§431:10D-508  Violations and penalties. (a)  Any failure to comply with this part shall be considered a violation ofarticle 13 of this chapter.  Violations shall include but are not limited to:

(1)  Any deceptive or misleading information set forthin sales material;

(2)  Failing to ask the applicant in completing theapplication the pertinent questions regarding the possibility of financing orreplacement;

(3)  The intentional incorrect recording of an answer;

(4)  Advising an applicant to respond negatively toany question regarding replacement to prevent notice to the existing insurer;or

(5)  Advising a policy or contract owner to writedirectly to the company in such a way as to attempt to obscure the identity ofthe replacing producer or company.

(b)  Policy and contract owners have the rightto replace existing life insurance policies or annuity contracts afterindicating in or as a part of applications for new coverage that replacement isnot their intention; however, patterns of such action by policy or contractowners of the same producer shall be deemed prima facie evidence of theproducer's knowledge that replacement was intended in connection with theidentified transactions, and these patterns of action shall be deemed primafacie evidence of the producer's intent to violate this part.

(c)  Where it is determined that therequirements of this part have not been met the replacing insurer shall provideto the policy owner an in force illustration if available or policy summary forthe replacement policy or available disclosure document for the replacementcontract and the appropriate notice regarding replacements required under thispart.

(d)  Violations of this part shall subject theviolators to penalties that may include the revocation or suspension of aproducer's or company's license, monetary fines and the forfeiture of anycommissions or compensation paid to a producer as a result of the transactionin connection with which the violations occurred.  In addition, where thecommissioner has determined that the violations were material to the sale, theinsurer may be required to make restitution, restore policy or contract values,and pay appropriate interest on the amount refunded in cash. [L 2000, c 252, ptof §3; am L 2003, c 212, §92]