211 CMR 34.02 - Definitions

Current through Register 1466, April 1, 2022

The following words as used in 211 CMR 34.01 through 34.08, inclusive, shall, unless the context clearly requires otherwise, have the following meanings:

Conservation, any attempt by theexistinginsureror its agent or broker to dissuade a policy owner from the replacement of existing life insurance or annuity. Conservation does not include routine administrative procedures such as late payment reminders, late payment offers or reinstatement offers.

Direct-response sales, any sale of life insurance or annuity where the insurer does not utilize an agent in the sale or delivery of the policy.

Existing insurer, the insurance company whose policy is or will be changed or terminated as provided in the definition of "replacement".

Existing life insurance or annuity, any life insurance or annuity in force, including life insurance under a bindingor conditionalreceipt or a life insurance policy or annuity that is within an unconditional refund period.

Registered contract, variable annuities, investment annuities, variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account, or any other contracts issued bylife insurance companies which are registered with the federal Securities and Exchange Commission.

Replacement, any transaction in which new life insurance or a new annuity is to be purchased, and it is known or should be known to the proposing agent or broker or to the proposing insurer if there is no agent, that by reason of such transaction, existing life insurance or annuity has been or is to be:

(a) lapsed, forfeited, surrendered or otherwise terminated;

(b) converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;

(c) amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;

(d) reissued with any reduction in cash value; or

(e) pledged as collateralor subjected to borrowing, whether in a single loan or under a schedule of borrowing over a period oftime for amounts in the aggregate exceeding 25% of the loan value set forth in the policy.

Replacing insurer, the insurance company that issues or proposes to issue a new policy or contract which is a replacement of existing life insurance or annuity.


211 CMR 34.02

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