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



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



(2)  Failing to ask the applicant in completing the
application the pertinent questions regarding the possibility of financing or
replacement;



(3)  The intentional incorrect recording of an answer;



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



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



(b)  Policy and contract owners have the right
to replace existing life insurance policies or annuity contracts after
indicating in or as a part of applications for new coverage that replacement is
not their intention; however, patterns of such action by policy or contract
owners of the same producer shall be deemed prima facie evidence of the
producer's knowledge that replacement was intended in connection with the
identified transactions, and these patterns of action shall be deemed prima
facie evidence of the producer's intent to violate this part.



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



(d)  Violations of this part shall subject the
violators to penalties that may include the revocation or suspension of a
producer's or company's license, monetary fines and the forfeiture of any
commissions or compensation paid to a producer as a result of the transaction
in connection with which the violations occurred.  In addition, where the
commissioner has determined that the violations were material to the sale, the
insurer 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, pt
of §3; am L 2003, c 212, §92]