During the replacement of life insurance, what must a replacing insurer do?

In the context of replacing life insurance, the replacing insurer is required to obtain a list of all existing life insurance policies that will be replaced. This requirement is crucial for several reasons. First, it ensures that the insurer is fully aware of the client’s insurance landscape, enabling them to provide informed recommendations regarding the new coverage. By collecting this information, the replacing insurer can help the policyholder understand the implications of their decision, including potential gaps in coverage or changes in premiums, benefits, or terms.

Additionally, this step is essential for regulatory compliance, as it promotes transparency and protects consumers from being inadvertently underinsured or confused by overlapping policies. It creates an opportunity for the insurer to discuss the reasons for replacement and assess the overall needs of the policyholder.

The other options, while relevant to the process, do not represent the primary responsibility of the replacing insurer in the replacement transaction. For example, sending a copy of the Notice Regarding Replacement or guaranteeing a replacement for existing policies may be part of the overall procedure, but they do not emphasize the need for complete understanding and documentation of existing policies, which is the core of facilitating a proper replacement process.