Under Pennsylvania law, what is twisting?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Twisting is defined in 40 P.S. § 473: it occurs when a producer induces a policyholder to lapse, forfeit, surrender, or convert an existing policy in order to purchase a new one, based on an incomplete or false comparison, and to the detriment of the policyholder. The harm Pennsylvania targets is the policyholder's loss from dropping accumulated coverage for the producer's new-commission benefit. A producer found to have twisted a policy faces enforcement by the Pennsylvania Insurance Department under the Unfair Insurance Practices Act at 40 P.S. § 1171.5.
Why the other options are wrong
- A) Slow remittance of premium is a fiduciary-funds problem, not twisting; twisting concerns inducing a policy switch to the policyholder's detriment.
- B) Unverified advertising figures implicate false advertising rules, but twisting is defined by induced replacement, not by advertising content.
- C) Sharing confidential client information is a privacy issue governed by Pennsylvania's privacy regulations, not the twisting prohibition.
Memory hook
Twist it and toss it: dump the old policy to your detriment and the producer's commission, that is twisting.