Virginia Law

A. Where a replacement is involved in the transaction, the replacing insurer shall:

1. Verify that the required forms are received and are in compliance with this chapter;

2. 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;

3. Be able to produce copies of the notification regarding replacement required in 14VAC5-30-40 B, indexed by agent, for at least five years; and

4. Provide to the policy or contract owner notice of the right to examine the policy or contract for at least 10 days from the delivery of the policy or contract and the right of return to 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 contract, a payment of the cash surrender value provided under the contract plus the fees and other charges deducted from the gross premiums or considerations or imposed under the contract. The notice may be included in Form 30-A or 30-C.

B. In transactions where the replacing insurer and the existing insurer are the same or subsidiaries or affiliates under common ownership or control, credit shall be allowed for the period of time that has elapsed under the replaced policy's or contract's incontestability and suicide period up to the face value of the existing policy or contract. With regard to financed purchases, the credit may be limited to the amount the face value of the existing policy is reduced by the use of existing policy values to fund the new policy or contract.

C. If an insurer prohibits the use of marketing communication other than that approved by the company, as an alternative to the requirements made of an insurer pursuant to 14VAC5-30-40 E, the insurer may:

1. Require with each application a statement signed by the agent that:

a. Represents that the agent used only company-approved marketing communications; and

b. States that copies of all marketing communications were left with the applicant in accordance with 14VAC5-30-40 D; and

2. Within 10 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 agent has represented that copies of all marketing communications have been left with the applicant in accordance with 14VAC5-30-40 D;

b. Provide the applicant with a toll-free number to contact company personnel involved in the compliance function if compliance did not occur;

c. Stress the importance of retaining copies of the marketing communications for future reference; and

3. Be able to produce a copy of the letter or other verification in the policy file for at least five years after the termination or expiration of the policy or contract.