An employer purchases group life insurance for its employees through a payroll deduction plan, with no individual producer soliciting any employee, and a prior group arrangement ends as the new one begins. Under Tenn. Comp. R. & Regs. 0780-1-24, is the transaction a replacement?

Why D is correct

Tenn. Comp. R. & Regs. 0780-1-24 exempts group life purchased in the course of a payroll deduction plan where no producer individually solicits the employees, because the consumer-protection rationale of the replacement rule — an agent urging one person to displace personal coverage — is absent. The Tennessee Department of Commerce & Insurance applies the exemption to keep routine benefit-plan transitions out of the replacement framework.

Why the other options are wrong

• A) Displacement of a prior group arrangement does not trigger the rule where the exemption applies.
• B) Issuing new certificates is incidental; the exemption turns on the payroll-deduction, no-solicitation character of the transaction.
• C) Premium levels are not the test; the exemption depends on the structure of the sale rather than a certification about cost.

Memory hook

Payroll-deduction group with no one-on-one pitch: exempt from replacement rules.