State RegulationsNC specificDifficulty 2/5
A North Carolina insurer receives a completed life application indicating that the applicant intends to replace existing coverage. Under 11 NCAC 12 .0612, within how long must the replacing insurer notify each affected existing insurer?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under 11 NCAC 12 .0612(a)(2), the replacing insurer must notify each affected existing insurer within five business days of receiving a completed application indicating replacement, or otherwise upon identifying that a replacement is involved, and must mail the illustration or policy summary within five business days of an existing insurer's request. Prompt notice lets the existing insurer protect its policyholder's interests.
Why the other options are wrong
- A) The 30-day period is the policyholder's return right in a replacement transaction, not the deadline for notifying existing insurers.
- B) The 15-day figure is the appointment filing deadline and has nothing to do with replacement notice; the notice duty is keyed to five business days.
- C) The notification duty is mandatory under the replacement regulation and does not depend on any request from the applicant.
Memory hook
Replacement notice: five business days to tell the old insurer.