State RegulationsPA specificDifficulty 2/5
A policyowner is considering replacing an existing life policy and asks the producer how the two contracts compare if surrendered early. Under 31 Pa. Code 83.51 through 31 Pa. Code 83.57, the disclosure designed to let consumers compare the cash surrender values of policies in a replacement situation is the:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
31 Pa. Code 83.51 through 31 Pa. Code 83.57 create the surrender comparison index disclosure for life insurance replacements. When an existing policy is being replaced, the index lets the consumer compare the cash surrender values of the old and proposed policies over time, exposing how a new policy's early values compare with the policy being given up. It is a replacement-specific protection that sits on top of the general disclosure statement requirements of 31 Pa. Code Ch. 83.
Why the other options are wrong
- A) A premium-to-face ratio describes cost per dollar of coverage but is not the surrender-value comparison device the rules prescribe.
- C) The statutory annual statement is a solvency filing made to the Pennsylvania Insurance Department, not a consumer comparison document.
- D) The producer's replacement register documents replacement activity for compliance purposes; it is not the consumer disclosure.
Memory hook
Replacing a policy? The surrender comparison index shows what you give up.