What is "twisting" in insurance, and why is it unethical?

Twisting refers to the unethical practice of persuading a policyholder to replace their existing insurance policy with a new one, primarily for the financial gain of the producer rather than the benefit of the client. This typically occurs without sufficient justification regarding the actual advantages of the new policy. The unethical nature of twisting lies in its potential to mislead clients about the value of their current coverage while promoting a new policy that may not meet their needs as effectively.

This practice can be harmful to clients, as it may result in the loss of important protections or benefits that were present in the original policy, or lead to increased costs and insufficient coverage. By prioritizing their own commission or financial interests over the welfare of the insured, the producer undermines the trust that is essential in the insurance industry. Ethical conduct demands that producers provide transparent and accurate information, ensuring that clients make informed decisions that genuinely serve their interests, rather than those of the producer.