Section 500.604. Duties where replacement involved; notice; filing.

If a replacement is  involved  in  a   transaction,  the  life insurer shall do all of the following:

(a)     Require, with, or as part of each application,  a   list  prepared  by the  agent representing, to the best of his or her knowledge, all of the existing life insurance policies proposed to be replaced.

(b)   Obtain all of the following:

(i)   A copy of any sales proposal used.

(ii)   The completed information statement.

(iii)     Proof of receipt by the applicant of the information statement and the notice to applicants regarding replacement of life insurance.

(iv)   The name of each insurer which  issued  any  life  insurance  being replaced.

(c)    Within 3 business days following the receipt of the application in the home or regional office of the replacing insurer, or on the day the life insurer issues the proposed policy, whichever is sooner, notify the existing insurer and furnish a copy of any sales proposal used and a copy of the completed information statement.

(d)  Examine any proposal used and the completed information  statement and ascertain that the information statement  meets  the   requirements   of this rule, R 500.601 to R 500.603, R 500.605, and R 500.606.

(e)   Verify the substantial accuracy of information concerning the proposed policy furnished to the applicant.

(f)   Maintain in the life insurer's home office, for not less than 3 years or until the conclusion of the next succeeding regular examination by the insurance regulatory authority of the   life  insurer's   state    of domicile, whichever is later, all of the following:

(i)   Copies of any proposal used.

(ii)   The completed information statement.

(iii)     Proof of receipt by the applicant of the information statement and the notice to applicants regarding replacement of life insurance.

(iv)   The applicant's signed statement with respect to replacement.

History: 1979 AC; 1984 AACS.