Home › Ohio › Ohio Unfair Trade Practices, Claims and Consumer Protection

Ohio Unfair Trade Practices, Claims and Consumer Protection: Practice Questions

20 free practice questions with explanations. Pick an answer for each, then check your score.

Exam weight: Unfair trade, claims, inducement, privacy and fraud rules in the 11-35 outline on the Ohio Life, Accident and Health agent exam (11-35). Updated 2026-11-05.

Quick study guide

Ohio's unfair trade practices law (Ohio Rev. Code §§ 3901.19 to 3901.26) applies to any person, licensed or not (§ 3901.20), and covers oral statements too.

Unfair and deceptive acts (§ 3901.21)

Misrepresentation (A): misstating policy terms, benefits or dividends, or making an incomplete comparison to induce someone to buy, lapse or surrender insurance. False advertising (B): any untrue, deceptive or misleading advertisement. Defamation (C): a statement false as to an insurer's financial condition and calculated to injure. Unfair discrimination: sex or marital status (L); unfair differences within the same class and hazard in non-life lines (M); refusing disability income insurance solely because the applicant manages a household (N). The criminal versions, §§ 3999.08 and 3999.09, are fourth-degree misdemeanors, and a § 3999.08 conviction costs the license for up to one year.

Rebating, gifts and fees

Sections 3901.21(G), 3911.20, 3999.05 and 3933.01 bar rebates and any inducement not specified in the policy; under § 3911.20 the person who knowingly receives one also breaks the law. Insurance may not be offered as an inducement to buy other insurance or advertised as "free" (G)(2). Since 21 July 2022, § 3901.213 allows value-added services that relate to the coverage (unproven ones as a pilot of up to one year), free public raffles, and noncash gifts, meals or charitable donations up to $250 per policy year per term or calendar year (Bulletin 2022-04), if not unfairly discriminatory or tied to a purchase. An agent's refund is presumed late after 30 days (§ 3905.14(B)(32)), and § 3905.55 bars agent fees for applications, changes, claims or renewals on individual life, individual sickness or accident, and disability income policies.

Claims settlement (Ohio Adm. Code 3901-1-07)

These acts are unfair when frequent enough to indicate a general business practice. Days are calendar days, and notice to an agent is notice to the insurer.

Duty	Time limit
Acknowledge pertinent communications	15 days after notice of claim
Send required forms and instructions	15 days after notice of claim
Reply to other communications and Department inquiries	21 days
Begin investigating	21 days after notice of claim
Accept or reject (or say more time is needed)	21 days after proof of loss; then letters every 90 days
Pay an agreed settlement	5 days after receiving the agreement

Privacy (Chapter 3904) and fraud

The notice of information practices is due at policy delivery, or earlier if information is gathered from sources other than the applicant or public records. Requests to see or correct recorded personal information are answered within 30 business days. After an adverse underwriting decision, the applicant has 90 business days to ask for the reasons and the insurer has 21 business days to answer. Obtaining information under false pretenses is a fourth-degree felony (§ 3904.14). Insurance fraud (§ 2913.47) runs from a first-degree misdemeanor to a third-degree felony by amount; insurers must report suspected fraud to the Department (§ 3999.42) and are immune for good-faith reports (§ 3999.31).

