State RegulationsCO specificDifficulty 1/5
Under Colorado Insurance Regulation 4-1-4, what record of a life insurance replacement must the replacing insurer maintain?
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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 replacing insurer to keep a record of each replacement transaction, including the replacement statement and notices, maintained so that the Colorado Division of Insurance can examine the insurer's replacement practices. This recordkeeping lets the Division verify that applicants received the required disclosures before replacing their coverage.
Why the other options are wrong
- B) The regulation requires a replacement-specific record beyond the ordinary underwriting file, so the Division can review the replacement itself.
- C) A commission statement shows compensation but not the required replacement documentation, notices, or applicant acknowledgments.
- D) The replacing insurer, not merely the producer, bears the recordkeeping duty, and the records must be available to the Division.
Memory hook
Every replacement leaves a paper trail the Division can read.