A producer urges a client to let an existing life policy lapse and buy a new one, exaggerating the new policy's benefits to earn a larger commission, without disclosing the disadvantages of the switch. Under the unfair-trade-practice standards enforced in Colorado, this conduct is best described as:

Why C is correct

Twisting — inducing a policyholder to lapse, surrender, or exchange existing coverage through misrepresentation of the new policy's benefits or concealment of its disadvantages — is an unfair trade practice enforced by the Colorado Division of Insurance. Colorado's replacement rules reinforce the point by requiring a Notice Regarding Replacement that spells out the disadvantages of the switch. The client's freedom to decline is no defense when the inducement itself is built on misrepresentation.

Why the other options are wrong

• A) There is no permitted churning of this kind — a misrepresentation-driven lapse is an unfair practice whatever it is called.
• B) A different issuing company does not legitimize the conduct; disclosure of the disadvantages is what the law requires.
• D) A new policy does not automatically improve coverage; the representation used to induce the switch is what the law tests.

Memory hook

Twist the truth to force a switch, and the Division twists back.