Practice questions

To persuade a client to drop her whole life policy for a new one, an Ohio agent compares only the new policy's lower premium and leaves out the surrender charge and the cash value she would lose. Under Ohio Rev. Code § 3901.21(A), this is:
1. A.A violation only if the client actually surrenders the old policy
2. B.Rebating, because the client would save premium by switching
3. C.Permitted, because every figure the agent quoted was accurate
4. D.An unfair and deceptive act: an incomplete comparison made to induce her to lapse or surrender insurance
Show answer
Answer: D. Section 3901.21(A) defines as unfair and deceptive any misrepresentation or incomplete comparison made to any person for the purpose of inducing, or tending to induce, that person to purchase, amend, lapse, forfeit, change or surrender insurance. A comparison can be accurate in each figure and still be incomplete, and the violation is in making it for that purpose, whether or not the client switches. Section 3999.08 separately makes a misleading or incomplete comparison to induce a lapse or surrender a crime.
Source: Ohio outline 1.2: Misrepresentation (3901.21(A),(B); 3905.14(B)(5); 3999.08); Ohio Rev. Code § 3901.21; Ohio Rev. Code § 3999.08
An agent is convicted under Ohio Rev. Code § 3999.08 of circulating a statement that misrepresents the benefits of a life insurance policy. What licensing consequence does the statute require?
1. A.The agent's license is suspended only until a $1,000 fine is paid
2. B.The agent receives a written warning on a first conviction
3. C.The agent's license is permanently revoked with no right to reapply
4. D.The superintendent must revoke the agent's license for not more than one year
Show answer
Answer: D. Section 3999.08 states that upon any conviction under it, the superintendent shall revoke, for not more than one year, the license of the offender; if the superintendent finds after a hearing that an insurer knowingly permits its agents to violate the section, the insurer's license is revoked. The offense itself is a misdemeanor of the fourth degree under § 3999.99(C). The statute does not provide for permanent revocation, a fine-based suspension or a warning.
Source: Ohio outline 1.2: Misrepresentation (3901.21(A),(B); 3905.14(B)(5); 3999.08); Ohio Rev. Code § 3999.08; Ohio Rev. Code § 3999.99
An agent emails prospects a "market alert" falsely stating that a competing Ohio life insurer "failed its last state audit and cannot pay claims," hoping to win their business. Which provision most directly prohibits this?
1. A.Ohio Rev. Code § 3901.21(C), which bans statements false as to an insurer's financial condition and calculated to injure
2. B.Ohio Rev. Code § 3901.21(L), which bans refusing coverage because of sex or marital status
3. C.Ohio Rev. Code § 3901.21(G), which bans inducements not specified in the policy
4. D.Ohio Rev. Code § 3905.55, which governs the fees agents may charge consumers
Show answer
Answer: A. Section 3901.21(C) makes it an unfair and deceptive act to make or circulate, directly or indirectly, any statement or literature that is false as to the financial condition of an insurer and calculated to injure any person engaged in the business of insurance. Section 3999.09 also makes it a crime to circulate any statement defamatory of an insurer doing business in Ohio, a fourth-degree misdemeanor under § 3999.99(C). Division (G) covers inducements, (L) covers sex and marital status, and § 3905.55 covers agent fees.
Source: Ohio outline 1.2: Defamation of insurer (3901.21(C), (D); 3999.09); Ohio Rev. Code § 3901.21; Ohio Rev. Code § 3999.09
An Ohio insurer declines to make disability income insurance available to an applicant solely because her principal occupation is managing her household. Under Ohio Rev. Code § 3901.21, this is:
1. A.Permitted, because a person managing a household has no earned income to replace
2. B.A violation only if the insurer also refuses to cover her spouse
3. C.An unfair and deceptive practice listed in division (N)
4. D.Permitted, as long as the insurer offers her life insurance instead
Show answer
Answer: C. Section 3901.21(N) lists as unfair and deceptive refusing to make disability income insurance available solely because the applicant's principal occupation is managing a household. Offering a different product does not cure the refusal, and the rule does not depend on how the spouse is treated. Related divisions bar refusing, cancelling or not renewing a policy because of sex or marital status (L) and unfair discrimination among people of the same class and essentially the same hazard in non-life insurance (M).
Source: Ohio outline 1.2: Unfair discrimination (3901.21(L), (M), (N)); Ohio Rev. Code § 3901.21
