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
Part;
2. Notify any other existing
insurer that may be affected by the proposed replacement within five (5)
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
(5) business days of a request from an existing insurer;
3. Be able to produce copies of the
notification regarding replacement required in §
4.4(B) of this Part,
indexed by producer, for at least five (5) 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 thirty (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 Appendix A or C which have been
included in a bulletin issued for that purpose and available on the
Department's website.
B.
In transactions where the replacing insurer and the existing insurer are the
same or subsidiaries or affiliates under common ownership or control 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 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 §
4.4(E) of this Part, 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 §
4.4(D) of
this Part; and
2. Within
ten (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 §
4.4(D) of this Part;
b. Provide the applicant with a toll-free
number to contact company personnel involved in the compliance function if such
is not the case; and
c. Stress the
importance of retaining copies of the sales material for future reference; and
3. Be able to produce a
copy of the letter or other verification in the policy file for at least five
(5) years after the termination or expiration of the policy or
contract.
