Nebraska insurance regulators are giving insurers in the state advice about how to proceed when they are replacing existing life insurance and annuity products.
A new Nebraska law requires a replacing insurer to notify each existing insurer that might be affected by a proposed replacement within 5 business days after receiving a replacement product application, or when the insurer discovers that it is replacing an existing product, if the applicant does not mention the existing product.
An insurer replacing a life policy should send the insurer that sold the existing policy a copy of the available illustration or policy summary for the proposed policy, Ann Frohman, director of the Nebraska Insurance Department, writes in a bulletin.
An insurer replacing an annuity should send the insurer that issued the existing annuity a copy of available disclosure document, Frohman writes.
The new law does not define annuity “disclosure document,” but the Nebraska department “would consider a prospectus or a ledger statement containing comparable data as sufficient disclosure documentation for the proposed annuity,” Frohman writes.
Replacing insurers that fail to give proper notice may be violating the Nebraska Unfair Insurance Trade Practices Act, Frohman writes.
A copy of the Nebraska replacement bulletin is available here.