Inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is known as what illegal act?

The act of inducing an insured to lapse, forfeit, or surrender an insurance policy through misrepresentation is referred to as "twisting." Twisting typically involves misleading an insured into believing that a new policy will be more beneficial than their existing one, leading them to surrender their current coverage. This type of misconduct takes advantage of the insured's trust and can lead to financial loss, thereby violating insurance laws aimed at protecting consumers.

In insurance practices, this illegal activity is particularly scrutinized because it undermines the integrity of the insurance market and the financial security of policyholders. Whereas other terms relate to different types of unethical practices—such as churning, which involves convincing a policyholder to replace an insurance policy with a new one for the agent's benefit—twisting is specifically associated with misrepresentation and manipulation of an insured's decision-making process. Understanding this distinction is vital for identifying and preventing unethical behavior in the insurance field.