Current through Register Vol. 28, No. 3, September 1, 2024
7.1 Each insurer that uses an agent of broker in a life insurance or annuity sale shall:
7.1.1 Require with or as a part of each completed application for life insurance or annuity, a statement signed by the agent or broker as to whether he or she knows replacement is or may be involved in the transaction.
7.1.2 Where a replacement is involved:
7.1.2.1 Require from the agent or broker with the application for life insurance or annuity:
7.1.2.1.1 A list of all the applicant's existing life insurance or annuities to be replaced, and
7.1.2.1.2 A copy of the Replacement Notice provided the applicant pursuant to section 5.2.1. Such existing life insurance or annuity shall be identified by name of insurer, insured and contract number. If a number has not been assigned by the existing insurer, alternative identification, such as an application or receipt number, shall be listed.
7.1.2.2 Send to each existing insurer a written communication advising of the replacement or proposed replacement of the policy. The communication should include the information obtained pursuant to section 7.1.2.1 above and a Summary or Ledger Statement describing the proposed new policy. This written communication shall be made within 7 working days of the date the application is received in the replacing insurer's home office, or the date the proposed life insurance policy or annuity contract is issued, whichever is sooner.
Amendment to section 7.1.2.2 by Bulletin No. 84-5: The amendment to Section 7(B)(2), dated June 1, 1984 is described in Bulletin No. 84-5. Prior to the June 1, 1984 amendment section 7.1.2.2 read:
7.2 Send to each existing insurer a written communication advising of the replacement or proposed replacement, the identification information obtained pursuant to section 7.1.2.1 and a Policy Summary or Ledger Statement containing policy data on the proposed life insurance as described by Regulation 1203 section 4.1.7 (Formerly Regulation 29). Life insurance cost index and equivalent level annual dividend figures need not be included in the policy summary or ledger statement. This written communication shall be made within 7 working days of the date the application is received in the replacing insurer's home office, or the date the proposed policy or contract is issued, whichever is sooner."
7.2.1 Each existing insurer, agent or broker that undertakes a conversion shall, within 20 days of the receipt of the written communication (Notice Concerning Replacement) on which the applicant indicates a request for policy information, furnish the policyholder with a Policy Summary or Ledger Statement for the existing life insurance or annuity. Such Policy Summary or Ledger Statement shall be completed in accordance with Regulation 1203 (Formerly Regulation 29) except that information relating to premiums, cash values, death benefits and dividends, if any, shall be computed from the current policy year of the existing life insurance or annuity.
7.2.1.1 The Policy Summary shall include the amount of any outstanding indebtedness, the sum of any dividend accumulations or additions, and may include any other information that is not in violation of any regulation or statute.
7.2.1.2 Life insurance cost index and equivalent level annual dividend figures need not be included in the Policy Summary.
7.2.2 The existing insurer may, but is not required to, furnish the information described in (3) above where the Notice Concerning Replacement (Delaware Form R, attached as Exhibit A) reflects the applicant declined to request policy information.
7.2.3 The replacing insurer may request the existing insurer to furnish it with a copy of the Summary or Ledger Statement used by the existing insurer in a conservation attempt.
7.3 The replacing insurer shall maintain evidence of the "Notice Regarding Replacement," the Policy Summary, and any Ledger Statements used, and a replacement register, cross indexed, by replacing agent and existing insurer to be replaced. The existing insurer shall maintain evidence of Policy Summaries or Ledger Statements used in any conservation. Evidence that all requirements were met shall be maintained for at least three years or until the conclusion of the next succeeding regular examination by the Insurance Department of its state of domicile, whichever is earlier.
7.4 The replacing insurer shall provide in its policy or in a separate written notice which is delivered with the policy that the applicant has a right to an unconditional refund of all premiums paid, which right may be exercised within a period of twenty days commencing from the date of delivery of the policy.
