What type of illegal activity is occurring if Agent Chris suggests that a policyholder purchase a new policy with values from an existing policy to increase his commission?

Churning refers to the practice where an insurance agent encourages a policyholder to replace or renew an existing policy with a new one to generate higher commissions for themselves, rather than for the benefit of the policyholder. In this scenario, Agent Chris is suggesting that the policyholder buy a new policy using the values from the existing policy solely to increase his own commission. This not only serves the agent's financial interest but can also harm the policyholder, who may end up with less valuable coverage.

Churning is considered unethical and potentially illegal because it prioritizes the agent's financial gain over the interests of the client. Agents are expected to provide recommendations that are in the best interest of their clients, and churning undermines that responsibility.

In contrast, twisting involves misrepresenting or failing to disclose information about a policy in order to persuade a client to switch policies, which is not the primary focus in this case. Steering refers to guiding a client towards a particular product or company for dishonest reasons, while coercion involves pressuring someone into making a decision, which also does not apply to the scenario described. Thus, the situation clearly aligns with the definition of churning.