Current through Register Vol. XLI, No. 38, September 20, 2024
6.1. Where a replacement is involved in the
transaction, the replacing insurer shall:
a.
Verify that the required forms are received and are in compliance with this
rule;
b. 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;
c. Be
able to produce copies of the notification regarding replacement required in
subsection 4.2. of this rule, 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
d.
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.
6.2. 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.
6.3. 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 subsection 4.4. of this rule, the
insurer may:
a. Require with each application a
statement signed by the producer that:
1. The
producer used only company-approved sales material; and
2. Copies of all sales material were left with the
applicant in accordance with subsection 4.3. of this rule.
b. Within ten (10) days of the issuance of the
policy or contract:
1. Notify the applicant by
sending a letter to 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 subsection 4.3. of this rule;
2. Provide the applicant with a toll free number
to contact company personnel involved in the compliance function in case the
applicant did not receive copies of all sales material;
3. Stress the importance of retaining copies of
the sales material for future reference; and
4. 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.
