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-20-25-4.5 - Duties of Insurers that Use Producers

Universal Citation: 230 RI Code of Rules 20 25 4.5

Current through September 18, 2024

A. Each insurer shall:

1. Maintain a system of supervision and control to insure compliance with the requirements of this Part that shall include at least the following:
a. Inform its producers of the requirements of this Part and incorporate the requirements of this Part into all relevant producer training manuals prepared by the insurer;

b. Provide to each producer a written statement of the company's position with respect to the acceptability of replacements providing guidance to its producer as to the appropriateness of these transactions;

c. A system to review the appropriateness of each replacement transaction that the producer does not indicate is in accord with § 4.5(A)(1)(b) of this Part above;

d. Procedures to confirm that the requirements of this Part have been met; and

e. Procedures to detect transactions that are replacements of existing policies or contracts by the existing insurer, but that have not been reported as such by the applicant or producer. Compliance with this Part may include, but shall not be limited to, systematic customer surveys, interviews, confirmation letters, or programs of internal monitoring;

B. Have the capacity to monitor each producer's life insurance policy and annuity contract replacements for that insurer, and shall produce, upon request, and make such records available to the Director. The capacity to monitor shall include the ability to produce records for each producer's:

1. Life replacements, including financed purchases, as a percentage of the producer's total annual sales for life insurance;

2. Number of lapses of policies by the producer as a percentage of the producer's total annual sales for life insurance;

3. Annuity contract replacements as a percentage of the producer's total annual annuity contract sales;

4. Number of transactions that are unreported replacements of existing policies or contracts by the existing insurer detected by the company's monitoring system as required by § 4.5(A)(1)(e) of this Part; and

5. Replacements, indexed by replacing producer and existing insurer;

C. Require with or as a part of each application for life insurance or an annuity a signed statement by both the applicant and the producer as to whether the applicant has existing policies or contracts;

D. Require with each application for life insurance or an annuity that indicates an existing policy or contract a completed notice regarding replacements as contained in Appendix A which has been included in a bulletin issued for that purpose and available on the Department's website;

E. When the applicant has existing policies or contracts, each insurer shall be able to produce copies of any sales material required by § 4.4(E) of this Part, the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased, and the producer's and applicant's signed statements with respect to financing and replacement for at least five (5) years after the termination or expiration of the proposed policy or contract;

F. Ascertain that the sales material and illustrations required by § 4.4(E) of this Part meet the requirements of this Part and are complete and accurate for the proposed policy or contract;

G. If an application does not meet the requirements of this Part, notify the producer and applicant and fulfill the outstanding requirements; and

H. Maintains records in paper, photograph, microprocess, magnetic, mechanical or electronic media or by any process that accurately reproduces the actual document.

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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