3 AAC 26.800 - Duties of an insurer that uses an insurance producer

An insurer shall

(1) maintain a system of supervision and control designed to ensure compliance with the requirements of 3 AAC 26.790 - 3 AAC 26.819 that at a minimum includes

(A) informing the insurer's insurance producers of the requirements of 3 AAC 26.790 - 3 AAC 26.819 and incorporating the requirements of 3 AAC 26.790 - 3 AAC 26.819 into all relevant insurance producer training manuals prepared by the insurer;

(B) providing each of the insurer's insurance producers with a written statement of the insurer's position with respect to the acceptability of replacements and providing guidance to its insurance producers relative to the appropriateness of replacements;

(C) implementing a system to review the appropriateness of each replacement that the insurance producer does not indicate is in accordance with the insurer's position in (B) of this paragraph;

(D) implementing procedures to confirm that the requirements of 3 AAC 26.790 - 3 AAC 26.819 are met;

(E) implementing procedures to detect transactions that are replacements but are not reported as replacements by the applicant or insurance producer; those procedures may include

(i) systematic customer surveys;

(ii) interviews;

(iii) confirmation letters; and

(iv) programs of internal monitoring;

(2) have the capacity to monitor each of its insurance producer's life insurance policy and annuity contract replacements and, upon request, provide to the director a report for each insurance producer showing the number of

(A) life insurance policy replacements and financed purchases as a percentage of the insurance producer's total annual life insurance sales;

(B) lapses of life insurance policies sold by the insurance producer as a percentage of the insurance producer's total annual sales of life insurance policies;

(C) annuity contract replacements as a percentage of the insurance producer's total annual sales of annuity contracts;

(D) unreported replacements by the existing insurer detected by the insurer's monitoring system under (1)(E) of this section; and

(E) replacements indexed by the replacing insurance producer and existing insurer;

(3) require with or as part of each application for a life insurance policy or an annuity contract a signed statement by both the applicant and the insurance producer indicating whether the applicant has an existing life insurance policy or annuity contract;

(4) require with each application for a life insurance policy or an annuity contract that indicates the applicant has an existing life insurance policy or annuity contract a completed notice regarding replacements that conforms with Appendix A of 3 AAC 26.795;

(5) for an applicant with an existing life insurance policy or annuity contract, retain for at least five years after termination or expiration of a proposed life insurance policy or annuity contract copies of

(A) any sales material required under 3 AAC 26.795;

(B) the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased; and

(C) the insurance producer's and applicant's signed statements with respect to financing and replacement;

(6) assure that the sales material and illustrations required under 3 AAC 26.795 meet the requirements of 3 AAC 26.790 - 3 AAC 26.819 and are complete and accurate for the proposed life insurance policy or annuity contract;

(7) if an application does not meet the requirements of 3 AAC 26.790 - 3 AAC 26.819,

(A) notify the insurance producer and the applicant that the application does not meet the requirements; and

(B) modify the application to meet the requirements; and

(8) maintain records in a manner that accurately reproduces the actual document.

Notes

3 AAC 26.800

Eff. 7/25/2008, Register 187

In 2010 the revisor of statutes, acting under AS 01.05.031, renumbered former AS 21.36.150 as AS 21.36.900. As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125(b)(6), to the authority citation that follows 3 AAC 26.800, so that the citation to former AS 21.36.150 now refers to the renumbered statute, AS 21.36.900.

Authority:AS 21.06.090

AS 21.36.020

AS 21.36.030

AS 21.36.040

AS 21.36.050

AS 21.36.900