When a Michigan applicant indicates that a life insurance purchase will replace existing coverage, which duty does the producer have under Michigan's replacement rules?

Why D is correct

Michigan Administrative Code R 500.602 requires the producer in a replacement transaction to obtain a signed applicant statement on whether replacement is involved, to present the prescribed Notice to Applicants Regarding Replacement of Life Insurance and the information statement no later than at application time and leave them with the applicant, to leave copies of all sales proposals, and to submit the required materials and the names of the existing insurers to the replacing insurer. The timing rule exists so the applicant can weigh the comparison before committing, not after the deal is done.

Why the other options are wrong

• A) The existing insurer's consent is never a prerequisite for a replacement; the rules require disclosure, not permission.
• B) The notice and information statement must be presented no later than at application time, not after the policy is approved.
• C) Sending the applicant's medical records to the existing insurer is not part of the producer's replacement duties.

Memory hook

Notice at application, not after approval.