Section 5 — Replacement & Advertising

Georgia life insurance replacement regulations are primarily designed to protect whom?

The policyowner

A replacement occurs when new life insurance or an annuity is purchased and existing coverage is surrendered, lapsed, reduced, or otherwise affected.

True

Credit life insurance is generally exempt from Georgia replacement regulations.

True

When taking a life insurance application, the producer must determine whether existing coverage will be replaced.

True

The applicant must sign a statement regarding whether existing life insurance or annuities will be replaced.

True

If replacement is involved, the Notice Regarding Replacement must generally be provided when?

At the time of application

The applicant must be left with copies of all sales materials used in the replacement presentation.

True

The replacing insurer must notify existing insurers within how many working days after receiving the application?

3 working days

If requested, the existing insurer must provide a policy summary within how many days after receiving replacement notice?

10 days

Replacement records generally must be maintained for how long?

3 years or until the next regular examination, whichever is later

A replacement life insurance policy must provide a free-look period of how many days?

30 days

The purpose of replacement disclosure requirements is to help applicants compare existing and proposed coverage.

True

An agent using misleading comparisons to induce replacement may be guilty of what unfair trade practice?

Twisting

Advertisements used in Georgia insurance sales must be what?

Truthful and not misleading

An insurance advertisement may not omit material information if doing so would mislead consumers.

True

Life insurance advertisements may not make policies appear to be savings accounts or investment plans if misleading.

True

Insurers must maintain life insurance advertisement files for how long?

4 years or until the next regular examination, whichever is later

References to life insurance dividends in advertisements must disclose that dividends are what?

Not guaranteed

A life insurance Buyer’s Guide must generally be provided when?

Before completing the application

A Policy Summary describes policy benefits, premiums, values, and coverage details.

True

An insurer may use misleading terms to imply life insurance is not insurance.

False

An agent may not use titles such as “financial planner” or “investment advisor” to imply special advisory compensation unless true.

True

An advertisement exaggerating policy benefits may be considered what?

Misrepresentation

An insurer may not use deceptive or misleading advertising practices.

True

The purpose of the Buyer’s Guide is to help consumers better understand life insurance policies.

True

A Policy Summary generally includes information about premiums, cash values, and death benefits.

True

A replacement notice helps applicants understand possible disadvantages of replacing existing policies.

True

Replacement regulations apply to both life insurance and annuity contracts.

True

An applicant should compare surrender charges and new contestability periods before replacing a policy.

True

Replacement regulations are intended to reduce unnecessary policy replacements.

True

The replacing insurer is responsible for maintaining replacement documentation.

True

An insurer must establish and maintain a system to supervise replacement activities.

True

Insurance advertisements must not use words or phrases that exaggerate the benefits of a policy.

True

An advertisement may not create the impression that the insurer is connected with a government agency if that is untrue.

True

Advertisements must clearly identify the product as insurance if applicable.

True

An insurer may not use deceptive testimonials in insurance advertisements.

True

The Commissioner may require advertisements to be modified or withdrawn if misleading.

True

Insurance solicitation materials are subject to review under Georgia insurance law.

True

The purpose of replacement rules is to ensure applicants make informed decisions.

True

A producer must act honestly when comparing existing and proposed policies.

True

Replacement forms help insurers identify possible twisting activities.

True

The replacing insurer must notify the existing insurer about the proposed replacement.

True

Applicants generally have the right to examine replacement policies during the free-look period.

True

A producer should explain possible disadvantages of replacement, including new surrender periods and contestability periods.

True

An insurer may not misrepresent policy values or dividends in advertisements.

True

The Buyer’s Guide and Policy Summary help consumers compare life insurance policies.

True

Insurance advertisements may not contain misleading statistics or incomplete comparisons.

True

Replacement regulations apply even if the replacing policy is issued by the same insurer.

True

An insurer is responsible for ensuring that its producers comply with replacement regulations.

True

Failure to comply with replacement regulations may result in administrative penalties or disciplinary action.

True