Common Sense Life Insurance Licensing Test

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The following are taxation rules that apply to MEC's (Modified Endowment Contract) cash value:

- tax-deferred accumulations - any distributions that are taxable, including withdrawals and policy loans - distributions are taxed on LIFO (Last In, First Out) basis--known as interest first rule - distributions before age 59.5 are subject to a 10% penalty

Duties of the replacing producer

-Present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the producer. A copy must be left with the applicant. -Obtain a list of all existing life insurance and/or annuity policies to be replaced including policy numbers and the names of all companies being replaced. -Leave the applicant with the original or a copy of written or printed communications used for presentation to the applicant. -Submit to the replacing insurance company a copy of the replacement notice with the application. Each producer who initiates the application must submit the following to the insurance company or as part of each application: -a statement signed by the applicant as to whether replacement of existing life insurance or annuity is involved in the transaction -a signed statement as to whether the producer know replacement is or may be involved in the transaction

3 types of nonforfeiture options

1) Cash surrender: the actual amount of money you will receive if you choose to terminate a permanent life insurance policy before its maturity date, or before you die 2) reduce paid-up insurance: a way for people who no longer need the same amount of coverage, or are concerned about keeping up with their premium payments, to essentially "buy out" their coverage. It allows you to retain a death benefit from your life insurance policy without paying anything toward premiums. A reduced paid-up option might be built into your policy if you have whole life insurance. 3) extended term insurance: allows a policyholder to stop paying the premiums, but not forfeit the equity of their policy. It has the same face amount as the original policy, but for a shorter period of time.

3 situations that will result in life insurance being included in the insured's taxable estate

1. incidents of ownership -- any one of the rights of policy ownership, such as the right to cash value, the right to change the beneficiary, the right to obtain policy loans, or the right to assign the policy. If the insured/policyowner possessed any one of these incidents of ownership at the time of his/her death, the entire amount of the policy will be included in the insured's taxable estate, even though the actual proceeds were paid out to the beneficiary. 2. estate of beneficiary -- if the insured's estate is the designated beneficiary at the time of the insured's death, the entire face amount of the policy will be included in his/her taxable ideas. 3. transfer of ownership -- if the insured, as policyowner, assigns or transfers ownership of the policy or makes a gift of policy WITHIN 3 YRS prior to his/her death, the entire face amount of the policy will be included in his/her taxable estate.

A valid insurable interest may exist between the policyowner and the insured when the policy is insuring any of the following:

1. policy owner's own life 2. the life of a family member (a spouse or a close blood relative) 3. the life of a business partner, key employee, or someone who has a financial obligation to the policyowner (ex: a debtor has a financial obligation to a creditor, so the creditor has a valid insurance interest in the life of the debtor) Important To Know: insurable interest must exist at the time of application AND the policyowner must have insurable interest in the life of the insured.

A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called

1035 exchange note: in accordance with section 1035 of the Internal Revenue Code, certain exchanges of life insurance policies and annuities may occur as nontaxable exchanges.

What is the penalty for IRA distributions that are below the required minimum for the year?

50% Note: if there are no distributions at the required age, or if the distributions are not large enough, the penalty is 50% of the shortfall from the required annual amount.

Waiver of Cost of Insurance

A disability rider added to a Universal Life policy that pays the cost of insurance and other expense charges during the insured's disability.

Nonparticipating life insurance

A life insurance policy that does not pay dividends to policyowners

Insured

A person covered by an insurance policy

Which is TRUE about cash surrender nonforfeiture option? a. Fund exceeding the premium paid are taxable as ordinary income b. After the cash surrender, the insured is covered for a grace period of one month. c. The policy remains active for some time after the policyholder opts for cash surrender. d. The policyholder receives the original cash value of the policy.

A. Fund exceeding the premium paid are taxable as ordinary income. note: The insurers surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive

Difference between Collateral and Absolute Assignment

Absolute Assignment is the complete and permanent transfer of ownership; collateral assignment is the partial and temporary transfer of rights.

