Current through Register Vol. 56, No. 18, September 16, 2024
(a) Where a
replacement is involved in the transaction, the replacing insurer shall:
1. Verify that the required forms are
received and are in compliance with this subchapter;
2. Ascertain that the sales material and
illustrations used in the replacement meet the requirements of this subchapter
and are complete and accurate for the proposed policy or contract;
3. Notify any other existing insurer that may
be affected by the proposed replacement within five business days of receipt of
a completed application indicating replacement and/or accompanying statement
indicating replacement (or when the replacement is identified if not indicated
on the application), and mail to the insurer a copy of the available
illustration and/or policy summary for the proposed policy or available
disclosure document for the proposed contract within five business days of a
request from an existing insurer;
4. Be able to produce copies of the
notifications regarding replacement required in
11:4-2.3(b),
indexed by producer, for at least the immediately preceding five years or until
the next regular examination by the Department, whichever is later;
and
5. Provide to the policy or
contract owner notice of the right to return the policy or contract within 30
days of the delivery 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.
(b) Where the
replacing insurer is the same as or an affiliate of the existing insurer, the
replacing insurer shall 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 by which the face
amount of the existing policy is reduced by the use of existing policy values
to fund the new policy or contract.
(c) Each insurer replacing a policy or
contract shall maintain records in paper, photograph, microprocess, magnetic,
mechanical or electronic media or by any process that accurately reproduces the
actual document.
