Rhode Island Code of Regulations
Title 230 - Department of Business Regulation
Chapter 20 - Insurance
Subchapter 25 - LIFE AND ANNUITIES
Part 4 - Life Insurance and Annuities Replacement (formerly Insurance Regulation 29) (230-RICR-20-25-4)
Section 230-RICR-20-25-4.10 - Violations and Penalties

Universal Citation: 230 RI Code of Rules 20 25 4.10

Current through September 18, 2024

A. Any failure to comply with this Part shall be considered a violation of R.I. Gen. Laws Chapter 27-29. Examples of violations include:

1. Any deceptive or misleading information set forth in sales material;

2. Failing to ask the applicant in completing the application the pertinent questions regarding the possibility of financing or replacement;

3. The intentional incorrect recording of an answer;

4. Advising an applicant to respond negatively to any question regarding replacement in order to prevent notice to the existing insurer; or

5. Advising a policy or contract owner to write directly to the company in such a way as to attempt to obscure the identity of the replacing producer or company.

B. Policy and contract owners have the right to replace existing life insurance policies or annuity contracts after indicating in or as a part of applications for new coverage that replacement is not their intention; however, patterns of such action by policy or contract owners of the same producer shall be deemed prima facie evidence of the producer's knowledge that replacement was intended in connection with the identified transactions, and these patterns of action shall be deemed prima facie evidence of the producer's intent to violate this Part.

C. Where it is determined that the requirements of this Part have not been met the replacing insurer shall provide to the policy owner an in-force illustration if available or policy summary for the replacement policy or available disclosure document for the replacement contract and the appropriate notice regarding replacements in Appendix A or C which have been included in a bulletin issued for that purpose and available on the Department's website.

D. Violations of this Part shall subject the violators to penalties that may include the revocation or suspension of a producer's or company's license, monetary fines and the forfeiture of any commissions or compensation paid to a producer as a result of the transaction in connection with which the violations occurred. In addition, where the Director has determined that the violations were material to the sale, the insurer may be required to make restitution, restore policy or contract values and pay interest at the rate defined in R.I. Gen. Laws § 27-4.5-4.1(d) on the amount refunded in cash.

Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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