An agent in Grand Rapids tells a policyowner that her current life insurance policy is about to become worthless so that she will let it lapse and buy a new policy from him, earning him a first-year commission. Which unfair trade practice has the agent committed?

Why B is correct

M.C.L. 500.2005(f) of the Michigan Insurance Code specifically prohibits misrepresenting facts to induce a policyowner to lapse, forfeit, exchange, convert, or surrender an existing policy — a practice commonly called twisting. The agent's false claim that the policy is about to become worthless is designed to destroy existing coverage for his own commission, and it subjects him to director action, civil fines, and possible license suspension or revocation.

Why the other options are wrong

• A) Boycott, coercion, and intimidation under M.C.L. 500.2012 requires pressure, threats, or concerted refusal to deal, not false statements about the client's own policy.
• C) Unfair discrimination under M.C.L. 500.2019 concerns charging unequal premiums to insureds of the same class and equal expectation of life, which did not occur here.
• D) Defamation under M.C.L. 500.2009 requires false, maliciously critical statements about a competitor's financial condition, and the agent's statements targeted the client's own policy instead.

Memory hook

Twisting = twisting the truth to kill the old policy and sell the new one.