Twisting in insurance involves which action?

• A. Replacing insurance to the detriment of the insured.
• B. Advocating for a different insurer with the insured's consent.
• C. Charging higher premiums.
• D. Nonrenewal of policy.

Answer: (A)

Twisting involves replacing an existing insurance policy with a new one in a way that harms the insured. It’s an unethical practice where the agent encourages or pressures the policyholder to cancel or lapse their current coverage and switch to another policy or insurer, often using misleading information about benefits, costs, or requirements. The result is typically higher costs, reduced benefits, or a loss of protections for the insured, sometimes for the agent’s or insurer’s gain.

This is why replacing coverage to the insured’s detriment is considered twisting. Recommending a different insurer with the insured’s informed consent and understanding can be legitimate, assuming there’s full disclosure and no deceptive tactics. Charging higher premiums and nonrenewal of a policy are not twisting by themselves; twisting centers on the deceptive replacement of existing coverage.