State RegulationsNY specificDifficulty 2/5
A New York agent is taking an application that will replace a consumer's existing life insurance policy. Under Reg 60 and N.Y. Ins. Law §2123, which of the following is the agent's duty?
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Why D is correct
Under Reg 60 (11 NYCRR Part 51) and N.Y. Ins. Law §2123(a), when a sale involves replacement, the agent must give the applicant the Important Notice Regarding Replacement, obtain the applicant's signed statement regarding replacement, and submit the notice and statement to the replacing insurer no later than the time the application is taken, and must notify all insurers involved. The applicant is also protected by a rescission right under §2123(a)(3)(D), allowing return of the new policy and reinstatement of the old one within the statutory window.
Why the other options are wrong
- A) The agent cannot pass replacement duties to the replacing insurer; identifying and documenting the replacement is the soliciting agent's responsibility at the point of sale.
- B) An oral suggestion is not enough; Reg 60 requires written disclosures and a signed replacement statement from the applicant.
- C) The agent must never cancel the existing policy; it stays in force until the new policy is delivered and the applicant completes the replacement decision.
Memory hook
Reg 60: signed statement plus Important Notice, submitted with the application.