Hawkeye State regulators say insurers should do a better job of complying with life insurance and annuity replacement regulations.
Iowa Insurance Commissioner Susan Voss has issued a document, Bulletin 08-06, that urges insurers to make sure their replacement forms meet the standards set out in Iowa regulations, which were adopted in 2000 and are based on a model developed by the National Association of Insurance Commissioners, Kansas City, Mo.
“It has come to the attention of the Commissioner that, in the past 6 months, approximately 20 carriers have filed forms that did not comply with the Iowa replacement regulations,” Voss writes in the bulletin.
“A common error observed in recent filings is the failure to use the required replacement questions on the filed application forms,” Voss writes.
Voss also notes that both purchasers and producers must sign a replacement notice form when a potential purchaser has existing policies or contracts.
“Carriers should have a process in place to ensure that these notices are provided and signed,” Voss writes. “Carriers that are not currently filing proper forms may have otherwise failed to comply with the Iowa replacement regulation and failed to give proper disclosure notices to consumers.”
Carriers should conduct internal reviews to make sure they are complying with the replacement regulations, Voss writes.
Carriers that have problems should correct the problems and report the problems to the insurance division, Voss writes.