State RegulationsGA specificDifficulty 3/5
Which statement correctly distinguishes churning from twisting under Georgia insurance law?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Churning is the practice of using an existing policy's cash values to fund additional coverage from the same insurer, typically through serial replacements that generate commissions. Twisting, by contrast, is the misrepresentation that induces a policyholder to lapse, forfeit, or surrender a policy, and it is expressly addressed in O.C.G.A. § 33-6-4(b)(2). Georgia has no standalone churning statute, but both practices are treated as unfair trade practices, and a signed replacement notice does not immunize either.
Why the other options are wrong
- A) The two definitions are swapped; same-insurer cash-value recycling is churning, and misrepresentation to induce surrender is twisting.
- B) A signed replacement notice is a procedural requirement, not a defense; both practices remain prohibited unfair trade practices.
- D) Neither practice is confined to a single product type; both can arise in life insurance and annuity transactions.
Memory hook
Churn stays home (same insurer), twist is the trip away — one recycles cash, the other lies.