Current through Register Vol. 39, No. 6, September 16, 2024
(a) Where
a replacement is involved in a transaction, the replacing insurer shall:
(1) Verify that the required forms are
received and are in compliance with the rules in this section.
(2) 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 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 business
days of a request from an existing insurer;
(3) Be able to produce copies of the
notification regarding replacement required in
11 NCAC
12 .0605(b), indexed by
producer, for at least five years or until the next regular examination by the
insurance department of a company's state of domicile, whichever is later;
and
(4) Provide to the policy or
contract owner notice of the right to return the policy or contract within 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 the notice required by
11 NCAC
12 .0611.
(b) In transactions where the replacing
insurer and the existing insurer are the same or subsidiaries or affiliates
under common ownership or control, 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 periods 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.
(c) 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
11 NCAC
12 .0605(e), the insurer
may:
(1) Require with each application a
statement signed by the producer that:
(A)
Represents that the producer used only company-approved sales material;
and
(B) States that copies of all
sales material were left with the applicant in accordance with
11 NCAC
12 .0605(d); and
(2) Within 10 days of the issuance
of the policy or contract:
(A) 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
11 NCAC
12 .0605(d);
(B) Provide the applicant with a toll free
number to contact the company; and
(C) Stress the importance of retaining copies
of the sales material for future reference.
(d) An insurer shall retain and be able to
produce a copy of the letter or other verification referenced in Part (c)(2)(A)
of this Rule in the policy or contract file for at least five years after the
termination or expiration of the policy or contract.
Authority
G.S.
58-2-40;
58-3-100;
58-3-115;
58-33-45;
58-33-75;
58-58-1;
58-58-40;
Eff. August
1, 2004;
Pursuant to
G.S.
150B-21.3A, rule is necessary without
substantive public interest Eff. May 1, 2018.
