State RegulationsNC specificDifficulty 2/5
A producer replaces a client's existing life policy with a new one from another insurer. What return right must the replacing insurer give the policyholder?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under 11 NCAC 12 .0612(a)(4), in a replacement transaction the replacing insurer must give notice of the right to return the policy within 30 days of delivery for an unconditional full refund of all premiums and considerations, including policy fees. The longer window exists because replacements carry extra disclosure duties and a higher risk that the client was misled about dropping existing coverage.
Why the other options are wrong
- A is wrong because the standard free look is 10 days and applies to ordinary sales; a replacement gets 30 days and a full refund without deductions.
- B is wrong because no 15-day return right exists; the replacement right runs 30 days from delivery.
- D is wrong because the replacement regulation specifically grants the 30-day return right; it does not end at delivery.
Memory hook
Replacement widens the window: 30 days, full refund, fees included.