Current through Register Vol. 42, No. 11, August 30, 2024
(1) Where a replacement is involved in the
transaction, the replacing insurer shall:
(a)
Verify that the required forms are received and are in compliance with this
chapter;
(b) Notify any other
existing insurer that may be affected by the proposed replacement within five
(5) business days of receipt of a completed application indicating replacement
or when the replacement is identified if not indicated on the application, and
mail a copy of the available illustration or policy summary for the proposed
policy or available disclosure document for the proposed contract within five
(5) business days of a request from an existing insurer;
(c) Be able to produce copies of the
notification regarding replacement required in Rule
482-1-133-.04(2),
indexed by producer, for at least five (5) years or until the next regular
examination by the insurance department of a company's state of domicile,
whichever is later; and
(d) Provide
to the policy or contract owner notice of the right to return the policy or
contract within thirty (30) days of the delivery of the contract and receive an
unconditional full refund of all premiums or considerations paid on it,
including any policy fees or charges or, in the case of a variable or market
value adjustment policy or contract, a payment of the cash surrender value
provided under the policy or contract plus the fees and other charges deducted
from the gross premiums or considerations or imposed under such policy or
contract; such notice may be included in Appendix A or C.
(2) In transactions where the replacing
insurer and the existing insurer are the same or subsidiaries or affiliates
under common ownership or control allow credit for the period of time that has
elapsed under the replaced policy's or contract's incontestability and suicide
period up to the face amount of the existing policy or contract. With regard to
financed purchases the credit may be limited to the amount the face amount of
the existing policy is reduced by the use of existing policy values to fund the
new policy or contract.
(3) If an
insurer prohibits the use of sales material other than that approved by the
company, as an alternative to the requirements made of an insurer pursuant to
Rule 482-1-133-.04(5),
the insurer may:
(a) Require with each
application a statement signed by the producer that:
1. Represents that the producer used only
company-approved sales material; and
2. States that copies of all sales material
were left with the applicant in accordance with
482-1-133-.04(4);
and
(b) Within ten (10)
days of the issuance of the policy or contract:
1. Notify the applicant by sending a letter
or by verbal communication with the applicant by a person whose duties are
separate from the marketing area of the insurer, that the producer has
represented that copies of all sales material have been left with the applicant
in accordance with Rule
482-1-133-.04(4);
2. Provide the applicant with a toll free
number to contact company personnel involved in the compliance function if such
is not the case; and
3. Stress the
importance of retaining copies of the sales material for future reference;
and
(c) Be able to
produce a copy of the letter or other verification in the policy file for at
least five (5) years after the termination or expiration of the policy or
contract.
Author: Commissioner of Insurance
Statutory Authority:
Code of Ala.
1975, §§
27-2-17.
