State RegulationsTX specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A Texas agent persuades a policyowner in Dallas to surrender an existing life policy and buy a new one from another insurer. If the owner returns the replacing policy within 30 days of its delivery, what must the replacing insurer refund under TIC 1114.053(e)?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under TIC 1114.053(e), the replacing insurer must give the owner notice of the right to return the policy or contract within 30 days of delivery and to receive an unconditional full refund of all premiums or considerations paid, including any policy fees or charges. Only where the replaced product is a variable or market value adjusted policy or contract does the refund become the cash surrender value plus fees. Because the refund is unconditional, no surrender charge may be deducted and no consent from the existing insurer is required.
Why the other options are wrong
- B) The cash surrender value measure applies only when the replacing product is a variable or market value adjusted contract; an ordinary life replacement refunds all premiums and charges.
- C) The statute requires an unconditional refund; a surrender charge may not be deducted from a returned replacement policy.
- D) The refund right runs directly against the replacing insurer under TIC 1114.053(e); it does not depend on the existing insurer's consent.
Memory hook
Replacement refund: unconditional, premiums plus fees.