Illinois Life Producer State-designated Practice Exam

Which of the following could lead to the suspension or revocation of an insurance producer's license?

1. Inaccurate record-keeping

2. Participating in twisting

3. Failure to attend training

4. Undercharging clients

The correct answer is: Participating in twisting

Participating in twisting is a practice where an insurance producer persuades a policyholder to lapse or surrender an existing insurance policy in order to purchase a new one, often misrepresenting the benefits or terms of the new policy. This action is considered unethical and can be harmful to clients who may be misled about the advantages of the new insurance product. Regulatory bodies prioritize the protection of consumers, and twisting undermines this principle by potentially placing the insured in a worse financial position. As such, participating in twisting can lead to significant penalties, including the suspension or revocation of an insurance producer's license. This measure ensures that insurance producers adhere to ethical standards and maintain transparency in their professional conduct, which are critical for consumer trust and the integrity of the insurance industry.