An agent tells a prospect that her current life policy is "nearly worthless" — which is untrue — to persuade her to lapse it and buy a new policy that pays the agent a larger commission. Which unfair marketing practice does this conduct represent?

Why D is correct

Twisting is the practice of inducing a policyholder to lapse, surrender, or replace an existing policy by misrepresenting its terms or value. The harm is twofold: the insured loses coverage she was misled into abandoning, and the replacement may cost more or carry new restrictions. Misrepresenting the existing policy's worth to trigger a replacement is the defining mark of twisting, and the New Jersey Department of Banking and Insurance treats it as an unfair trade practice by producers marketing in this state.

Why the other options are wrong

• A) Defamation targets a competitor or its financial condition; here the misrepresentation was about the prospect's own policy to force a replacement.
• B) No off-contract gift or premium discount was offered; the inducement was a false statement, which is twisting rather than rebating.
• C) False advertising involves communications to the public at large; a one-on-one misrepresentation to induce replacement is twisting.

Memory hook

Bad-mouth the old policy to force a new one — that is twisting, and it is punishable.