State RegulationsNY specificDifficulty 3/5
A New York client owns a long-term care policy that remains fully in force. She buys an additional long-term care policy to broaden her coverage, and her existing policy is not lapsed, surrendered, or reduced. Under Reg 62, this transaction:
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Why C is correct
Under Reg 62 (11 NYCRR Part 52), what makes a New York long-term care sale a replacement is its effect on existing coverage: the rules attach when the new purchase will cause existing coverage to be lapsed, surrendered, or reduced. Here the first policy continues exactly as before, so the second purchase simply adds coverage rather than replacing anything. The definition turns on outcomes, so neither the number of policies held nor the delivery of new paperwork changes the analysis.
Why the other options are wrong
- A) Nothing in New York law limits a consumer to one long-term care policy; owning two is lawful and common when broadening coverage.
- B) Delivery of the new policy does not convert an addition into a replacement; the trigger is the effect on the existing coverage, which remains untouched.
- D) No insurer approval mechanism applies, because the transaction never enters the replacement regime when existing coverage continues unchanged.
Memory hook
No old policy harmed, no replacement triggered.