Which practice commonly involves initiating policy changes to generate increased compensation?

• A. Sliding
• B. Rebating
• C. Churning
• D. Twisting

Answer: (C)

Churning is when an agent starts policy changes primarily to boost their compensation by earning new commissions. It involves prompting the insured to replace or modify policies—often unnecessarily—so the agent can collect additional commissions, even if it doesn’t benefit the policyholder. This fits the scenario because the focus is on initiating changes to generate more pay for the agent rather than on genuinely improving the insured’s coverage. It’s typically unethical and often illegal, and regulators look for this pattern to protect consumers from unnecessary policy churn. Other tactics may involve misrepresentation or incentives to switch, but the key idea here is repeatedly triggering policy changes to increase compensation.