State RegulationsGA specificDifficulty 1/5
Which practice is best described as churning?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Churning is the practice of financing additional coverage from the same insurer using the cash values of existing policies, often through repeated financed purchases that strip the original policy. Georgia law reaches the surrounding conduct — misrepresentation to induce surrender or lapse — through O.C.G.A. § 33-6-4(b)(2), and the Georgia Insurance Department treats same-insurer cash-value abuse as churning.
Why the other options are wrong
- A) Inducing surrender through misstatements to move business to a different insurer is twisting under O.C.G.A. § 33-6-4(b)(2), not churning.
- B) Falsely attacking a rival insurer's financial condition is defamation under O.C.G.A. § 33-6-4(b)(3).
- C) Offering premium rebates is rebating under O.C.G.A. § 33-6-4(b)(8)(B), a separate unfair practice.
Memory hook
Same insurer + cash value purchases = churning; different insurer + lies = twisting.