Which practice does Ohio Rev. Code § 3901.21(G)(2) specifically prohibit?
1. A.Making false statements about the dividends previously paid on similar policies
2. B.Filing a false statement of an insurer's financial condition with a public official
3. C.Offering insurance as an inducement to buy another policy, or calling it "free" or "no cost" in an advertisement
4. D.Refusing to renew a policy because of the policyholder's marital status
Show answer
Answer: C. Section 3901.21(G)(2) says an insurer, producer or representative shall not offer or provide insurance as an inducement to the purchase of another policy, and shall not use the words "free" or "no cost," or words of similar import, to that effect in an advertisement. Refusing renewal for marital status falls under division (L), false statements about past dividends under division (A), and false financial statements filed with officials under division (D).
Source: Ohio outline 1.2: Illegal inducements (3933.01; 3999.05, 3901.21(G), 3911.20); Ohio Rev. Code § 3901.21
A marketing company with no Ohio insurance license runs a radio ad claiming a life insurer's policies "never go up in price and pay double at any age," which is untrue. The company argues Ohio's unfair trade practices law does not reach it because it is not licensed. Under Ohio Rev. Code §§ 3901.20 and 3901.21(B), is it right?
1. A.Yes; §§ 3901.19 to 3901.26 apply only to insurers and licensed agents
2. B.No; the law applies to any person, licensed or not, and an untrue or misleading insurance ad on radio is an unfair and deceptive act
3. C.Yes, because the ban on misleading advertising covers printed material only, not radio
4. D.No, but only the insurer named in the ad can be held responsible for it
Show answer
Answer: B. Section 3901.21(B) defines as unfair and deceptive making, publishing or placing before the public, in any publication, notice, letter, over any radio station or in any other way, an advertisement or statement about the business of insurance that is untrue, deceptive or misleading. Section 3901.20 bars any person from engaging in such a practice and says it applies to any person regardless of whether the person is licensed or required to be licensed. So being unlicensed is no defense, radio is expressly covered, and the company itself is responsible for its ad.
Source: Ohio outline 1.2: False advertising (3901.21(A), (B), (C), (D), (E), 3901.24; 3905.43); Ohio Rev. Code § 3901.21; Ohio Rev. Code § 3901.20
An Ohio life agent tells a prospect, "Buy the policy today and I'll send you a $300 check out of my commission." The prospect buys the policy and cashes the check. Under Ohio Rev. Code § 3911.20, who has violated the law?
1. A.No one, because an agent may share his own commission with a client
2. B.Only the agent, because policyholders cannot violate the insurance laws
3. C.Only the insurer, because it paid the commission the money came from
4. D.Both the agent who paid the rebate and the policyholder who knowingly received it
Show answer
Answer: D. Section 3911.20 forbids any life insurer, officer, agent or other person to pay or offer, directly or indirectly, any rebate of premium or valuable consideration as an inducement to insurance, and says no person shall knowingly receive such an inducement or accept any rebate not specified in the policy. Paying part of the commission back to the buyer is a rebate, whoever's money it is. Section 3999.05 also bars life agents from rebating (a fourth-degree misdemeanor under § 3999.99(C)), and the gift exception in § 3901.213(E) covers only noncash items.
Source: Ohio outline 1.2: Rebating (3911.20; 3933.01; 3999.05); Ohio Rev. Code § 3911.20; Ohio Rev. Code § 3999.05
Under Ohio Rev. Code § 3901.213(E) and Ohio Department of Insurance Bulletin 2022-04, an agent may give a consumer noncash gifts, meals or charitable donations in connection with the sale or retention of insurance, as long as the cost does not exceed:
1. A.$250 per policy year per term or calendar year
2. B.$50 per calendar year
3. C.$500 per household per calendar year
4. D.$100 per policy, one time only
Show answer
Answer: A. Section 3901.213(E), in force since 21 July 2022, allows noncash gifts, items or services, including meals and charitable donations on a consumer's behalf, up to an amount the superintendent sets per policy year per term or calendar year; Bulletin 2022-04 set that amount at $250. The offer must not be unfairly discriminatory, and the consumer cannot be required to buy, continue or renew a policy in exchange. The $50 per calendar year figure comes from the Department's earlier Bulletin 2019-05, issued before § 3901.213 was enacted.
