Which of the following is not a prohibited practice?

• A. Accepting a premium for a policy
• B. Forging a signature
• C. Giving a gift of nominal value to an insurance applicant
• D. Misrepresenting policy terms

Answer: (C)

Small, nominal gifts to an insurance applicant are allowed because they’re simply a minor courtesy and not an inducement to buy. They should be truly small in value, not cash or cash-equivalent, not contingent on purchasing the policy, and not offered as a deal to influence the decision. That’s why this option is considered not a prohibited practice.

Forging a signature is fraud and deception, so it’s clearly prohibited. Misrepresenting policy terms is also deceptive and against regulations. Taking or accepting premiums in a way that amounts to an improper inducement or mishandling can cross into prohibited conduct as well, but the small nominal gift, when done properly, is the one not prohibited.