State RegulationsFL specificDifficulty 2/5
An agent tells a policyowner that her current insurer is about to stop doing business in Florida and that her policy will soon be worthless, inducing her to replace it with a policy from the agent's insurer. The statements are false. This practice is
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Fla. Stat. 626.9541(1)(l),(aa), twisting is making misleading statements or misrepresenting the terms or status of an existing policy in order to induce a policyowner to replace it. Here the false claim that the existing insurer was abandoning Florida was the lever used to force the replacement - the classic twisting fact pattern and an unfair trade practice.
Why the other options are wrong
- B) Churning stays inside the same policy; no replacement of one contract with another is involved here.
- C) No portion of the commission was returned to the consumer; the vice in this scenario is misrepresentation.
- D) No supplementary charge was added to the sale; the misconduct concerns inducing the replacement.
Memory hook
False story + forced swap = twisting.