State RegulationsOH specificDifficulty 2/5
An Ohio agent takes an application for a new life policy that will replace the applicant's existing coverage. Under Ohio's replacement rule, when and how must the notice regarding replacements be handled?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
OAC 3901-6-05 requires the agent to present and read the notice regarding replacements to the applicant not later than at the time of taking the application. Both the applicant and the agent must sign it, and it must list every policy or annuity proposed to be replaced, identified by insurer, insured or annuitant, and policy number. This ensures the applicant hears the replacement disclosure before committing to the transaction.
Why the other options are wrong
- B) Mailing after submission defeats the rule; the notice must be presented and read no later than the time of taking the application.
- C) The signatures required are those of the applicant and the agent, not an underwriter, and the notice precedes delivery.
- D) The notice obligation applies to every proposed replacement; the age of the policy being replaced is irrelevant.
Memory hook
Read it, list it, both sign it — right at application.