Source: Ohio outline 1.2: Premium refunds and other incentives (3905.14(B)(32); 3999.05; Bulletins 2019-04 and 2019-05); Ohio Rev. Code § 3901.213; Ohio Department of Insurance Bulletin 2022-04
An Ohio life insurer believes in good faith, but cannot yet prove, that giving policyholders a free fitness tracker will improve their health. Under Ohio Rev. Code § 3901.213(D), how may it offer the device?
1. A.Only after the superintendent approves the device by adopting a formal rule
2. B.Without any conditions, because value-added services can never be rebates
3. C.Only if the cost of the device is added to each participant's premium
4. D.As a pilot or testing program of no more than one year, after notifying the superintendent, who has 21 days to object in writing
Show answer
Answer: D. Section 3901.213(D)(1) allows value-added products or services at no or reduced cost if they relate to the coverage, cost a reasonable amount compared with the premium, and are primarily designed for listed purposes such as enhancing health or encouraging behavior that reduces the risk of death or disability. When an insurer lacks sufficient evidence but has a good-faith belief, (D)(3) allows a pilot of no more than one year; it must notify the superintendent first and may proceed unless the superintendent objects in writing within 21 days. Availability must rest on documented, objective criteria and must not be unfairly discriminatory (D)(2).
Source: Ohio outline 1.2: Premium refunds and other incentives (3905.14(B)(32); 3999.05; Bulletins 2019-04 and 2019-05); Ohio Rev. Code § 3901.213
An insurer issues its refund check on a cancelled policy, and the agent is expected to pay the rest of the refund to the policyholder. Under Ohio Rev. Code § 3905.14(B)(32), the agent's refund is presumed not timely unless it is paid within:
1. A.60 days after the date of the insurer's refund check
2. B.30 days after the date of the insurer's refund check
3. C.90 days after the date the policy was cancelled
4. D.10 days after the date of the insurer's refund check
Show answer
Answer: B. Section 3905.14(B)(32) makes failing to fulfill a refund obligation in a timely manner a ground for license action and creates a rebuttable presumption that a refund is late unless paid within 30 days after the policyholder, applicant or insurer takes or requests the action causing it; 30 days after the insurer's refund check when the agent pays part of the refund; or 45 days after the agent's statement of account on which the refund first appears. The presumption can be rebutted if the policyholder consented to the delay or agreed to have the refund applied to other coverages.
Source: Ohio outline 1.2: Premium refunds and other incentives (3905.14(B)(32); 3999.05; Bulletins 2019-04 and 2019-05); Ohio Rev. Code § 3905.14
An Ohio health insurer receives notice of a claim. Under Ohio Adm. Code 3901-1-07, it must acknowledge pertinent communications about the claim within how many days of receiving the notice?
1. A.30 days
2. B.15 days
3. C.45 days
4. D.21 days
Show answer
Answer: B. Rule 3901-1-07(C)(2) treats as unfair failing to acknowledge pertinent communications about a claim, in writing or by other means noted in the claim file, within 15 days of receiving notice of the claim. The rule's days are calendar days, extended to the next business day when the last day falls on a weekend or holiday (C)(17)(d). The 21-day periods apply to replying to other communications and starting an investigation, and the conduct must occur with such frequency as to indicate a general business practice.
Source: Ohio outline 1.2: Unfair trade and claims settlement practices (3901.19-.26; 3901-1-07); Ohio Adm. Code 3901-1-07
The Ohio Department of Insurance sends a life insurer an inquiry about a beneficiary's complaint on a pending death claim. Under Ohio Adm. Code 3901-1-07, the insurer must make an appropriate reply within:
1. A.10 business days
2. B.15 days
3. C.30 days
4. D.21 days
Show answer
Answer: D. Rule 3901-1-07(C)(3) lists as unfair failing to make an appropriate reply within 21 days to all other pertinent communications and to any inquiries of the Department of Insurance about a claim. The 15-day limit is for acknowledging communications after notice of a claim and for sending the claimant the forms the insurer will require (C)(2) and (C)(5). The rule counts calendar days, not business days.
Source: Ohio outline 1.2: Unfair trade and claims settlement practices (3901.19-.26; 3901-1-07); Ohio Adm. Code 3901-1-07
An insurer receives a properly executed proof of loss on a disability income claim but needs more time to investigate. Under Ohio Adm. Code 3901-1-07, what must it do?
