What term refers to the unethical act of persuading a policyowner to drop a policy to sell another policy?

The term that describes the unethical act of persuading a policyowner to drop an existing policy in order to sell another policy is known as "twisting." This practice involves misleading the policyholder about the benefits of the new policy while downplaying or misrepresenting the value or coverage of the existing policy. Twisting is considered particularly egregious because it can result in financial harm to the policyholder, who may lose valuable benefits or coverage by canceling their current policy prematurely.

While misrepresentation, coercion, and rebating refer to different unethical practices in the insurance industry, they do not specifically capture the act of persuading a customer to lapse one policy for another. Misrepresentation involves providing false or misleading information about a policy, coercion refers to forcing someone to act against their will, and rebating involves offering something of value as an inducement to purchase insurance. Twisting uniquely encapsulates the act of encouraging a policyowner to discontinue a policy for the agent's benefit rather than the client’s best interest.