MEC vs Life Insurance

All life insurance policies are subject to the 7-day pay test, and any time there is a material change to a policy (such as an increase in the death benefit), a new 7-pay test is required. Whether from a life insurance policy or a MEC, the death benefit received by the beneficiary is tax-free.

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers Note: all authorized insurers are required to contribute to a fund to provide for the payment of claims for insolvent insurers.

An absolute assignment is a A. Change of beneficiary B. Change of insurer C. Transfer of all ownership rights in a policy D. Transfer of some ownership rights in a policy

C. Transfer of all ownership rights in a policy

Human Life Value Approach (HVLA)

Calculates an individual's life value by looking at the insured's wages, inflation, the number of years to retirement, and the time value of money. It gives the insured an estimate of what would be lost to the family in the event of the premature death of the insured.

A long stretch of of economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?

Cost of Living Rider Note: the Cost of Living Rider annually adjusts the policy's face value in accordance with the national rate of inflation, in order to keep the initial value of the policy constant over time.

Notes on Insurable Interest

In life insurance, insurable interest must exist between the policyowner and the insured at the time of the application; however, once a life insurance policy has been issued, the insurer must pay the policy benefit, whether or not an insurable interest exists. Insurable interest id not required for beneficiaries. Since the beneficiary's well-being is dependent upon the insured, and the beneficiary's life is not the one being insured, the beneficiary does not have to show an insurable interest for a policy to be purchased.

When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?

Interest only Note: in settlement options, the principle tax is free, but the interest is taxable.

What is the other term for cash payment settlement option?

Lump sum note: Upon the death of the insured, the contract is designed to pay the proceeds in cash, called a lump sum.

Permanent Life Insurance

Meant for long-term needs and is meant to last until the day you die. Note: you will not outlive your policy and your family will receive the death benefit no matter when you die. This builds cash-surrender values which can be accessed at any time for any reason. Premiums are level for your whole life and will not go up as you get older nor will you have to requalify for the policy. You can pay for the coverage in a shorter period of time and and after that you own the coverage for the rest of your life

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an:

Modified Endowment Contract

STOLI policy

Policies that are financed and purchased with the sole intent of selling them for life settlements. a life insurance arrangement in which a person with no relationship to the insured (a "stranger") purchases a life policy on the insured's life with the intent of selling the policy to an investor and profiting financially when the insured dies.

Policy Review and what it is:

Policy review allows the agent to ensure that the insured understands all aspects if the contract. Review of the contract with the insured involves pointing out provisions or riders that may have been different than anticipated, and explaining what effect they have on the contract. The agent should also explain the rating procedure to the client, ESPECIALLY if the policy is rated differently than applied for or has been modified/amended in any other way. The agent needs to additionally explain any other choices and provisions available to the policyowner that may become active at this time.

Term Life Insurance

Provides coverage for a limited period of time. Meant for financial needs that will not last forever. Policy lasts for about 10-30 yrs. Note: term premium remain level until the term period is up. After your term, your rates will skyrocket. This is good for when you know you will be financially independent or when you know there will be no one financially dependent on you. Good for when you're young and for keeping your costs down

Business of Life Settlement

Refers to any activity relating to the solicitation and sale of a life settlement contract to a third party who has no insurable interest in the insured.

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Refund the premiums paid. Note: if the insured commits suicide within the 2 years following the policy effective date, the insurers liability is limited to a refund of premium.

Rider

Riders can help cover life events that your standard policy does not. add-ons that offer flexibility to your policy.

Difference between a STOLI and Life Settlement Contract

STOLI: -buying a new policy on a stranger -no insurable interest -initiated for the purpose of obtaining a policy that would benefit a person who has no insurable interest in the life of the inured at the time of policy origination. Life Settlement: -selling an existing life insurance policy -these transactions result from existing life insurance policies. note: a lawful life settlement contract does not constitute a STOLI.

