Regulation 60
Under Regulation 60, how many days does an external carrier have to respond to the Company's request for Information, before a hypothetical or best guess' disclosure can be created:
A) 20 calendar days B) 30 days (20 days to process + 5 days mail each way). C) 40 days (30 days to process + 5 days mail each way). D) As long as they need.
The replacement paperwork and application must be certified within what time period:
A) 30 days for external replacements and 60 days for internal replacements. B) 10 days from receiving the Disclosure statement. C) 90 days from the date the external values were received for externals OR 90 days from when the internal replacement disclosure was emailed to the Agent. D) 90 days from when the internal values were run or when the external values were received.
When the policy is issued, a new Disclosure Statement will be required to be signed in all of the following instances, EXCEPT:
A) A Universal Life policy with a No Lapse Guarantee Rider, where a 1035 Exchange amount changes the pre-paid premium schedule. B) A Whole Life policy where the rating, riders, and face amount remain the same, but the OPP amount varies from the amount on the original disclosure. C) When a WP Rider is not approved by underwriting but the rating remains the same. D) The rating of a life policy changes from non-smoker to select preferred. (X - incorrect)
To lock in the interest rate on a fixed annuity when there is a replacement involved under NYS Regulation 60, the following is required:
A) A submission form and either a signed Definition of Replacement form for internal replacements or a signed Authorization to Disclose Policy Information form for external replacements must be received by fax by the R60 Unit. B) A submission form must be faxed over to the R60 Unit before the interest rate change. C) The Definition of Replacement or Authorization forms can be dated before the interest rate and faxed over to the R60 Unit with a submission form, even after the change occurs. The R60 Unit will honor the date on the form. (X - incorrect) D) As long as in the application, additional details section, states that the interest rate must be locked in, it doesn't matter when the case was received by the R60 Unit.
When completing an external replacement under NYS Regulation 60, the following forms must be signed and sent over to the R60 Unit to properly open up a new case:
A) A submission form to open the case. The other forms can be faxed over once the forms are signed. (X - incorrect) B) The submission form, signed Important Notice, and signed Definition of Replacement forms. The Authorization to Disclose form its used only with Internal Replacements. C) The submission form and Authorization to Disclose Information form. D) The Definition of Replacement and the Authorization to Disclose Information forms must both be signed and accompany the submission form.
Agent Michael Night is replacing a $1,000,000 10 Year Term policy with an external carrier into 2 new policies, a $100,000 Whole Life policy and a $100,000 20 Year Term policy. How would the Agent fax in his submission form or forms to the R60 Unit?
A) Agent must send in one submission form and the 2 illustrations. B) Agent must send in one submission form and the 2 illustrations with the signed Authorization to Disclose and signed Definition of Replacement forms. C) Agent must send in 2 separate submission forms with the individual illustration for each. D) Agent must send in 2 separate submission forms with the separate illustration for each and also include the signed Definition of Replacement and Authorization to Disclose forms with each submission. The two sets must be faxed separately.
After a policy is issued, all of the following would require a new disclosure and be considered "Issued Differently Than Applied For" EXCEPT:
A) An insured was originally shown a disclosure with a non-smoker rating, but the policy was issued with a select preferred rating. B) A Waiver of Premium rider is applied for and shown on a disclosure, but the rider is disallowed in underwriting. C) The amount of unplanned premium coming into a Universal Life Protector is $860 more than originally disclosed. The rating, face-amount, and NLG rider remain the same, but the pre-pay NLG required premium is decreased by $1.26 a month. D) An OPP single premium from a 1035 Exchange is dumped into a standard Whole Life policy and is $540 more than the amount on the original disclosure. This is the only change as the face amount, WP rider, and issue age/rating are all the same as originally shown.
The major difference between an internal and external replacement when sending in a submission form to set up a new case is:
A) An internal replacements needs a signed Definition of Replacement form and the external replacement needs a signed Authorization to Disclose form to open up the case with the submission form. B) An internal replacement can be set up with only a submission form (and illustration if for a life policy) and no signatures are required to initiate the submission. An external replacement will always need a signed Authorization and Definition of Replacement form to accompany the submission form. C) An external replacement requires the Important Notice form and signed blank disclosure. An internal replacement only requires the submission form. D) An internal replacement requires only a signed submission form to open a case.
If a client is about purchase a new policy and the Agent, through the fact-finding interview, discovers the client had a policy that was previously placed on Premium Offset (POP), then this:
A) Constitutes a replacement if the POP occurred within the last 13 months. B) Does not constitute a replacement because the original policy will remain inforce. C) Always constitutes a replacement no matter how long ago POP took place. D) Does not constitute a replacement because POP is always exempt from Regulations 60.
