Rule 120-2-24-.01 Statutory AuthorityThis Regulation is made and promulgated by the Insurance Commissioner pursuant to the authority set forth in Section 33-2-9 and Section 33-6-12 of the Georgia Insurance Code. Show
Rule 120-2-24-.02 PurposeThe purpose of this Regulation is to protect the interests of life insurance policyholders by establishing minimum standards of conduct to be observed in the replacement or proposed replacement of existing life insurance. Rule 120-2-24-.03 DefinitionsThe following words and terms, when used in this Regulation shall have the following meanings, unless the context clearly indicates otherwise:
Rule 120-2-24-.04 ExemptionsUnless otherwise specifically included, this Regulation shall not apply to:
Rule 120-2-24-.05 Duties of Agents
Rule 120-2-24-.06 Duties of All InsurersEach insurer shall:
Rule 120-2-24-.07 Duties of Insurers That Use AgentsEach insurer that uses an agent in a life insurance or annuity sale shall:
Rule 120-2-24-.08 Duties of Replacing Insurers That Are Direct Response InsurersEach replacing insurer that is a direct response insurer shall:
Exhibit A. Replacement Notice EXHIBIT A REPLACEMENT NOTICE (Name, Address and Telephone Number of Company) REPLACING YOUR LIFE INSURANCE POLICY? Are you thinking about buying a new policy and discontinuing or changing an existing policy? If you are, your decision could be a good one - or a mistake. You will not know for sure unless you make a careful comparison of your existing policy and the proposed policy. Make sure you understand the facts. Georgia law gives you the right to obtain a policy summary statement from your existing insurer at any time. Ask the company or agent that sold you your existing policy to give you information about it. The reverse side contains a check list of some of the items you should consider in making your decision. TAKE TIME TO READ IT. Do not let one agent or insurer prevent you from obtaining information from another agent or insurer which may be to your advantage. Hear both sides before you decide. This way you can be sure you are making a decision that is in your best interest. [] If you wish a policy summary statement from your existing insurer, or insurers, check this box. We are required to notify your existing company that you may be replacing their policy. ORIGINAL TO APPLICANT - COPY TO REPLACING INSURER - COPY TO REPLACED INSURER [The bracketed information below is provided for the insurer and is not a part of the Replacement Notice.] [Note to insurers: information concerning existing coverage(s) can be required on this form, on the application, or on a separate form at the company's discretion.] [Direct response insurers may delete paragraph three, and the signature blanks and related information, and the reverse side of this Exhibit where the original solicitation contains the application for insurance and it appears in a newspaper, magazine or similar type publication, and still be in compliance with this Regulation.] ITEMS TO CONSIDER 1. If the policy coverages are basically similar, premiums for a new policy may be higher because rates increase as your age increases. 2. Cash values and dividends, if any, may grow slower under a new policy initially because of the initial costs of issuing a policy. 3. Your present insurance company may be able to make a change on terms which may be more favorable than if you replace existing insurance with new insurance. 4. If you borrow against an existing policy to pay premiums on a new policy, death benefits payable under your existing policy will be reduced by the amount of any unpaid loan, including unpaid interest. 5. Current interest rates are not guaranteed. Guaranteed interest rates are usually considerably lower than current rates. What rates are guaranteed? 6. Are premiums guaranteed or subject to change - up or down? 7. Participating policies pay dividends that may materially reduce the cost of insurance over the life of the contract. Dividends, however, are not guaranteed. 8. CAUTION, you are urged not to take action to terminate, assign, or alter your existing life insurance coverage until after you have been issued the new policy, examined it and have found it to be acceptable to you. and REMEMBER, you have ten (10) days following receipt of any individual life insurance policy to examine its contents. If you are not satisfied with it for any reason, you have the right to return it to the insurer at its home or branch office or to the agent through whom it was purchased, for a full refund of premium. Rule 120-2-24-.09 Relationship to Other Rules and RegulationsIf any portion of this Regulation is inconsistent with any provision of any other regulation dealing with life insurance or annuity marketing practices or disclosure, said inconsistent portion shall be interpreted so as to provide the greatest information or protection to the policyholder. Rule 120-2-24-.10 SeverabilityIf any section, term, or provision of these rules and regulations shall be adjudged invalid for any reason, such judgment shall not affect, impair, or invalidate any other section, term, or provision of these rules and regulations and the remaining sections, terms, and provisions shall be and remain in full force. Rule 120-2-24-.11 Penalties
What is the replacement regulation?(1) To regulate the activities of insurers and producers with respect to the replacement of existing life insurance and annuities. (2) To protect the interests of life insurance and annuity purchasers by establishing minimum standards of conduct to be observed in replacement or financed purchase transactions.
How must a replacing producer respond to an applicant wishing to replace existing life insurance quizlet?How must a replacing producer respond to an applicant wishing to replace existing life insurance? The producer must provide the applicant with a Notice Regarding Replacement.
What is the Florida replacement rule?1. The insurer must offer coverage under which the insurer is obligated to pay the replacement cost without reservation or holdback for any depreciation in value, whether or not the insured replaces the property. 2.
Is it advisable to replace the policy with another policy?Replacing an existing policy with another should be done for only one reason: The producer genuinely believes that canceling the policy (or reducing its values) to replace it with another policy is beneficial to the client and in the client's best interest.
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