State RegulationsMA specificDifficulty 2/5
A producer recommends replacing a client's existing individual health policy with a new one. Under 211 CMR 42.08 and 211 CMR 42.11, what is required in connection with that replacement?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The Massachusetts replacement framework for individual accident and health insurance — M.G.L. c. 175, § 110(N)(3)(a), implemented by 211 CMR 42.08 and 42.11 — centers on disclosure to the applicant. The applicant must receive notice and a comparison of the existing and proposed coverage so that a decision to switch is informed rather than driven by a producer's interest in a new sale. Replacements are not forbidden, but they must be transparent, and the paper trail exists precisely so the applicant can see what would be given up.
Why the other options are wrong
- B) Guaranteed renewability of the existing policy does not waive the disclosure duties; 211 CMR 42.08 and 42.11 apply to every replacement transaction.
- C) The existing insurer has no approval right over a competitor's sale; the rules require disclosure to the applicant, not consent from the old carrier.
- D) Applicant disclosure is the heart of the replacement rules; internal notice alone does not satisfy 211 CMR 42.08 and 42.11.
Memory hook
Compare before you replace: notice and comparison go to the applicant first.