State RegulationsCO specificDifficulty 2/5
A producer in Boulder is taking an application for a new life policy that will replace an existing policy. Under Colorado Insurance Regulation 4-1-4, what must the producer do at the time of application?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Colorado Insurance Regulation 4-1-4 requires the producer to submit a signed replacement statement with the application and to give the applicant a Notice Regarding Replacement that identifies the new and existing policies, summarizes the disadvantages of replacement, and is signed by both the applicant and the producer, with a copy left with the applicant.
Why the other options are wrong
- B) Replacement documentation is required at the time of application, not after the new policy is issued.
- C) No written approval from the Commissioner of Insurance is required before replacing coverage.
- D) The applicant's objection does not waive the replacement statement and notice requirements under Reg. 4-1-4.
Memory hook
Replace = statement with the application plus a signed notice in the client's hands.