Replacement policy. A. Every insurer operating in this state shall inform its agents of the provisions of this section. B. Every agent shall secure with or as a part of each application for insurance a statement as to whether the new insurance policy or annuity policy will replace an existing insurance policy or annuity policy on the same life. C. The insurer shall review each statement prior to commencing any underwriting. The review shall occur not later than five (5) days after receipt of the application by the insurer to determine if the policy is a replacement policy. If the insurer determines that the policy is a replacement policy and if the agent has not secured and forwarded the documents required by the provisions of subsection D of this section to the insurer, the insurer shall cause the agent to secure and forward said documents. D. If a policy is a replacement policy, the agent shall secure and forward to the insurer with each application the following: 1. A completed notice as provided for in Section 5 of the Life Insurance and Annuity Policyholders Protection Act; and 2. A signed statement as provided for in Section 6 of the Life Insurance and Annuity Policyholders Protection Act. If the applicant declines to sign the statement, the agent shall furnish to the insurer a written statement to that effect, signed by the agent which shall be in addition to the signed agent's certification; and 3. Copies of the sales material prepared by the agent. If the material is not substantially correct as determined by the insurer, the insurer shall delay processing the application until corrected information has been presented to and acknowledged by the applicant. E. If the statement provided for in Section 6 of the Life Insurance and Annuity Policyholders Protection Act is not received by the insurer with the application or if the statement is received unsigned, it shall be presumed by the insurer that the applicant desires that the transaction be confidential and the replacing insurer shall not notify the replaced insurer. If the applicant signs the statement indicating that the replaced insurer be notified, then the replacing insurer shall send a written notification of the replacement to the home office of each replaced insurer within five (5) days of receipt of the application. Notification shall include the name of the applicant, the name of the insured, the number of the policy being replaced, the generic name and the face amount of the replacing policy, and the legal name of the insurers. F. The replacing insurer shall maintain copies of the notice, statement, and notifications to the replaced insurers for at least three (3) years. Said copies shall be indexed so as to be readily available for review by the Insurance Commissioner or his designee. G. The insurer shall guarantee the policyholder at least a twenty-day right to return the policy after delivery for a full refund of premium. The insurer shall provide prominent written notice informing the policyholder of this right. Said notice shall be attached to, or as part of, the first page of the policy. H. If only an insurer is involved with the replacement of a life insurance policy or an annuity policy of residents of this state, the requirements provided for in this section, where applicable, shall be followed.
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