Revocation of agent’s license

An insurance agent can have his or her licensed revoked or suspended for number of reasons, including fraud, embezzlement, and forgery. Insurance agents can also lose their license for an activity the insurance industry refers to as twisting. Twisting happens when your agent improperly pressures you into dropping your existing insurance so he can sell you a new policy. His primary motivation for selling you the new policy may be so that he can get the first year commission on the new policy. To motivate agents to bring in new business, insurance companies usually offer a high first year commission that is dramatically reduced for the second and later years of the policy. However, if the policies are relatively similar, there are disadvantages to you in canceling your old policy and buying a new policy. For example, the incontestable (time limit on certain defenses) and suicide periods in your old policy may have expired. They will start anew with your new policy, which is not to your advantage.
Another practice that can result in the agent forfeiting his or her license is rebating. This occurs when an agent forks over to you, directly or indirectly, a chunk of his commission or its equivalent, such as a rebate of the policy fee, a valuable gift (such as prime tickets to a big game) to induce you to purchase a policy from him.

If you believe your life or health insurance agent has engaged in fraud, embezzlement, forgery, twisting, rebating, has made an inappropriate or inaccurate sales presentation to you or is not properly licensed with your state insurance department and, if necessary, with the NASD, you should contact an attorney to protect your rights.