Social Security Income "Blackout" Period

Social Security blackout period is the time during which the surviving spouse and/or children do not receive any social security survivor benefits. Blackout period begins when the youngest child reaches the age of 16, and ends when the surviving spouse qualifies for retirements benefits, as early as age 60. (unmarried children under the age 18 or up to 19 if they are attending secondary school full time can also receive benefits. Technically, the social security check will be made payable to the surviving spouse until the youngest child is 16, and directly to the child between the ages 16 and 18)

STOLI

Stranger-Originated Life Insurance

Term Protection

Temporary life insurance provided for a specific period of time. Note: also known as pure life insurance.

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following:

The loss must not be catastrophic, the loss produced by the risk must be definite, the loss must be a sufficient amount of homogeneous exposure.

In the state of Utah, insurance companies licensed to sell life insurance or annuities, or health insurance are required by law to be members of the Utah Life and Health Insurance Guaranty Association (ULHIGA)

The maximum that the ULHIGA will pay under any circumstances is the applicable amount of coverage or $500,000 (whichever is lower). The following limits apply: $200,000 in net cash surrender values $500,000 in health insurance benefits $500,000 in most annuity benefits $500,000 in annuity benefits to the contract holder of annuities issued to pension plans. The insurers must disclose to policyholders that their contractual guarantees may not be covered by the Association. The disclosure must be made in writing on an approved summary document from the Utah Insurance Department. It is an unfair trade practice to make any statement that an insurer's policies are guaranteed by the existence of the Insurance Guaranty Association. KNOW THIS: Insurers cannot advertise protection by the Insurance Guaranty Association

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

The policyowner can specify the way proceeds are split in the policy. note: The owner of a life insurance policy may name any individual as a beneficiary for the policy proceeds. The owner may name more than one individual, in which case the individual beneficiaries will split the benefit by the percentage specified in the policy.

If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

The policyowner has the ownership rights under the policy, and not the insured or the beneficiary. note: 1.Policyowners-pay premium to insurance company and only have ownership rights 2.Insurance Company- issues policy to policyowner and pays benefit to beneficiary 3.Beneficiary- Receives benefit upon insured's death

Suicide Exclusion

The suicide provision in life insurance policies protects the insurers from individuals who purchase life insurance with the intention of committing suicide. Insurance policies usually stipulate a period of time during which the death benefit will not be paid if the insured commits suicide. If the insured commits suicide within 2 years following the policy effective date (issue date), the insurer's liability is limited to a refund of premium. If the insured commits suicide after the 2-year period, the policy will pay the death proceeds to the designated beneficiary the same as if the insured had died of natural causes.

Replacing Insured's Salary or Lost Services

The surviving spouse who was the caregiver of the children may have to train to enter the job market. If the spouse works outside of the home, a new expense for day care must be considered.

Liquidation vs. Retention of Capital

Under the retention of capital approach, enough insurance is purchased so that when added to other liquid assets, there is enough to pay income benefits without jeopardizing the insured's principal asset - such as a home.

Aletory Contract

Unequal amount or value is exchanged. The amount of premium the insured pays is much less than the potential loss by the insurer.

Permanent Protection

Various forms of whole life insurance policies that remain in effect to age 100, as long as the premium is paid. Note: Permanent insurance provides lifetime protection and includes a savings element (or cash value)

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium note: Waiver of premium rider waives the premium if the insured owner has been totally disabled for a predetermined period. The payor benefit provides for an owner other than the insured and the waiver of cost of insurance is found in Universal Life

Delivery Receipt

When an agent hand delivers an individual policy or annuity to the policyowner, the agent must obtain a signed delivery receipt. note: the receipt will be in duplicate and states the date that the contract was received. The free-look period will take effect on the date the receipt was signed. note #2: if a policy is delivered by any other method, the insurer must establish a way to verify the policy delivery. A certificate of mailing is considered adequate proof of delivery.

