State RegulationsNC specificDifficulty 3/5
A North Carolina applicant replaces an existing life policy with a new policy issued by the same insurer. Under 11 NCAC 12 .0612(b), what must the insurer do regarding the replaced policy's incontestability and suicide periods?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under 11 NCAC 12 .0612(b), where the replacing insurer and the existing insurer are the same or affiliates, the insurer must credit the time already elapsed under the replaced policy's incontestability and suicide periods. This prevents an internal replacement from being used to reset those clocks against the policyholder.
Why the other options are wrong
- A) Restarting the periods is precisely what the rule forbids in a same-insurer replacement.
- B) The periods are not waived; the elapsed time is simply credited toward them.
- D) There is no suspension mechanism; the rule requires crediting elapsed time.
Memory hook
Same insurer, no clock reset — elapsed time carries over.