§ 81.6. Duties of insurers that use agents or brokers.
(a) An insurer that uses an agent or broker in a life insurance or annuity sale shall:
(1) Require with or as part of a completed application for life insurance or annuity a statement signed by the agent or broker as to whether the broker knows replacement is or may be involved in the transaction.
(2) If replacement is involved:
(i) Require from the agent or broker with the application for life insurance or annuity a list of all the applicants existing life insurance or annuity to be replaced, and a copy of the replacement notice provided the applicant under § 81.4(b)(1) (relating to duties of agents and brokers). The existing life insurance or annuity shall be identified by name of insurer, insured and contract number. If a number has not been assigned by the existing insurer, alternative identification, such as an application or receipt number, shall be listed.
(ii) Send to each existing insurer a written communication advising of the replacement or proposed replacement and the identification information obtained under subparagraph (i) and in the case of life insurance, the disclosure statement as required by § 83.3 (relating to disclosure statement) or a ledger statement containing comparable policy data on the proposed life insurance. A surrender comparison index need not be included. In the case of an annuity, a ledger statement containing comparable data shall be provided. This written communication shall be made within 5 working days of the date the application is received in the replacing insurers home or regional office, or the date the proposed policy or contract is issued, whichever is sooner.
(b) An existing insurer or insurers agent or broker that undertakes the conservation shall, within 20 days from the date the written communication plus the materials required in subparagraphs (i) and (ii) is received by the existing insurer, furnish the policyowner with a disclosure statement for the existing life insurance or ledger statement containing policy data on the existing policy or annuity, or both. The disclosure statement or ledger statement shall be completed in accordance with § 83.3, except that information relating to premiums, cash values, death benefits and dividends shall be computed from the current policy year of the existing life insurance. The disclosure statement or ledger statement shall include the amount of outstanding indebtedness, the sum of dividend accumulations or additions, and may include other information that is not in violation of regulations or statutes. A surrender comparison index need not be included. In the case of an annuity, a ledger statement containing comparable data shall be provided. The replacing insurer may request the existing insurer to furnish it with a copy of the statements, which shall be furnished within 5 working days of the receipt of the request.
(c) The replacing insurer shall maintain evidence of the Notice Regarding Replacement of Life Insurance and Annuities, the disclosure statement and any ledger statement used, and a replacement register, cross indexed, by replacing agent and existing insurer to be replaced. The existing insurer shall maintain evidence of disclosure statements or ledger statements used in any conservation. Evidence that all requirements were met shall be maintained for at least 3 years or until the conclusion of the next succeeding regular examination by the Department of its state of domicile, whichever is earlier.
(d) The replacing insurer shall have prominently printed on the first page of the policy or attached thereto a notice that the applicant has a right to an unconditional refund of all premiums paid, which right may be exercised within a period of 20 days commencing from the date of delivery of the policy.
This section cited in 31 Pa. Code § 81.3 (relating to exemptions); and 31 Pa. Code § 81.7 (relating to duties of insurers with respect to direct response sales).
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