State RegulationsTX specificDifficulty 1/5
Before issuing a new policy in a Texas replacement transaction, what must the replacing insurer obtain from its agent?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 1114.051-.057, the replacing insurer must require its agent to submit, with the application, the applicant's signed statement about replacement, the replacement notice signed by the applicant and the agent, and copies of any sales proposal used, and the insurer relies on those documents to show compliance. Practically, a Texas insurer that issues without this paperwork has no file proof of disclosure and is exposed to a department action even if the replacement was genuinely suitable.
Why the other options are wrong
- A) is wrong because no certificate from the existing insurer is a condition of issuing the new policy.
- B) is wrong because the replacement notice is a mandatory consumer protection that the applicant cannot waive.
- C) is wrong because the department issues no opinion on the merits of an individual replacement.
Memory hook
No signed notice and statement, no issued policy.