2.2 - Producer Responsibilities Flashcards
Solicitation
A. Advertising
B. Do Not Call Registry
C. Sales Presentation
Advertising - (Solicitation)
Producers are governed under the rules and regulations, referred to as Unfair Trade Practices, with regard to what they can and cannot use or say when soliciting insurance.
Do Not Call Registry - (Solicitation)
The Federal Trade Commission amended the Telemarketing Sales Rule to give consumers a choice about whether they want to receive most telemarketing calls. It is prohibited under the Telephone Consumer Protection Act (TCPA) for most telemarketers or sellers to call a number listed on the National Do Not Call Registry. Companies, telemarketers, and sellers must update their list at least once every 31 days and drop from their call lists the phone numbers of consumers who have registered. Telephone solicitation calls to your home before 8 a.m. or after 9 p.m. are prohibited. Anyone making a telephone solicitation call to your home must provide their name, the name of the entity on whose behalf the call is being made, and a telephone number or address at which you may contact that entity.
Sales Presentation
Producers are required to provide all prospective buyers the following:
- Buyer’s Guide - A generic brochure developed by the NAIC to assist prospective buyers of life insurance. Descriptions of all basic types of life insurance, as well as comparative costs of each, are included.
- Policy Summary - Normally, a computer-generated illustration detailing:
- The premiums (current and guaranteed) to be paid along with current and guaranteed interest rates
- The guaranteed and non-guaranteed cash value and projected dividends, if any. The summary is not required to show the time value of money
- The surrender values and other guaranteed data pertaining to the policy that is being shown
- The producer’s name and address, along with the address of the insurance company - The NAIC instructs insurers to provide prospective purchasers a copy of the Buyer’s Guide and Policy Summary before accepting a premium payment or deposit, or no later than policy delivery IF the policy has a free look period of at least 10 days. State law may expand this requirement to require such documents be provided at the time of application or even at initial solicitation.
Policy Replacement
A. Replacement
B. Replacing Insurer
C. Exiting Insurer
D. Conservation
E. The Producer’s Responsibilities
F. The Replacing Insurer’s Responsibilities
Replacement - (Policy Responsibilities)
Any transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be:
- Lapsed, forfeited, surrendered, or terminated
- Reduced in value
- Amended with a reduction in benefit or term
- Reissued with a reduced cash value
- Subjected to borrowing
Replacing Insurer - (Policy Responsibilities)
The insurer responsible for issuing the new policy
Existing Insurer - (Policy Responsibilities)
The insurer who issued the policy to be replaced
Conservation - (Policy Responsibilities)
The act of saving or keeping the existing policy and preventing it from being replaced.
The Producer’s Responsibilities Include - (Policy Responsibilities):
- Completing a Notice Regarding Replacement, which must be signed by the applicant and producer
- Obtain information regarding any existing policies, including the names of the existing insurers and policy numbers (this must be provided to the replacing insurer)
- Providing copies of the Notice Regarding Replacement and any sales proposals to the applicant and replacing insurer
The Replacing Insurer’s Responsibilities Include - (Policy Responsibilities):
- Upon receiving proper notification with the new application, the replacing insurer must notify the existing insurer of the planned replacement
- Maintaining copies of the information regarding replacement for a specified period of time
