§431:10D-505  Duties of replacing insurersthat use producers.  (a)  Where a replacement is involved in thetransaction, the replacing insurer shall:

(1)  Verify that the required forms are received andare in compliance with this part;

(2)  Notify any other existing insurer that may beaffected by the proposed replacement within five business days of receipt of acompleted application indicating replacement or when the replacement isidentified if not indicated on the application, and mail a copy of the availableillustration or policy summary for the proposed policy or available disclosuredocument for the proposed contract within five business days of a request froman existing insurer;

(3)  Be able to produce copies of the notificationregarding replacement required in section 431:10D-503(b), indexed by producer,for at least five years or until the next regular examination by the insurancedepartment of a company's state of domicile, whichever is later; and

(4)  Provide to the policy or contract owner notice ofthe right to return the policy or contract within thirty days of the deliveryof the contract and receive an unconditional full refund of all premiums orconsiderations paid on it, including any policy fees or charges or, in the caseof a variable or market value adjustment policy or contract, a payment of thecash surrender value provided under the policy or contract plus the fees andother charges deducted from the gross premiums or considerations or imposedunder the policy or contract; provided that such notice may be included informs approved by the commissioner pursuant to this part.

(b)  In transactions where the replacinginsurer and the existing insurer are the same or subsidiaries or affiliatesunder common ownership or control, the replacing insurer shall allow credit forthe period of time that has elapsed under the replaced policy's or contract'sincontestability and suicide period up to the face amount of the existingpolicy or contract.  With regard to financed purchases, the credit may belimited to the amount the face amount of the existing policy is reduced by theuse of existing policy values to fund the new policy or contract.

(c)  If an insurer prohibits the use of salesmaterial other than that approved by the company, as an alternative to therequirements made of an insurer pursuant to section 431:10D-503(e), the insurer may:

(1)  Require with each application a statement signedby the producer that:

(A)  Represents that the producer used onlycompany-approved sales material; and

(B)  States that copies of all sales materialwere left with the applicant in accordance with section 431:10D-503(d); and

(2)  Within ten days of the issuance of the policy orcontract:

(A)  Notify the applicant by sending a letteror by verbal communication with the applicant by a person whose duties areseparate from the marketing area of the insurer, that the producer hasrepresented that copies of all sales material have been left with the applicantin accordance with section 431:10D-503(d);

(B)  Provide the applicant with a toll freenumber to contact company personnel involved in the compliance function if suchis not the case; and

(C)  Stress the importance of retaining copiesof the sales material for future reference; and

(3)  Be able to produce a copy of the letter or otherverification in the policy file for at least five years after the terminationor expiration of the policy or contract. [L 2000, c 252, pt of §3; am L 2001, c121, §4; am L 2004, c 122, §58]