Which of the following is a consequence of twisting?

Twisting refers to the practice of persuading a policyholder to replace an existing insurance policy with a new one, often for the sole purpose of earning higher commissions, rather than for the benefit of the client. This can lead to several negative consequences for both clients and insurance professionals.

Increased regulatory scrutiny is a key consequence of twisting. Regulatory bodies monitor insurance practices to protect consumers from potentially harmful practices like twisting. When twisting occurs, it often raises red flags, prompting regulators to investigate the activities of the agents involved and the companies they represent. This scrutiny can result in penalties, loss of licenses, or stricter regulations, which ultimately aim to ensure ethical behavior and the best interests of consumers are upheld.

While twisting may seem to offer immediate benefits such as higher commission earnings, it fundamentally undermines the trust and satisfaction of clients, leading to poorer client relationships over time. Hence, the focus on regulatory scrutiny accurately captures the broader implications of twisting within the insurance industry.