1. A.Tell the claimant within 21 days that it needs more time, and while the claim stays unsettled, send letters giving the reasons every 90 days
2. B.Pay the claim within 21 days, because no extension of time is allowed
3. C.Wait for the claimant to ask before giving any update on the claim
4. D.Tell the claimant within 45 days, then send status letters every 45 days
Show answer
Answer: A. Rule 3901-1-07(C)(12) requires the insurer to advise the first-party claimant of acceptance or rejection within 21 days after receiving a properly executed proof of loss, or within those 21 days notify the claimant that it needs more time. If the claim is still unsettled 90 days after that letter, it must send another letter, and then one every 90 days explaining why more time is needed, unless the delay is beyond its control. The 45-day status letters come from Rule 3901-1-54, which covers property and casualty claims.
Source: Ohio outline 1.2: Unfair trade and claims settlement practices (3901.19-.26; 3901-1-07); Ohio Adm. Code 3901-1-07
An insurer and a claimant agree on the settlement amount of a claim, and the claimant has no remaining conditions to perform. Under Ohio Adm. Code 3901-1-07, the insurer must pay the agreed amount no later than:
1. A.30 days after the insurer receives the agreement
2. B.10 days after the insurer accepts the claim
3. C.5 days after the insurer receives the agreement at the place payment is to be made from
4. D.15 days after the claimant signs the agreement
Show answer
Answer: C. Rule 3901-1-07(C)(16) treats as unfair failing to pay any amount finally agreed in settlement not later than 5 days from the insurer's receipt of the agreement at the place payment is to be made from, or from the claimant's performance of any condition in the agreement, whichever is later. The 10-day payment period after acceptance is in Rule 3901-1-54, which covers property and casualty claims. Days are calendar days under (C)(17)(d).
Source: Ohio outline 1.2: Unfair trade and claims settlement practices (3901.19-.26; 3901-1-07); Ohio Adm. Code 3901-1-07
A widow phones the agent who sold her late husband's life policy to report his death, but the agent does not tell the insurer for a week. Under Ohio Adm. Code 3901-1-07, when did the insurer's 15-day period to send her the required claim forms begin?
1. A.When the insurer's claim department first received a written claim
2. B.When the agent was told, because notice of claim to an agent of the insurer counts as notice to the insurer
3. C.When the insurer received a completed proof of loss
4. D.When the widow sent a certified copy of the death certificate
Show answer
Answer: B. Rule 3901-1-07(C)(17)(b) says notice of claim to an insurer includes notification given to an agent of the insurer. Under (C)(5), the insurer must send the claimant notice of all items, statements and forms it reasonably believes will be required within 15 days of receiving notice of the claim, or within a reasonable time if it does not yet know all the requirements. The agent's delay does not restart the clock, and proof of loss starts a different 21-day period.
Source: Ohio outline 1.2: Unfair trade and claims settlement practices (3901.19-.26; 3901-1-07); Ohio Adm. Code 3901-1-07
An Ohio policyholder gives proper identification and submits a written request to her insurer for access to the recorded personal information it holds about her. Under Ohio Rev. Code § 3904.08, the insurer must respond within:
1. A.21 business days from the date it receives the request
2. B.90 business days from the date it receives the request
3. C.15 calendar days from the date it receives the request
4. D.30 business days from the date it receives the request
Show answer
Answer: D. Section 3904.08(A) gives the insurer, agent or insurance support organization 30 business days to tell the person the nature and substance of the information, let her obtain a copy, identify anyone it disclosed the information to in the previous two years, and explain how to request a correction. Medical record information may be sent to her or to a medical professional she designates (3904.08(C)). The 21- and 90-business-day periods belong to adverse underwriting decisions under § 3904.10, and correction requests also get 30 business days (§ 3904.09).
Source: Ohio outline 1.2: Insurance information privacy (3901.44; 3904.01(R); 3904.04, 3904.14, 3965.01-.11); Ohio Rev. Code § 3904.08; Ohio Rev. Code § 3904.09
After underwriting, an insurer offers an Ohio applicant individual life coverage only at higher-than-standard rates. Under Chapter 3904, which statement is correct?
1. A.It is an adverse underwriting decision, so the insurer must give the specific reasons, or say they are available on written request, plus a summary of her rights
