An existing insurer sends a verification letter to a North Carolina replacing insurer in a replacement transaction. Under 11 NCAC 12 .0612(d), how long must the replacing insurer keep the verification letter?

Why B is correct

Under 11 NCAC 12 .0612(d), a replacing insurer must retain verification letters for 5 years after the policy terminates. This runs parallel to the rule's core record duty in .0612(a)(3), which requires Notices Regarding Replacement to be producible for at least 5 years or until the next regular examination by the domicile regulator, whichever is later, indexed by producer.

Why the other options are wrong

• A) Two years understates the required period; verification letters are kept five years after termination.
• C) Five business days is the existing-insurer notification and copy-request deadline in .0612(a)(2), not a retention period.
• D) Retention is measured from policy termination, not from the first anniversary.

Memory hook

Verification letters ride five years past termination.

Why A is correct

Under 11 NCAC 12 .0612(a),(d), the replacing insurer must be able to produce copies of the Notice Regarding Replacement, indexed by producer, for at least 5 years or until the next regular examination by the domicile regulator, whichever is later. Verification letters are kept 5 years after policy termination.

Why the other options are wrong

• B) Three years is shorter than the rule's five-year minimum, and the index is by producer, not policy number.
• C) Retention runs at least five years, far beyond the first policy anniversary.
• D) The rule sets a minimum period tied to the next domicile examination, not a permanent retention duty.

Memory hook

Keep replacement notices 5 years, filed by producer.