Under California Insurance Code Section 10192.20, an agent who replaces an existing Medigap policy must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California's Medigap sales rules in Insurance Code Section 10192.20 address improper sales and replacement activity. An agent replacing an existing Medigap policy must comply with disclosure and replacement safeguards, including written notices that make the comparison between the old and new policies transparent so the beneficiary can judge whether the replacement is actually in their interest. These rules combat churning, in which agents induce unnecessary replacements to earn new commissions. Requiring the applicant's informed, signed consent is central to the protection, and violations can expose the agent to penalties.
Why the other options are wrong
- B) Silent replacement defeats the purpose of Section 10192.20. The statute mandates disclosure so the applicant understands exactly what is being given up and gained.
- C) No agent may guarantee future premium amounts. Medigap rates are subject to insurer rate changes over time and cannot be promised in a sales presentation.
- D) A signed application reflecting informed consent is required. An unsigned replacement sale would violate the disclosure and consent safeguards of the statute.
Memory hook
Medigap replacement = show your work: disclose the old plan, the new plan, and why the switch helps.