When a Medicare supplement (Medigap) policy is being purchased to replace an existing Medigap policy, California law requires:

Why A is correct

CIC Section 10192.18 imposes replacement disclosure requirements when a Medigap policy replaces another. The insurer must inform the applicant about the replacement, including comparing benefits, so the applicant can make an informed decision. These rules guard against churning and the unknowing loss of benefits, which are particular concerns with senior consumers.

Why the other options are wrong

• B) An individual is limited to one Medigap policy; replacement means the new policy takes the old one's place.
• C) There is no required one-year waiting period for replacement; the disclosure and timing rules govern instead.
• D) Replacing a Medigap policy does not affect Medicare Part B enrollment.

Memory hook

Replacing a Medigap policy? California requires replacement disclosure.

Why A is correct

California's Medigap rules require that when a policy replaces another Medigap policy, the applicant receives a replacement disclosure and an outline of coverage so the consumer can compare benefits and understand what is being given up. These disclosure rules, including the outline of coverage requirements of Insurance Code Section 10192.17 and the replacement provisions of Section 10192.18, protect seniors from unnecessary policy churning. This replacement disclosure obligation is part of the Medigap sales-practice material examined under AH-III.D.1e.

Why the other options are wrong

• B) The law requires disclosure, not a refund of past premiums on the replaced policy.
• C) No provision waives the new policy's first-year premium upon replacement.
• D) Replacing a Medigap policy has nothing to do with canceling Medicare Part B.

Memory hook

Swap a Medigap policy and you get a disclosure first, no fine print surprises.