Before selling a Medigap policy that will replace an existing Medigap policy, the agent in California must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California's Medigap replacement rules require the agent to deliver an outline of coverage to the applicant and to obtain disclosure of any existing Medigap policy that would be replaced (CIC Sections 10192.17 and 10192.18). The disclosure lets the applicant compare benefits and prevents the improper practice of churning — repeatedly replacing Medigap policies to generate commissions without benefit to the consumer. The state treats replacement sales with heightened documentation duties. The same disclosure requirements apply whether the replacement moves the client from one Medigap carrier to another or from a Medigap policy into a Medicare Advantage plan, and the insurer must keep records of the transaction.
Why the other options are wrong
- B) Concealing the existing policy would defeat the anti-churning purpose of the replacement disclosure rules.
- C) Enrolling in Medicare Advantage would end Medigap coordination; the replacement rules govern Medigap-to-Medigap sales, not an MA tie-in.
- D) No replacement fee is authorized; the requirements are disclosure and outline-of-coverage delivery, not a charge to the applicant.
Memory hook
Replacing a Medigap? Full disclosure first. Outline of coverage in hand, existing policy on the record, churning is the crime.