State RegulationsCO specificDifficulty 2/5
A producer in Denver asks which transactions fall outside Colorado's life insurance replacement rules under Reg. 4-1-4. The correct answer is:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Reg. 4-1-4 excludes credit life insurance and group life coverage that is not individually solicited from its replacement requirements. Individual life-to-life exchanges — whether whole life for universal life, term replacements, or replacements handled by a different producer — remain within the regulation's notice, statement, and recordkeeping rules.
Why the other options are wrong
- A) A whole life to universal life exchange is a classic individual replacement and is fully subject to Reg. 4-1-4.
- B) Replacing an individual term policy through a new application is an individual replacement covered by the regulation.
- D) Which producer handles the sale does not remove a transaction from the replacement rules; the individual transaction itself is covered.
Memory hook
Credit and untouched group skip the replacement paperwork.