Which of the following statements is False, with regards to the NY State Regulation 60 Replacement Procedures:
A) Disclosure statements must be signed before or on the same date as the application. B) A signed Definition of Replacement form must be received by the R60 Unit and dated before the application. C) An application and Definition of Replacement form indicating a Reg 60 replacement must be certified by the R60 Unit before being processed. D) The Important Notice form can be signed after the application as long as the disclosure statement was signed before the application.
What paperwork is required to replace an internal 5 Year Term policy with a 20 Year Term policy:
A) Fax the signed Definition of Replacement, Authorization to Disclose and a submission form as an in-force 5 YT Illustration. B) The submission form and the signed Definition of Replacement. The R60 Unit will run the inforce and proposed illustration for the Agent. C) The submission form, brief, and inforce illustration along with the pages of the illustration that show the premiums paid by year. D) The first page of the submission form and the complete proposed 20 Year Term illustration is needed. The R60 Unit will run the inforce illustration and brief to complete the disclosure.
An application can be taken prior to the R60 Unit's completed disclosure statement when there is a known replacement under NYS Regulation 60 when:
A) If it is an internal replacement. B) If the interest rates are changing within the next 10 days and the Agent needs to lock in the interest rate. C) As long as the Agent completed a disclosure statement to the best of their abilities before seeing the client. D) Never in an annuity sale. Only for a life replacement, an application may be obtained prior to a completed Disclosure Statement from the R60 Unit.
The Important Notice Regarding Replacement Form must be signed:
A) On the same day or before the application is taken. B) It is required with the submission form or a case cannot be generated. (X - incorrect) C) After the application is taken and with the delivery of the contract. D) Only for external replacements.
On the submission form, if you plan on selling a Joint Life Immediate Annuity, which section would you complete on page 2 of the submission form and what would you indicate:
A) Only the Joint Life box under section 3 needs to be selected with the gender and Dates of birth. The Reg60 Unit will determine the most suitable payout for the client. B) The Joint Life box must be selected, with both genders and dates of birth noted. The payout mode and payout option (e.g. life only) must be selected. if desired, the inflation rider must also be selected. C) The Single Life must be checked off with the payout mode. D) The Joint Life line must be checked off with the inflation rider selection.
All of the following are NOT replacement transactions under NYS Regulation 60, except:
A) Taking a partial surrender of a deferred annuity to fund an immediate annuity. B) Annuitizing an existing annuity contract. (X) C) Dividends are withdrawn from a life contract to pay the annual premium for a life contract that has been in force for 10 years. D) Rolling over a 401k funded with mutual funds to a New York Life annuity. (X)
All of the following are considered "exempt" and not subject to Regulation 60 EXCEPT:
A) Term Conversions B) Individual Life policies or annuity contracts whose cost is borne wholly by the employer. C) AD082 and AD085 Target Life UL conversions. D) A replacement of a term policy that is non-renewable and non-convertible.
If an Agent is planning on combining 3 different qualified annuities (each worth appro $15k) into one Premium Plus Variable Annuity, how would the Agent send in the submission form:
A) The Agent will complete one submission form and on page 1 complete the top 2 sections. On page 2 the Agent will put appro $45,000 for the Total Premium amount and check the Qualified option. The Agent will check the box next to Premium Plus Variable annuity in Section 2. The Agent then will put 3 next to Total # of policies being replaced and list the policy numbers on section B. The Agent statement and rest of form must also be completed. B) The Agent will complete three different submission forms and send them together. On page 2 the Agent will put $15,000 on each for the Total Premium amount and check the Qualified space. The Agent will check the box next to Premium Plus Variable annuity in Section 2. The Agent then will put 1 next to Total # of policies being replaced and list the policy number on Section B. The Agent statement and rest of forms must also be completed. C) The Agent will complete one submission form and list all information on page 1. They will also fax in the proposed illustration for the $45,000 Premier Variable annuity. They also must have a signed Definition of Replacement and signed Authorization to Disclose policy information. (X - incorrect) D) The Agent will send in the completed submission form (both pages), the proposed illustration, and the Signed Important Notice Regarding Replacement.
When completing a submission form, the entire form must be completed, including the Agent statement and must justify the replacement transaction. Which of the following is NOT an appropriate reason to recommend a replacement:
A) The proposed life contract has a No Lapse Guarantee Rider whereas the existing policy does not have any guarantees. B) The proposed annuity has a higher current interest rate than the existing policy. C) The premium for the proposed life contract is less than the existing policy's premium. D) The proposed variable annuity investment divisions have performed better than the existing variable annuity.
If a registered product is being replaced by a fixed product, the Agent selling the fixed product does not need to be a licensed Registered Representative:
False
