Utah Admin. Code R590-93-4 - Duties of an Insurer That Uses a Producer

(1) Each insurer shall maintain a system of supervision to ensure compliance with the requirements of Section 31A-22-429 and this rule that includes the following:

(a) inform each producer of the requirements of Section 31A-22-429 and this rule and incorporate the requirements into each relevant producer training manual prepared by the insurer;

(b) provide each producer guidance and a written statement of the company's position regarding the acceptability and appropriateness of a replacement transaction;

(c) maintain a system to review the appropriateness of each replacement transaction that a producer does not indicate is in accord with Subsection (1)(b);

(d) establish procedures to confirm that the requirements of Section 31A-22-429 and this rule have been met;

(e) establish procedures to detect any transaction that is a replacement of an existing policy or contract by the existing insurer, but that has not been reported as such by the applicant or producer;

(f) establish procedures to determine that the sales material and illustrations required by Section 31A-22-429 are complete and accurate for the proposed policy or contract; and

(g) maintain any record in any means that accurately reproduces the actual document.

(2) Each insurer shall monitor each producer's policy and contract replacements and make available to the department, upon request, a record of each producer's:

(a) life replacements, including financed purchases, as a percentage of the producer's total annual sales for life insurance;

(b) number of lapses of policies by the producer as a percentage of the producer's total annual sales for life insurance;

(c) annuity contract replacements as a percentage of the producer's total annuity contract sales;

(d) number of transactions that are unreported replacements of existing policies or contracts by the existing insurer detected by the company's monitoring system as required by Subsection R590-93-4(1)(e); and

(e) replacements, indexed by replacing producer and existing insurer.

(3)

(a)

(i) An insurer shall require a completed replacement notice with each application for life insurance or an annuity that indicates the proposed life insurance or annuity will replace, discontinue, or change an existing policy or contract.

(ii) The producer may elect to use the replacement notice in Appendix A or Appendix C.

(b) When the applicant has an existing policy or contract, an insurer shall maintain for at least five years after the termination or expiration of the proposed policy or contract:

(i) any sales material required by Subsection 31A-22-429(5);

(ii) the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased; and

(iii) the signed statement regarding financing and replacement.

(4) If an application does not meet the requirements of this rule, the insurer shall notify the producer and applicant and fulfill the outstanding requirements.

(5) Compliance with this rule may include the use of systematic customer surveys, interviews, confirmation letters, or internal monitoring programs.

Notes

Utah Admin. Code R590-93-4

Amended by Utah State Bulletin Number 2022-16, effective 8/8/2022 Amended by Utah State Bulletin Number 2022-23, effective 11/22/2022