Benefit Payment

When an annuity is used to fund a traditional IRA, distributions are fully taxable if contributions were made with pretax dollars. If there are no distributions at the required age, or distributions aren't large enough, the penalty is 50% of the shortfall from the required annual amount.

Cash Loans

Whenever a policy has cash value, it has loan value. Loan value = cash value - (unpaid loans + interest) If there are outstanding loans at the time of the insured's death, the loan amount will be considered a debt to the policy and death benefit will be reduced by the amount of indebtedness.

Individual Life Insurance

Written on a single life. The rate and coverage is based upon the underwriting of that individual

life expectancy

a calculation of months that the insured is predicted to live based off of their medical history.

Domestic Insurance

a company is doing business within the state which it was incorporated.

1035 Exchange

a non-taxable exchange of cash value life insurance or an annuity on the same life. expanded explanation: when a policyowner exchanges a cash value life insurance policy for another cash value life insurance policy, or a cash value life policy for an annuity, or an annuity for an annuity, the policies or annuities MUST BE ON THE SAME LIFE. there will be no income tax transactions. The following are allowable exchanges: * A life insurance policy for another life insurance policy, an endowment contract, or an annuity contract * an endowment contract for another endowment contract or an annuity contract * an annuity contract for another annuity contract note: a policyowner may not exchange funds from an annuity into a cash value life policy. Nor would term life be used in a 1035 Exchange since it has no cash value. The key is that the exchange may not be from a less tax-advantaged contract to a more tax-advantaged contract. "Same-to-same" is acceptable.

Life Settlement Provider

a person (other than the owner) who enters into a life settlement contract with the owner

Life Settlement Broker

a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract

In terms of Social Security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receiving retirement benefits? a. blackout period b. nonpayment interval c. benefit reduction d. accumulation period

a. blackout period

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a. equal to the original policy for as long as the cash values will purchase b. in lesser amounts for the remaining policy term of age 100 c. equal to the cash value surrendered from the policy d. the same as the original policy minus the cash value

a. equal to the original policy for as long as the cash values will purchase

which of the following premium modes would result in the highest annual cost for an insurance policy? a. monthly b. quarterly c. semi-annually d. annual

a. monthly

which of the following is another term for the accumulation period of an annuity? a. pay-in period b. premium period c. liquidation period d. annuity period

a. pay-in period

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? a. predicted needs of the family after the insured's death b. insured's current and future income c. insured's annual expenses d. effect of inflation on income over time

a. predicted needs of the family after the insured's death the HVLA to determining the value of the individual's life requires the calculation of the probable future earnings of the insured, which involves: wages, expenses, inflation, amount of time until retirement, and the time value of money, predicted needs of the family after the insured's death

Nonforfeiture Clause

an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to nonpayment.

participating (mutual) life insurance

any policy that distributes its dividends to policyowners by cash payments, reduced premiums, units of paid up insurance, a savings program, or by the purchase of term insurance. Note: Only participating policies distribute dividends to the policy owners

Replacement

any transaction in which new life insurance or a new annuity is purchased. note: as a result, the existing life insurance or annuity has been or will be any of the following: -lapsed, forfeited, surrendered, or otherwise terminated -reissued with any reduction in cash value -converted to reduced paid-up insurance, continued as extended term insurance or otherwise reduced in value by the use of nonforfeiture benefits or other policy values. -amended so as to affect either a reduction in benefits or in the term for which coverage would otherwise remain in force for which benefits would be paid for. -used in a financial purchase

Guaranty Associations

are formed to protect policyowners, insureds, beneficiaries, and anyone entitled to payment under an insurance policy from the incompetence and insolvency or insurers. The association will pay covered claims up to certain limits set by state law. The Association is funded by its members through assessment. All authorized insurers, which are required to be the members of the Association, contribute to a fund provide for the payment of claims for insolvent insurers.

