A producer in Denver asks which transactions fall outside Colorado's life insurance replacement rules under Reg. 4-1-4. The correct answer is:

Why C is correct

Reg. 4-1-4 excludes credit life insurance and group life coverage that is not individually solicited from its replacement requirements. Individual life-to-life exchanges — whether whole life for universal life, term replacements, or replacements handled by a different producer — remain within the regulation's notice, statement, and recordkeeping rules.

Why the other options are wrong

• A) A whole life to universal life exchange is a classic individual replacement and is fully subject to Reg. 4-1-4.
• B) Replacing an individual term policy through a new application is an individual replacement covered by the regulation.
• D) Which producer handles the sale does not remove a transaction from the replacement rules; the individual transaction itself is covered.

Memory hook

Credit and untouched group skip the replacement paperwork.

Why B is correct

Colorado Insurance Regulation 4-1-4 governs life replacements, but credit life insurance and non-solicited group life are carved out of its scope. These products arise from credit transactions or employer-group arrangements rather than an agent-induced switch, so the notice-and-record machinery aimed at twisting does not apply. Individually solicited life sales — including same-insurer exchanges and payroll-deduction sales following a producer's presentation — remain fully subject to the regulation.

Why the other options are wrong

• A) A face-to-face individually sold term policy is the classic replacement fact pattern and is squarely covered by the regulation.
• C) A producer-involved exchange for a new policy at the same insurer is still a replacement under the regulation.
• D) Payroll deduction does not remove a policy from the regulation when the sale itself was individually solicited.

Memory hook

Credit life and quiet group life opt out; every solicited switch stays in.