Which of the following is NOT an example of a prohibited practice?

• A. Backdating
• B. Misrepresentation
• C. Rebating
• D. Twisting

Answer: (A)

Backdating isn’t inherently deceptive. It can be a legitimate administrative tool that sets the policy’s effective date to an earlier time, often to reflect the insured’s age as of that earlier date so the premium aligns with the correct age. The key is that the applicant’s truthfulness about age and health remains intact, and the backdating is within allowed limits (which many jurisdictions cap, for example, at a few months). When used within those rules, backdating is not a prohibited practice.

The other practices are clearly improper because they involve fraud or manipulation: misrepresentation means giving false information about health or age; rebating involves offering money or other inducements to encourage the purchase; twisting is pushing a replacement policy through improper tactics to benefit the producer or the insurer.