What does illegal persuasion to drop existing coverage signify in insurance practices?

The term "twisting" in insurance refers to the unethical practice of persuading a policyholder to surrender or replace their existing insurance policy with a new one, often under misleading or fraudulent pretenses. This practice is typically driven by the personal gain of the agent or broker, rather than the best interest of the policyholder. Twisting can involve omitting critical information about the disadvantages of the new policy or the benefits of the current one, leading to potential financial loss for the consumer.

Understanding this term is crucial for recognizing one of the unethical practices in the insurance industry. Identifying twisting helps regulate and enforce standards of conduct within the industry to protect consumers from potentially harmful practices that could disrupt their financial security.