A New York agent sells a client a new Medicare supplement policy that will replace the client's existing Medicare supplement policy issued by a different insurer. Which party must be notified of the replacement?

Why D is correct

Under the New York Insurance Law's Medicare supplement replacement rules, when a new policy will replace existing coverage, the insurer whose policy is being replaced must be notified of the transaction. This notice lets the existing insurer identify the policy being dropped and communicate with the insured, which helps the Department of Financial Services police twisting and churning and helps ensure the insured does not lose the old coverage before the new coverage is actually in place.

Why the other options are wrong

• A) The Superintendent of Financial Services regulates replacement practices generally but does not pre-approve each individual replacement transaction.
• B) No spousal consent requirement exists under New York's Medicare supplement replacement rules; the applicant's own decision, supported by the required disclosures, governs.
• C) Medicare is not a party to the replacement and does not cancel federal benefits because one supplement policy replaces another.

Memory hook

When a new policy steps in, the insurer being stepped away from must be told.