What action is REQUIRED by a producer who is replacing an existing life insurance policy?

A producer who is replacing an existing life insurance policy must submit to the replacing insurer a list of the policies to be replaced. This action is essential because it ensures that the new insurer and the insured are aware of the existing coverage that is being eliminated. It helps to prevent situations where the insured might unknowingly be without coverage or might compromise their insurance needs.

By providing a list of the policies to be replaced, the producer also allows the new insurer to assess the existing coverage and make informed recommendations. The practice is put in place to promote transparency and protect the interests of the insured during the replacement process. This requirement aligns with industry regulations designed to safeguard consumers and ensure they receive the best possible advice and coverage options.

The other options, while important in the overall process of policy replacement, do not carry the same mandatory nature as the submission of a list to the replacing insurer. For instance, notifying the insured about the change and obtaining a written statement from the insured are also best practices, but the list submission is critical to the legislation surrounding policy replacements and helps the new insurer properly assess risk.