State RegulationsTX specificDifficulty 1/5
What is the primary purpose of the Texas life insurance and annuity replacement statute?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 1114.001, the purposes of the replacement chapter are to regulate the activities of insurers and agents in replacement transactions, to protect purchasers by establishing minimum standards of conduct, and to assure that purchasers receive information with which a decision can be made in their own best interest. Practically, the statute is a disclosure and conduct regime, not a ban on replacement: a Texas agent may recommend a replacement if it is suitable, provided the required information is given and the paperwork is completed.
Why the other options are wrong
- B) is wrong because the chapter regulates how replacement is done rather than forbidding it.
- C) is wrong because voiding a policy is not a remedy the purpose clause creates.
- D) is wrong because nothing in the chapter obliges a policyowner to buy a replacement contract.
Memory hook
Chapter 1114 = disclose and compare, not prohibit.