State RegulationsTN specificDifficulty 2/5
In a Tennessee life insurance replacement, what role does the producer play with respect to the insurer that issued the existing policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Tenn. Comp. R. & Regs. 0780-1-24-.05 makes the producer the conduit for replacement information: by passing along the details of the proposed transaction, the producer enables the existing insurer to review the replacement and give the policyowner meaningful information about keeping the current coverage. This safeguard is administered under the Tennessee Department of Commerce & Insurance's replacement rule.
Why the other options are wrong
- A) The producer's duties are not confined to the replacing insurer; the existing insurer's ability to review depends on the producer furnishing the replacement information.
- B) Negotiating the old policy's surrender value is not a producer duty, and conditioning the new sale on such persuasion is foreign to the replacement framework.
- C) Withholding the transaction from the existing insurer contradicts the rule, whose entire design is to bring the existing insurer into the review.
Memory hook
The producer is the messenger: replacement details flow to the old insurer for review.