State RegulationsIL specificDifficulty 1/5
Under the Illinois replacement rule, the "existing insurer" is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under 50 Ill. Adm. Code 917, the existing insurer is the company whose policy the proposed transaction will disturb — by lapse, surrender, forfeiture, conversion to reduced paid-up, borrowing, or use of its values to fund the new purchase. The designation gives that insurer a protected role in the process: it is entitled to notice from the replacing insurer so it can supply the policyowner with an accurate summary of the policy about to be replaced.
Why the other options are wrong
- B) The producer's licensing history has no connection to the insurer roles in a replacement.
- C) The definition depends on an issued policy being disturbed, not on the sequence of applications.
- D) Guaranty-association administration is unrelated to replacement terminology under 50 Ill. Adm. Code 917.
Memory hook
Existing insurer: the one losing the policy. Replacing insurer: the one taking it.