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Terms in this set (96)

A producer who initiates an application will submit to the insurer, with or as part of the application, a statement signed by both the applicant and the producer as to whether the applicant owns existing, in-force policies or contracts on the same insured or annuitant. If the answer is "no," the producer's duties with respect to replacement are complete.

If the applicant answered "yes" to the question regarding existing coverage, the producer will present and read to the applicant, not later than at the time of taking the application, a Notice Regarding Replacements. However, no approval will be required when amendments to the notice are limited to the omission of references not applicable to the product being sold or replaced. The notice will be signed by both the applicant and the producer and left with the applicant. If the notice is presented electronically, the insurance company must mail the applicant a copy of the notice within 3 business days after receipt of the application.

The notice will list all life insurance policies or annuities proposed to be replaced, properly identified by name of insurer, the insured or annuitant, and policy or contract number if available; and will include a statement as to whether each policy or contract will be replaced or whether a policy will be used as a source of financing for the new policy or contract. If a policy or contract number has not been issued by the existing insurer, alternative identification, such as an application or receipt number, will be listed.

In connection with a replacement transaction the producer will leave with the applicant at the time an application for a new policy or contract is completed the original or a copy of all sales material. With respect to electronically presented sales material, it will be provided to the policy or contract owner in printed form no later than at the time of policy or contract delivery.
Each insurer will:

-Maintain a system of supervision and control to insure compliance replacement regulations

-Have the capacity to monitor each producer's life insurance policy and annuity contract replacements and make such records available to the Insurance Department upon request.

-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 indicating whether the applicant owns existing in-force policies or contracts on the same insured or annuitant;

-Require a Notice Regarding Replacement with each application for life insurance or an annuity that indicates an existing policy or contract is to be replaced;

-Notify the existing company of the intent to replace within 5 days of receipt of the application for replacement. Provide the existing company with a policy summary or illustration within 5 business days, upon request. Maintain copies of the Notice Regarding Replacement for at least 5 years.

-Provide a 30-day free look period for replacement transactions.

-When the applicant owns existing in-force policies or contracts on the sameinsured or annuitant, each insurer will be able to produce copies of any sales material, 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 years after the termination or expiration of the proposed policy or contract.
The purpose of regulation 129 is to provide standards for the disclosure of certain minimum information about annuity contracts to protect consumers and foster consumer education. This regulation specifies the minimum information which must be disclosed and the method for disclosing it in connection with the sale of annuity contracts. The goal of this chapter is to ensure that purchasers of annuity contracts understand certain basic features of annuity contracts.

Each applicant for an annuity must receive a buyer's guide and a disclosure document. The buyer's guide provides an overview of how annuities work, and the feature and benefits provided. The disclosure document provides specific information about the annuity for purchase, including:

-The generic name of the contract;
-The insurance company's name and address;
-A description of the contract and its benefits, emphasizing that its long-term nature;
-Explanation of guaranteed and non-guaranteed elements and how they work;
-Explanation of the introductory interest rate, and that interest rates may change from time to time and are not guaranteed;
-Guaranteed and non-guaranteed income options;
-Any value reductions caused by withdrawals or surrender;
-How values in the contract can be accessed;
-The death benefit, if available;
-A summary of the federal tax status considerations;
Impact of any rider;
-Specific dollar amount or percentage charges and fees; and
-Information about the current guaranteed interest rate for new contracts and a clear notice that the rate is subject to change.
-A Medicare supplement policy cannot exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate will not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.

-A Medicare supplement policy cannot indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.

-A Medicare supplement policy must provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible amount and copayment percentage factors. Premiums may be modified to correspond with such changes.

-Medicare supplement policies must be at least guaranteed renewable, but may be noncancelable.

-An insurer will neither cancel nor nonrenew a Medicare supplement policy or certificate for any reason other than nonpayment of premium or material misrepresentation.

-Termination of a Medicare supplement policy must be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or to payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.