State RegulationsIL specificDifficulty 2/5
Under the Illinois replacement rule, when must a producer's replacement-disclosure duties be performed?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
50 Ill. Adm. Code 917 attaches the producer's duties to the application stage: the replacement statement must be obtained and the comparison information provided before or with the application, so the applicant weighs the costs and consequences before the existing coverage is put at risk. Retrospective disclosure would defeat the rule's purpose, because by then the old policy may already have lapsed or lost value.
Why the other options are wrong
- B) Post-delivery disclosure is too late; the regulation's protections operate at the decision point, not after it.
- C) The duties do not depend on a later cancellation request; they apply whenever the transaction may be a replacement.
- D) Enforcement correspondence from the Director of Insurance comes after a suspected violation; it is not the trigger for compliance.
Memory hook
Disclose at the application, not at the apology: timing is the protection.