State RegulationsVA specificDifficulty 2/5
An applicant already owns a Medicare supplement policy and is asked to buy a second one from a different insurer. What duty does the producer have under Virginia's Medicare supplement replacement rules?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Virginia's Medicare supplement rules, under the Va. Code § 38.2-3601 et seq. framework and the Bureau of Insurance's Medigap regulations, require the producer to evaluate the appropriateness of the sale when the applicant already has similar coverage duplicating Medicare cost-sharing. That includes giving the replacement notice so the applicant can make an informed comparison and notifying the existing insurer. Duplicate Medigap coverage usually wastes premium dollars, since standardized plans pay the same gaps — which is exactly why the disclosure duties exist.
Why the other options are wrong
- A) Commission considerations are irrelevant to, and indeed the opposite of, the appropriateness analysis the rules demand.
- C) Virginia does not flatly prohibit duplicate Medicare supplement ownership; it regulates the sale through appropriateness and notice duties.
- D) Replacement and duplication duties expressly reach Medicare supplement sales; staying silent would violate them.
Memory hook
Second Medigap? Check appropriateness, hand the replacement notice, tell the old insurer.