g., posing as Social Security rep) to gain sales access
Misrepresenting agency affiliation (claiming to represent an insurer you don’t)
False claims of official endorsement (e.g., “endorsed by the governor”)
False claims of company takeover to pressure new purchases
Overpromising policy outcomes (e.g., disability policy “guarantees” vs. “helps replace” income)

Wisconsin groups its main marketing prohibitions under s. 628.34 and ss. Ins 6.54, 6.55. The categories are:

Misrepresentation
Unfair inducements (rebating)
Unfair discrimination
Restraint of competition
Unfair restriction of contracting parties’ choice of insurer
Extra charges
Attempt to unduly influence employers
Unfair use of official position

Each one deserves its own treatment.

Misrepresentation

Information that’s misleading because of incompleteness.
Filing a report with intent to deceive the person examining it.
Making a false entry in a record.
Failing to make a proper entry in a record for the purpose of concealing information.
Using a name, slogan, emblem, or related device that will or is likely to cause an intermediary to be mistaken for another intermediary.

Real-World Examples

OCI has flagged each of the following as misrepresentation:

Telling a 77-year-old that a Medicare supplement policy “pays every expense not covered by Medicare” or “fills all the gaps.” No supplement does that.
Sending a Facebook message to a customer claiming their current health insurer is “financially unsound” and its agents are “crooks” without provable basis.
Posing as a Social Security Administration representative to gain access to a customer’s home, when the real purpose is selling insurance.
Handing out business cards identifying yourself as an agent for an insurer you don’t actually represent.
Telling a customer that a fire insurance policy has been “endorsed by the governor and the state.”
Telling a customer that your company has “taken over” the customer’s present life insurer and the customer must therefore purchase new whole life insurance.
Telling a customer that your disability policy “guarantees your income.” (You could say “helps replace” income — but “guarantees” goes too far.)