State RegulationsGA specificDifficulty 3/5
Which description correctly distinguishes churning from twisting under Georgia unfair trade practice principles?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-6-4(b)(2), twisting is inducing a lapse, forfeiture, or surrender through misrepresentation — typically to move the client to another insurer. Churning is the concept of repeatedly replacing coverage within the same insurer, financing new premiums with the policy's existing cash values to generate commissions; Georgia has no standalone churning statute, so the conduct is disciplined through the unfair trade practices act.
Why the other options are wrong
- A) The two terms are reversed — churning keeps the client inside the same insurer, while twisting moves the policyholder to different coverage through surrender inducement.
- C) Policyholder consent does not legitimize churning; the misconduct lies in the self-serving misrepresentation and repeated replacement, which remains actionable under the unfair trade practices act.
- D) Both are sales-practice violations; neither arises out of claims handling under the unfair claims settlement article.
Memory hook
Churn = same company, cash value recycled; twist = switch to a new insurer.