Question

Samantha, an agent for NED Insurance, routinely misrepresents policy provisions or fails to bring them up at all in her sales discussions with potential clients in an effort to make more sales. All of the following statements are likely true, EXCEPT:

Option 1: Samantha's actions may lead to legal and regulatory consequences for both her and NED Insurance.

Option 2: Clients who purchase policies from Samantha may have a false understanding of their coverage.

Option 3: Samantha's unethical practices will likely enhance the trust and credibility of NED Insurance in the long run.

Option 4: Samantha's behavior may result in financial harm to clients who rely on misrepresented policy information.

Answer 1

Samantha's unethical practices in insurance sales will not enhance the trust and credibility of NED Insurance but could lead to serious legal, financial, and reputational consequences.

Step-by-step explanation:

Among the statements about Samantha's unethical insurance practices, the one that is likely not true is that her actions will enhance the trust and credibility of NED Insurance in the long run. This is due to the implications of moral hazard and adverse selection in insurance markets. When an agent misrepresents policy provisions, it may lead to legal and regulatory consequences for both the agent and the insurance company, clients being misinformed about their coverage, and potential financial harm to these clients should they need to claim under the misunderstood policy terms.