State RegulationsGA specificDifficulty 3/5
A Georgia producer persuades a policyholder to let an existing life policy lapse by misrepresenting the policy's terms, so that the policyholder will buy a new policy from him instead. This practice is:
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Why C is correct
Under O.C.G.A. § 33-6-4(b)(2), misrepresenting a policy's terms to induce a policyholder to lapse, forfeit, or surrender it is twisting — Georgia's statutory hook for this replacement abuse. The producer's false statements about the old policy to force a switch fall directly within the prohibition, exposing him to sanctions from the Insurance Commissioner under the unfair trade practices article.
Why the other options are wrong
- A) Rebating involves giving premiums or other valuable consideration not specified in the contract under O.C.G.A. § 33-6-4(b)(8)(B) — no rebate occurred here.
- B) Defamation under O.C.G.A. § 33-6-4(b)(3) concerns false, maliciously critical statements about a competitor's financial condition, not misstatements to a policyholder.
- D) Coercion under O.C.G.A. § 33-6-4(b)(4) involves boycott or intimidation; the misconduct here is misrepresentation to induce surrender.
Memory hook
Twist to switch — misrepresent and lapse.