Texas Property and Casualty License Practice Exam 2026 – All-in-One Guide to Exam Success!

Twisting refers specifically to the unethical practice of using misrepresentation or misleading information to persuade policyholders to abandon their current insurance policy in favor of a new one, often with a different insurer. This practice is considered harmful as it undermines the trust in the insurance system and can lead to policyholders making poor decisions based on inaccurate or exaggerated claims about the benefits of switching coverage.

When an agent engages in twisting, they may provide false information about the current policy's features or the new policy's benefits. This could involve downplaying the advantages of the existing coverage or exaggerating the shortcomings of that coverage to entice the policyholder into making a switch. It is illegal and goes against ethical business practices in the insurance industry, leading to potential penalties for the agents involved.

The other options do not accurately capture the definition of twisting:

- Encouraging policyholders to file claims pertains to claims management rather than switching policies.

- Offering discounts to loyal customers is a standard business practice and not related to twisting.

- Adjusting claims to reduce company payout relates to claims handling and not the inducement to switch policies.

By identifying misrepresentation as the key element of twisting, it becomes clearer why this choice is the most accurate representation of the term in insurance terminology.