2. B.It is not an adverse underwriting decision, because the insurer did offer coverage
3. C.The insurer may disclose the reasons only to her personal physician
4. D.The insurer must explain the decision only if she files a complaint with the Department
Show answer
Answer: A. Section 3904.01(A)(1)(d) defines an offer to insure at higher than standard rates as an adverse underwriting decision, along with a declination or termination. Under § 3904.10, the insurer must give the specific reasons in writing or tell her she may get them on written request, with a summary of her rights; if she asks within 90 business days, it must answer within 21 business days with the reasons, the supporting information and its institutional sources. Only medical record information may be routed through a medical professional she designates.
Source: Ohio outline 1.2: Insurance information privacy (3901.44; 3904.01(R); 3904.04, 3904.14, 3965.01-.11); Ohio Rev. Code § 3904.01; Ohio Rev. Code § 3904.10
In underwriting a life application, an Ohio insurer will collect personal information from the applicant's physician and an inspection company, not just from the applicant. Under Ohio Rev. Code § 3904.04, when must it give the applicant the notice of information practices?
1. A.Within 30 days after the policy is issued
2. B.No later than the time collection of personal information from those other sources begins
3. C.At the time the policy is delivered
4. D.Only if the applicant asks for it in writing
Show answer
Answer: B. Section 3904.04(A)(1) requires the notice at policy delivery only when personal information is collected solely from the applicant or public records; when it is collected from other sources, the notice is due no later than when that collection begins. The notice must be in writing, though an abbreviated version is allowed if it says the full notice is available on request (3904.04(C)). For renewals, no notice is needed if one was given within the previous 24 months.
Source: Ohio outline 1.2: Insurance information privacy (3901.44; 3904.01(R); 3904.04, 3904.14, 3965.01-.11); Ohio Rev. Code § 3904.04
With purpose to defraud, a claimant submits a disability claim supported by a forged doctor's statement. The false or deceptive amount claimed is $5,000. Under Ohio Rev. Code § 2913.47, this insurance fraud is a:
1. A.Felony of the fourth degree
2. B.Felony of the third degree
3. C.Felony of the fifth degree
4. D.Misdemeanor of the first degree
Show answer
Answer: C. Under § 2913.47(C), insurance fraud is a first-degree misdemeanor unless the false or deceptive claim reaches $1,000. From $1,000 to under $7,500 it is a fifth-degree felony; from $7,500 to under $150,000 a fourth-degree felony; and at $150,000 or more a third-degree felony. The offense covers false or deceptive statements in applications as well as claims, and helping another prepare them (2913.47(B)).
Source: Ohio outline 1.2: Insurance fraud regulation (3999.21, .31, .37, .41, .42, .99; 2913.47, 3901.44); Ohio Rev. Code § 2913.47
An Ohio insurer comes to reasonably believe that one of its own agents put false health answers on applications to earn commissions. Under Ohio law, what must the insurer do?
1. A.Notify the affected policyholders before contacting any authority
2. B.Nothing, because fraud by its own agent is an internal personnel matter
3. C.Report it only if the premiums on the affected policies total more than $10,000
4. D.Notify the Department of Insurance; a person who reports suspected fraud without malice is protected from civil liability
Show answer
Answer: D. Section 3999.42(A) requires an insurer that reasonably believes a person is committing or has committed insurance fraud under § 2913.47 to notify the Department, and (D) says this applies to fraud by anyone, including the insurer's own agents. The only exception, in (C), is for fraud involving a claim of less than $1,000. Section 3999.31(B) shields those who report suspected fraud without malice from civil liability, absent fraud or bad faith.
Source: Ohio outline 1.2: Insurance fraud regulation (3999.21, .31, .37, .41, .42, .99; 2913.47, 3901.44); Ohio Rev. Code § 3999.42; Ohio Rev. Code § 3999.31

Where these questions come from: Ohio Life, Accident and Health agent exam outline (series 11-35, PSI bulletin updated 24 Mar 2026), section 1.2: State regulation (unfair trade and claims settlement practices, rebating and inducements, false advertising, misrepresentation, defamation, unfair discrimination, insurance fraud, insurance information privacy, consumer fees), part of section 1.0: Insurance Regulation (10%). See how we write questions.