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? a. nonforfeiture clause b. common disaster clause c. spendthrift clause d. settlement clause

b. common disaster clause

All of the following are characteristics of group life insurance EXCEPT a. certificate holders may convert coverage to an individual policy without evidence of insurability. b. premiums are determined by the age, sex, and occupation of each individual certificate holder c. group life insurance is written as a master policy d. individuals covered under the policy receive a certificate of insurance.

b. premiums are determined by the age, sex, and occupation of each individual certificate holder this is for the entire group, not for each individual insured.

A policyowner, who is also the insured, wants to name her husband as the beneficiary of her life insurance policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the: a. contingent beneficiary b. revocable beneficiary c. irrevocable beneficiary d. secondary beneficiary

b. revocable beneficiary

All the following are beneficiary designations EXCEPT: a. Contingent b. Primary c. Specified d. Tertiary

c. Specified note: Beneficiary designations determine the order in which benefits will be paid: primary or contingent, which includes secondary and tertiary.

An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity not be taxed? a. dependents b. annuitant c. spouse d. charitable organization

c. spouse note: if an annuities contract holder dies before the effective starting date, the contract's interest continues to be taxable, unless the beneficiary is a spouse. In that case, the tax can be deferred.

Variable Life Insurance/Annuities

contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance. note: variable annuities keep pace with inflation and are determined by the value.

Fixed Life Insurance/Annuities

contracts that offer guaranteed minimum or fixed benefits that are stated in the contract.

Which of the following statements is TRUE concerning the Accidental Death Rider? a. It is also known as triple indemnity rider. b. This rider is only available to insureds over the age of 65. c. It is only available in group insurance. d. It will pay double or triple the face amount.

d. It will pay double or triple the face amount note: The Accidental Death Rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.

An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of: a. a prearranged funeral plan b. a viatical settlement c. third-party ownership d. a STOLI policy

d. a STOLI policy

Which of the following is NOT an example of a valid insurable interest? a. business partners in each other's lives b. employer in key employee's life c. child in parent's lives d. debtor in the life of the creditor

d. debtor in the life of the creditor

What type of tax is associated with death proceeds from a life insurance policy? a. personal tax b. state tax c. income tax d. federal estate tax

d. federal estate tax

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? a. no payments b. annuity dividends c. full premium refund without any changes d. guaranteed surrender value

d. guaranteed surrender value

An insured has a Modified Endowment Contract. He wants to draw some money in order to pay some medical bills. Which of the following is true? a. he will have to pay a penalty regardless of his age b. he will not have to pay, regardless of his age c. he cannot withdraw money from his MEC before age 59.5 d. he will have to pay a penalty if he is younger than 59.5.

d. he will have to pay a penalty if he is younger than 59.5

Which of the following does a life insurance producer have the right to do? a. transact insurance for non-admitted insurers b. modify coverage c. bind coverage d. receive an application

d. receive an application

Life Settlement Contract

establishes the terms under which the life settlement provider will pay compensation to the policyowner, in return for the assignment, transfer, sale, or release of any portion of the following: the death benefit policy ownership any beneficial interest interest in a trust or any other entity that owns the policy

What must a producer do/explain when delivering a new policy to the insured?

explain/do the following: 1. policy provisions 2. exclusions 3. riders at the time of delivery 4. rating procedures (especially if the policy is rated differently than applied for) 5. collect any due premium 6. have the insured sign the statement of continued good health

Distributions at Death

if the annuity contract holder dies before the annuitization data, the interest accumulated in the annuity becomes taxable. If the beneficiary of the annuity is a spouse, however, the tax can continue to be deferred. Any unpaid annuity benefits following the death of an annuitant are paid to the beneficiary and are taxable.

Collateral Assignment

involves a transfer of partial rights to another person. Note: usually done to secure a loan or some other transaction

Absolute Assignment

involves transferring all rights of ownership to another person or entity.

