---
title: "What Is Unfair Trade Practices? Definition | Epic Life Glossary"
description: "Unfair trade practices are insurance sales and claims actions that state law bans, such as misrepresenting policy terms, false advertising, and unfair..."
url: https://epicline.preview.multisites.ai/glossary/unfair-trade-practices
publisher: Epic Life Group
apply: https://epicline.preview.multisites.ai/apply
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---

Compliance and regulation

# Unfair Trade Practices

Unfair trade practices are insurance sales and claims actions that state law bans, such as misrepresenting policy terms, false advertising, and unfair discrimination. Most states base their laws on an NAIC model act.

## Why it matters

State insurance departments enforce these laws. Examples include misleading comparisons, false statements about benefits, and twisting, which means pushing a customer to drop a policy by using misleading claims. Penalties can include fines, license action, and orders to repay consumers. The exact list and penalties vary by state. Families who think an agent misled them can file a complaint with their state department of insurance.

Source: [naic.org](https://content.naic.org/sites/default/files/model-law-880.pdf)

[Read next, for agentsLife insurance chargebacks explained: how they work and how to protect your cash flow](https://epicline.preview.multisites.ai/guides/life-insurance-chargebacks)

## Where we use this term

-   [Building an insurance agency: how overrides and downlines work, and what is legal](https://epicline.preview.multisites.ai/guides/building-an-insurance-agency-overrides-downlines)

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