A producer in Atlanta persuades a client to let her existing life policy lapse by falsely telling her the policy's benefits have 'expired,' so the client will buy a new policy from him and he can earn a fresh first-year commission. This practice is:

Why B is correct

Under O.C.G.A. § 33-6-4(b)(2), making any misrepresentation to induce a policyholder to lapse, forfeit, or surrender a policy is the Georgia statutory hook for twisting. The producer's false statement caused the lapse so a new sale could generate another commission, which is twisting and subject to Insurance Commissioner action.

Why the other options are wrong

• A) Churning is using an existing policy's cash values to buy more coverage from the same insurer; here an outside sale was induced by a false statement, which is twisting under O.C.G.A. § 33-6-4(b)(2).
• C) Defamation is a false statement about a competitor insurer's financial condition under O.C.G.A. § 33-6-4(b)(3); the client's own policy, not a rival insurer, was the subject.
• D) Controlled business concerns coverage on the licensee's own interests and is unrelated to inducing a lapse under O.C.G.A. § 33-6-4(b)(2).

Memory hook

Twist = talk someone out of a policy with lies; churn = milk the cash value with the same insurer.

Why C is correct

Under O.C.G.A. § 33-6-4(b)(2), misrepresenting a policy's terms to induce a policyholder to lapse, forfeit, or surrender it is twisting — Georgia's statutory hook for this replacement abuse. The producer's false statements about the old policy to force a switch fall directly within the prohibition, exposing him to sanctions from the Insurance Commissioner under the unfair trade practices article.

Why the other options are wrong

• A) Rebating involves giving premiums or other valuable consideration not specified in the contract under O.C.G.A. § 33-6-4(b)(8)(B) — no rebate occurred here.
• B) Defamation under O.C.G.A. § 33-6-4(b)(3) concerns false, maliciously critical statements about a competitor's financial condition, not misstatements to a policyholder.
• D) Coercion under O.C.G.A. § 33-6-4(b)(4) involves boycott or intimidation; the misconduct here is misrepresentation to induce surrender.

Memory hook

Twist to switch — misrepresent and lapse.