State RegulationsNY specificDifficulty 2/5
A New York agent convinces a client to drop an existing long-term care policy and buy a new one the agent recommends. Under Reg 62, which action must accompany this sale?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Reg 62 (11 NYCRR Part 52), replacing long-term care insurance in New York is a regulated transaction: the sale must be identified as a replacement, and the required disclosure and notices must put both the existing insurer and the replacing insurer on notice of what is happening. That paperwork is what allows someone to check that the client is not trading away rights and protections already earned under the existing policy.
Why the other options are wrong
- B) Existing coverage is precisely why the rules exist - an applicant who already owns a policy is the person most at risk of silently losing accrued protections.
- C) A physician's sworn statement is not part of the replacement procedure; medical evidence goes to underwriting, not to replacement disclosure.
- D) Canceling the old policy first would strip the client of coverage before the new policy is even underwritten; the replacement rules exist to prevent exactly that sequence.
Memory hook
Replace LTC coverage? Say so on paper - both insurers must know.