Under Virginia's rules governing the replacement of health insurance, what must the replacing producer do with respect to the applicant's existing coverage when arranging a replacement policy?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Virginia's health replacement regulation, 14 VAC 5-141-150, places disclosure duties on the replacing side: the producer must make sure the applicant receives a notice describing the replacement and its possible effects — such as new pre-existing-condition treatment — and must obtain information about the existing coverage so the parties understand what is being replaced. These duties exist because replacements can leave insureds with new waiting periods or lost benefits they did not anticipate. The Virginia Bureau of Insurance treats skipping these steps as a regulatory violation.
Why the other options are wrong
- B) The existing insurer's permission is not required; the rule protects the applicant through notice, not through a veto by the old insurer.
- C) Redirecting premium payments is not part of the replacement procedure; the producer's duty is disclosure, not payment handling.
- D) Secrecy is the opposite of the rule — the replacement process is built on written notice and information about the existing coverage.
Memory hook
Replace with notice: tell the applicant what changes and gather the old coverage facts.