What does twisting in insurance refer to?

Twisting in insurance refers to the illegal practice of inducing a policyholder to lapse, forfeit, or switch their insurance policy by providing misleading or false information regarding the merits of one policy over another. This typically involves persuading the insured to change their policy without a legitimate reason or benefit to them, often motivated by the agent's desire for commissions on new sales. The insured might be misled into believing that they are obtaining better coverage or lower rates when, in fact, they are not.

Understanding twisting is critical for maintaining ethical standards in the insurance industry, as it protects consumers from deceptive practices that could lead to financial loss or inadequate coverage. This is particularly important in a regulated environment where consumer rights and transparency are essential.