A producer persuades a Colorado Springs policyholder to let an existing life policy lapse and replace it with a new one by falsely claiming that the new policy's cash value doubles immediately. What violation has occurred?

Why D is correct

C.R.S. § 10-3-1104(1)(a) expressly prohibits misrepresenting policy values to induce a policyholder to lapse, forfeit, exchange, convert, or surrender existing insurance — the provision Colorado producers know as the anti-twisting hook. Falsely inflating the new policy's cash value to trigger the replacement is precisely the conduct the subsection reaches, independent of any rebate or competitor statement.

Why the other options are wrong

• A) Nothing of value was returned to the insured as an inducement; the violation is the misrepresentation, not a rebate.
• B) The policies were written on a client, not on the producer's own or affiliated risks, so controlled business is not the issue.
• C) Defamation concerns statements about a competitor's financial condition, not inflated claims about the producer's own product.

Memory hook

Twisting = a lie that kills the old policy to birth the new one.