§431:10D-504 
Duties of insurers that use producers.  Each insurer shall:



(1)  Maintain a system of
supervision and control to insure compliance with the requirements of this part
that shall include at least the following:



(A)  Inform its
producers of the requirements of this part and incorporate the requirements of
this part into all relevant producer training manuals prepared by the insurer;



(B)  Provide to each
producer a written statement of the company's position with respect to the
acceptability of replacements providing guidance to its producer as to the
appropriateness of these transactions;



(C)  A system to
review the appropriateness of each replacement transaction that the producer
does not indicate is in accord with subparagraph (B);



(D)  Procedures to
confirm that the requirements of this part have been met; and



(E)  Procedures to
detect transactions that are replacements of existing policies or contracts by
the existing insurer, but that have not been reported as such by the applicant
or producer.



Compliance with
this section may include but shall not be limited to systematic customer
surveys, interviews, confirmation letters, or programs of internal monitoring;



(2)  Have the capacity to
monitor each producer's life insurance policy and annuity contract for
replacements for the insurer, and shall produce, upon request, and make such
records available to the commissioner.  The capacity to monitor shall include
the ability to produce records for 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 annual 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 paragraph (1)(E); and



(E)  Replacements,
indexed by replacing producer and existing insurer;



(3)  Require with or as a
part of each application for life insurance or an annuity a signed statement by
both the applicant and the producer as to whether the applicant has existing
policies or contracts;



(4)  Require with each
application for life insurance or an annuity that indicates an existing policy
or contract a completed notice as required by section 431:10D‑503(b)
regarding replacements;



(5)  When the applicant has
existing policies or contracts, each insurer shall be able to produce copies of
any sales material as required by section 431:10D‑503(e), the basic
illustration and any supplemental illustrations related to the specific policy
or contract that is purchased, and the producer's and applicant's signed
statements with respect to financing and replacement for at least five years
after the termination or expiration of the proposed policy or contract;



(6)  Ascertain that the
sales material and illustrations required by section 431:10D-503(e) meet the
requirements of this part and are complete and accurate for the proposed policy
or contract;



(7)  If an application does
not meet the requirements of this part, notify the producer and applicant and
fulfill the outstanding requirements; and



(8)  Maintain records in
paper, photograph, microprocess, mechanical, or electronic media, or by any
process that accurately reproduces the actual paper document. [L 2000, c 252,
pt of §3; am L 2001, c 121, §3]