Dividend

nontaxed return of unused premiums. note: not considered to be income for tax purposes since they are the return of unused premiums. When dividends are left with the insurer to accumulate interest, the interest earned on the dividend account is subject to taxation as ordinary income each year interest is earned, whether or not the interest is paid out to the policy owner.

Irrevocable Beneficiary

one that cannot be changed without the beneficiary's consent

Return of Premium Rider

pays the total amount of premiums paid into the policy in addition to the face value, as long as the insured dies within a certain time period specified in the policy. It also returns premiums to the living insured at the end of a specified period of time, as long as the premiums have been paid.

Policy Review

personal delivery allows agent to make sure insured understands all aspects of the contract; pointing out provisions or riders that may be different than anticipated, explaining how they affect the contract; explaining rating procedure and possible choices and provisions available to policy owner that may be active at this time

the primary purpose of licensing is to

satisfy a federal requirement that all persons involved with insurance be licensed.

Revocable Beneficiary

someone whose rights to your life insurance benefits can be revoked or changed while you're still alive

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

the beneficiary will only receive payments of interest earned on the death benefit.

Replacing Insurer

the company that issues the new policy

Existing Insurer

the company whose policy is being replaced

Values Included in Insured's Estate

the death benefit or face amount of a life insurance policy may be included in the insured's taxable estate at death and subject to the federal estate tax.

Interest Only Settlement Option

the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals.

Owner

the person who owns the life insurance policy..

Liquidity

the policy's cash values can be borrowed against at any time and used for immediate needs

What must happen when an individual policy or annuity has been personally delivered to the policy owner?

the policyowner must sign a delivery receipt.

What do STOLI's violate

the principle of insurable interest. The principle of insurable interest is in place to ensure that a person purchasing a life insurance policy is actually interested in the longevity rather than the death of the insured. Because of this, insurers take an aggressive legal stance against policies they suspect are involved in STOLI transactions.

whole life insurance

type of permanent life insurance and is the most expensive but has access to exponential cash values that can be accessed at any time. And regardless of the economy, the cash values grow each time--guaranteed

universal life insurance

type of permanent life insurance that is flexible by allowing you to change your premiums and death benefits as there are changes in your life

Insurable Interest

when purchasing insurance, the policyowner must face the possibility of losing money or something of value in the event of loss.

Settlement Options

when the beneficiary receives payments consisting of both principal and interest, the interest portion of the payments received is taxable as income. ex: if $100,000 of life insurance proceeds were used in a settlement option paying $13,000 per year for 10 yrs, $10,000 per yr would be income tax free and $3,000 per yr would be income taxable.

Group Life Insurance

written as a master policy covering the lives of more than one individual covered under the single policy. Individuals covered do not receive a policy but instead receive a certificates of insurance. The rate and coverage are based upon group underwriting, with all individuals covered for the same amount and rate.

Duties of the replacing insurance company

• Require from the producers list of the applicants life insurance contracts to be replaced. • A copy of the replacement notice provided by the applicant. • Send each existing insurance company a written communication advising of proposed replacement within the specified time frame which starts at the time the application is received in the replacing insurers home or admin office. • A policy summary or ledger statement containing policy data on the prosper life insurance or annuity must be included. In addition, there are several requirements that apply only to replacements conducted within the state of Utah. For example, replacing insurers that use producers must -with respect to an electronically completed notice of replacement, send a printed copy to the applicant within 5 business days -notify the existing insurer within 5 business days of the receipt of an application -be able to produce copies of any related notification for at least 5 years or until the end of the next examination, whichever is later -provide the applicant the right to return the policy within 30 days If any insurer prohibits the use of sales material, the insurer must - within 10 working days of the insurance of a policy - notify the applicant, provide the applicant with contact information, and stress the importance of retaining copies of sales material. The existing insurer must: -retain all replacement notifications for at least 5 yrs or until the next examination, whichever is later -within 5 working days of a replacement notification, send a letter to the insured, informing them of their right to receive information about the existing policy. This information must be provided within 5 days of a request.


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