To induce a policyholder in Greensboro to surrender an existing life policy and buy a new one, a producer makes an incomplete comparison of the two contracts' terms. This conduct constitutes:

Why D is correct

Under G.S. 58-33-75, no producer may make any written or oral statement that willfully misrepresents the terms of a policy or makes an incomplete comparison to induce a policyholder to lapse, forfeit, surrender, exchange, or convert a policy. This is twisting, and penalties run through the civil penalty provisions of G.S. 58-2-70 and license action under G.S. 58-33-46.

Why the other options are wrong

• A is wrong because rebating involves giving something of value not specified in the policy; this scenario involves misrepresentation through an incomplete comparison, and nothing of value was given.
• B is wrong because defamation concerns false statements about a competitor's financial condition or business, not misleading comparisons made to induce a surrender.
• C is wrong because G.S. 58-2-180 addresses willful false statements under oath or subscription in required financial statements, not sales misrepresentations.

Memory hook

Twisting twists the truth to make an old policy look bad enough to surrender.

Why A is correct

Under G.S. 58-33-75, no licensee may make any written or oral statement that willfully misrepresents the terms of a policy or makes an incomplete comparison to induce a policyholder to lapse, surrender, exchange, or convert a policy. This is twisting, and it exposes the producer to civil penalties under G.S. 58-2-70 and license action under G.S. 58-33-46.

Why the other options are wrong

• B) Rebating involves giving or accepting valuable consideration not specified in the policy under G.S. 58-33-85; no inducement of value is present here.
• C) The statute expressly covers oral as well as written statements, so an oral incomplete comparison is still twisting.
• D) Unfair claims settlement practices under G.S. 58-63-15(11) concern the handling and payment of claims, not sales conduct.

Memory hook

Twisting = willful misrepresentation or half a comparison to force a surrender.

Why D is correct

Under G.S. 58-3-115 (with the parallel producer provision at G.S. 58-33-75), no insurer or licensee may make any written or oral statement that willfully misrepresents or makes an incomplete comparison of policy terms to induce a policyholder to lapse, forfeit, surrender, exchange, or convert a policy — the practice known as twisting. Penalties run through the general civil penalty provision at G.S. 58-2-70 and license action under G.S. 58-33-46.

Why the other options are wrong

• A) Rebating involves giving or accepting an inducement such as a premium rebate not specified in the policy; no inducement is described here.
• B) G.S. 58-63-20 targets false information and false advertising generally, not the incomplete-comparison lapse inducement that defines twisting.
• C) The producer is acting in a licensed capacity; the wrong is the misleading comparison, not unlicensed activity.

Memory hook

Shady switch talk is twisting — incomplete comparisons induce the lapse.