State RegulationsGA specificDifficulty 3/5
How does churning differ from twisting under Georgia unfair trade practices law?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Twisting is the statutory offense in O.C.G.A. § 33-6-4(b)(2): a misrepresentation made to induce a policyholder to lapse, forfeit, or surrender existing coverage. Churning, recognized at the concept level in Georgia, describes using a policy's accumulated cash values to finance additional coverage, typically from the same insurer, through repeated exchanges. The distinction lies in the mechanics: twisting deceives a customer out of coverage, while churning recycles value within one insurer's book to generate more premium.
Why the other options are wrong
- A) That reverses the concepts; churning typically stays within the same insurer, while twisting induces movement away from existing coverage.
- C) Written consent does not legitimize churning; the practice is judged by whether value is recycled through repeated exchanges, not by a signature.
- D) The twisting prohibition in § 33-6-4(b)(2) is not confined to health policies; it reaches any inducement to lapse, forfeit, or surrender.
Memory hook
Twisting moves you out; churning recycles cash within the same company.