State RegulationsCO specificDifficulty 1/5
A producer in Colorado Springs completes a signed replacement statement for a client purchasing a new life policy. Under Colorado Insurance Regulation 4-1-4, when must that statement be submitted?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Colorado Insurance Regulation 4-1-4 requires the producer to submit a signed replacement statement as part of the application for the new policy. The replacing insurer therefore knows at the moment of application that existing coverage may be replaced and can take the steps the regulation requires, including notifying the existing insurer. Deferring the statement until after surrender or delivery would defeat the regulation's early-warning purpose.
Why the other options are wrong
- A) The statement goes forward even if the old policy is never surrendered; waiting for surrender defeats the regulation's early-warning purpose.
- B) The duty is not triggered by a request from the existing insurer; it attaches whenever the transaction is a replacement.
- D) Attaching the statement to the first premium payment is too late — the replacing insurer must know at application.
Memory hook
Statement rides with the application — the new insurer learns of the switch on day one.