California Insurance Code & EthicsQuestion 71 of 315
After a life insurance policy is replaced under California rules, the existing insurer has the right to:
a.Charge the policyowner a replacement fee
b.Conserve the policy by communicating with the policyowner during the notice period
c.Refuse to accept a replacement notice from the agent
d.Cancel the existing policy immediately without any conservation effort
Explanation
Under §§10509 and 10 CCR §§2534+, the existing insurer is given the chance to conserve the policy, including by sending a comparison and contacting the owner. The replacing insurer and agent must give proper notice so this right is preserved.
Law Reference: Cal. Ins. Code §10509Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)