State RegulationsVA specificDifficulty 2/5
A Virginia producer completes the paperwork to replace a client's individual health policy with coverage from a different insurer. Under the replacement rules (14 VAC 5-141-150), what role does the existing insurer play once it learns of the replacement?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Virginia's health replacement regulation (14 VAC 5-141-150) gives the existing insurer a protective role: it is notified of the proposed replacement so that it can alert the policyholder to what the switch means — including any new pre-existing-condition treatment or lost benefits — and preserve the coverage it already issued. The rule treats the existing insurer as a check on incomplete sales pitches, not as an obstacle. This notification structure, together with the replacing producer's notice duties, is how Virginia keeps health replacements fair to the consumer.
Why the other options are wrong
- A) The existing insurer is never required to upgrade benefits to compete with a replacement; its role is informational and protective.
- B) The applicant's signature does not end the process — the existing insurer is deliberately brought in to protect the policyholder.
- D) The existing insurer cannot veto a replacement by withholding records; the regulation channels its involvement through notice to the policyholder.
Memory hook
The old insurer gets a heads-up so the policyholder hears both sides of the switch.