An insurer's representative makes an incomplete comparison of policy terms to persuade a policyholder in Durham to surrender an existing life policy and buy a new one. Under G.S. 58-3-115, this practice is:

Why D is correct

Under G.S. 58-3-115, no insurer may issue or circulate any written or oral statement that willfully misrepresents or makes an incomplete comparison of policy terms to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy — the practice known as twisting. A parallel producer-side prohibition appears at G.S. 58-33-75, with penalties running through G.S. 58-2-70 and G.S. 58-33-46.

Why the other options are wrong

• A) Rebating is offering an inducement not specified in the policy, such as a cash kickback — not a misleading comparison of terms.
• B) Defamation concerns false statements about a competitor's financial condition, not comparisons made to the client's own policy.
• C) Coercion involves unlawful pressure forcing a choice; an incomplete comparison aimed at inducing a surrender is twisting.

Memory hook

Incomplete comparison to force a swap = twisting.