https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ATwistingDefinition:Twisting - Revision history2026-06-14T03:46:02ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Twisting&diff=10033&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-11T06:06:36Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>⚠️ '''Twisting''' is an unethical and typically illegal sales practice in which an [[Definition:Insurance agent | insurance agent]] or [[Definition:Insurance broker | broker]] persuades a [[Definition:Policyholder | policyholder]] to surrender, lapse, or replace an existing [[Definition:Insurance policy | insurance policy]] in favor of a new one primarily to generate a fresh [[Definition:Commission | commission]], without a genuine benefit to the insured. The practice is most commonly associated with [[Definition:Life insurance | life insurance]] and [[Definition:Annuity | annuity]] products, where [[Definition:Cash value | cash value]] accumulation and [[Definition:Surrender charge | surrender charges]] make replacement particularly costly for consumers. State [[Definition:Insurance regulation | insurance regulators]] across the United States classify twisting as a form of [[Definition:Unfair trade practice | unfair trade practice]] and impose penalties ranging from fines to license revocation.<br />
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🔍 A twisting scenario typically unfolds when a producer highlights superficial advantages of a new policy — such as a marginally lower [[Definition:Premium | premium]] or updated product features — while downplaying the tangible costs of abandoning the current contract. The policyholder may forfeit years of accumulated cash value, face new [[Definition:Contestability period | contestability periods]] or [[Definition:Suicide clause | suicide clauses]], and incur surrender penalties that erode any apparent savings. Regulators combat this through [[Definition:Replacement regulation | replacement regulations]] that require agents to complete comparison disclosure forms, notify the existing [[Definition:Insurance carrier | carrier]], and document that the switch serves the client's interest. Supervisory examinations and [[Definition:Market conduct examination | market conduct examinations]] may also flag patterns of excessive policy replacements tied to a single producer.<br />
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💡 The harm from twisting extends beyond individual policyholders. Carriers that lose in-force business to churning face increased [[Definition:Lapse rate | lapse rates]], distorted [[Definition:Persistency | persistency]] assumptions, and higher [[Definition:Acquisition cost | acquisition costs]] as they repeatedly issue new policies for the same risk. For the broader market, unchecked twisting erodes consumer trust in insurance products and the advisory process, making it harder for ethical producers to build lasting client relationships. Robust enforcement, mandatory replacement disclosures, and suitability standards — such as those modeled on the NAIC's [[Definition:Suitability in Annuity Transactions Model Regulation | Suitability in Annuity Transactions Model Regulation]] — serve as the industry's primary defenses against this damaging practice.<br />
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'''Related concepts:'''<br />
{{Div col|colwidth=20em}}<br />
* [[Definition:Churning]]<br />
* [[Definition:Unfair trade practice]]<br />
* [[Definition:Replacement regulation]]<br />
* [[Definition:Market conduct examination]]<br />
* [[Definition:Suitability]]<br />
* [[Definition:Policy lapse]]<br />
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