Replacement requirements apply to which party?

• A. They do not apply to the existing insurer
• B. They apply only to the replacing insurer
• C. They apply to the replacing insurer only
• D. They apply to both insurers

Answer: (A)

Replacement requirements focus on the insurer that is issuing the new policy. When a life insurance policy is being replaced, the key duties to ensure proper disclosure, suitability, and protection of the insured fall on the replacing insurer—the company issuing the new policy. The existing insurer isn’t subject to these replacement-specific obligations, though it may be informed or asked to respond as part of the process. This is why the correct understanding is that replacement requirements apply to the replacing insurer only.