State RegulationsMA specificDifficulty 1/5
Under 211 CMR 42.08 and M.G.L. c. 175, § 110(N)(3)(a), which transaction is a 'replacement' in individual accident and health insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
211 CMR 42.08 and M.G.L. c. 175, § 110(N)(3)(a) define a replacement by its effect on existing coverage: a new policy is a replacement when its purchase or issuance causes an existing accident and health policy to lapse, terminate, be converted to reduced paid-up or reduced benefits, or otherwise be materially changed. The definition is about churn in the applicant's coverage, not about routine renewals, riders that add value, or the ordinary use of an existing policy.
Why the other options are wrong
- A) A same-policy renewal keeps existing coverage intact; nothing lapses or shrinks, so it is not a replacement under 211 CMR 42.08.
- B) A rider added to the existing policy enhances rather than replaces it; no existing coverage is terminated or reduced.
- D) Filing a claim is the normal exercise of an existing contract and involves no new policy displacing old coverage.
Memory hook
New policy in, old policy out — that swap is the replacement the rules target.