What unethical practice involves persuading a policy owner to drop a policy for another?

The practice described is known as "twisting." This unethical behavior occurs when an insurance agent persuades a policyholder to cancel their existing insurance policy in favor of a policy from a different company, often misrepresenting the benefits or drawbacks of doing so. The intent is usually to benefit the agent through commissions or bonuses for the new policy, rather than to serve the best interests of the client. Twisting is prohibited by insurance regulations because it can lead to financial harm for consumers, who may end up with less coverage or incur unnecessary costs associated with newly initiated policies.

Understanding this concept is crucial for anyone involved in the insurance industry, as ethical standards are a key component of maintaining trust and integrity within the profession.