Question

When replacement is involved in a transaction, producers MUST do which of the following?

A) Leave with the applicant a comparison between the guaranteed dividends for the old and the new policies.
B) Send the existing insurer a notice regarding replacement, signed by the applicant.
C) Send the existing insurer a list of insurance to be replaced.
D) Leave with the applicant a notice regarding replacement and copies of all sales material prepared by the agent.

Answer 1

When replacement is involved in a transaction, producers must provide a comparison of dividends, send a notice to the existing insurer, and leave a notice and sales material with the applicant.

Step-by-step explanation:

When replacement is involved in a transaction, producers must do the following:

1. Leave with the applicant a comparison between the guaranteed dividends for the old and the new policies.
2. Send the existing insurer a notice regarding replacement, signed by the applicant.
3. Leave with the applicant a notice regarding replacement and copies of all sales material prepared by the agent.

These steps ensure transparency and protection for the applicant and the existing insurer, making sure that the replacement process is well-documented and clearly understood by all parties involved.