OAR 836-080-0029
Duties of Replacing Insurers that Use Agents
(1)
When a replacement is involved in the transaction, the replacing insurer shall:(a)
Verify that the required forms are received and are in compliance with OAR 836-080-0001 (Statutory Authority; Purpose; Applicability) to 836-080-0043 (Violations and Penalties);(b)
Notify any other existing insurer that may be affected by the proposed replacement within five business days of receipt of a completed application indicating replacement or when the replacement is identified if not indicated on the application, and mail a copy of the available illustration or policy summary for the proposed policy or available disclosure document for the proposed contract within five business days of a request from an existing insurer;(c)
Be able to produce copies of the notification regarding replacement required in OAR 836-080-0014 (Duties of Agent)(2), indexed by insurance producer, for at least five years or until the next regular examination by the insurance department of the insurer’s state of domicile, whichever is later; and(d)
Provide to the policyholder or contract owner notice of the right to return the policy or contract within 30 days of the delivery of the policy or contract and receive an unconditional full refund of all premiums or considerations paid on it, including any policy fees or charges or, in the case of a variable or market value adjustment policy or contract, a payment of the cash surrender value provided under the policy or contract plus the fees and other charges deducted from the gross premiums or considerations or imposed under such policy or contract. Notice required in this subsection may be included in Appendix A or C to this rule.(2)
In a transaction in which the replacing insurer and the existing insurer are the same or are subsidiaries or affiliates under common ownership or control, the replacing insurer shall allow credit for the period of time that has elapsed under the replaced policy’s or contract’s incontestability and suicide period up to the face amount of the existing policy or contract. With regard to a financed purchase the credit may be limited to the amount the face amount of the existing policy is reduced by the use of existing policy values to fund the new policy or contract.(3)
If an insurer prohibits the use of sales material other than that approved by the insurer, as an alternative to the requirements made of an insurer pursuant to OAR 836-080-0014 (Duties of Agent)(5), the insurer may:(a)
Require with each application a statement signed by the insurance producer that:(A)
Represents that the insurance producer used only insurer-approved sales material;(B)
States that copies of all sales material were left with the applicant in accordance with OAR 836-080-0014 (Duties of Agent)(4); and(b)
Within ten days of the issuance of the policy or contract:(A)
Notify the applicant by sending a letter or by verbal communication with the applicant by a person whose duties are separate from the marketing area of the insurer, that the insurance producer has represented that copies of all sales material have been left with the applicant in accordance with OAR 836-080-0014 (Duties of Agent)(4);(B)
Provide the applicant with a toll-free number to contact insurer personnel involved in the compliance function if the insurer cannot give the applicant the notice required in paragraph (A) of this subsection; and(C)
Stress the importance of retaining copies of the sales material for future reference.(4)
An insurer to whom section (3) of this rule applies shall maintain the ability to produce from the policy file a copy of the letter or other verification sent to an applicant under section (3) of this rule for at least five years after the termination or expiration of the policy or contract.
Source:
Rule 836-080-0029 — Duties of Replacing Insurers that Use Agents, https://secure.sos.state.or.us/oard/view.action?ruleNumber=836-080-0029.