Section 3.26.800. Duties of an insurer that uses an insurance producer.

An insurer shall  
		(1) maintain a system of supervision and control designed to ensure compliance with the requirements of 3 AAC 26.790 - 3 AAC 26.819 that at a minimum includes  
			(A) informing the insurer's insurance producers of the requirements of 3 AAC 26.790 - 3 AAC 26.819 and incorporating the requirements of 3 AAC 26.790 - 3 AAC 26.819 into all relevant insurance producer training manuals prepared by the insurer;  
			(B) providing each of the insurer's insurance producers with a written statement of the insurer's position with respect to the acceptability of replacements and providing guidance to its insurance producers relative to the appropriateness of replacements;  
			(C) implementing a system to review the appropriateness of each replacement that the insurance producer does not indicate is in accordance with the insurer's position in (B) of this paragraph;  
			(D) implementing procedures to confirm that the requirements of 3 AAC 26.790 - 3 AAC 26.819 are met;  
			(E) implementing procedures to detect transactions that are replacements but are not reported as replacements by the applicant or insurance producer; those procedures may include  
				(i) systematic customer surveys;  
				(ii) interviews;  
				(iii) confirmation letters; and  
				(iv) programs of internal monitoring;  
		(2) have the capacity to monitor each of its insurance producer's life insurance policy and annuity contract replacements and, upon request, provide to the director a report for each insurance producer showing the number of  
			(A) life insurance policy replacements and financed purchases as a percentage of the insurance producer's total annual life insurance sales;  
			(B) lapses of life insurance policies sold by the insurance producer as a percentage of the insurance producer's total annual sales of life insurance policies;  
			(C) annuity contract replacements as a percentage of the insurance producer's total annual sales of annuity contracts;  
			(D) unreported replacements by the existing insurer detected by the insurer's monitoring system under (1)(E) of this section; and  
			(E) replacements indexed by the replacing insurance producer and existing insurer;  
		(3) require with or as part of each application for a life insurance policy or an annuity contract a signed statement by both the applicant and the insurance producer indicating whether the applicant has an existing life insurance policy or annuity contract;  
		(4) require with each application for a life insurance policy or an annuity contract that indicates the applicant has an existing life insurance policy or annuity contract a completed notice regarding replacements that conforms with Appendix A of 3 AAC 26.795;  
		(5) for an applicant with an existing life insurance policy or annuity contract, retain for at least five years after termination or expiration of a proposed life insurance policy or annuity contract copies of  
			(A) any sales material required under 3 AAC 26.795;  
			(B) the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased; and  
			(C) the insurance producer's and applicant's signed statements with respect to financing and replacement;  
		(6) assure that the sales material and illustrations required under 3 AAC 26.795 meet the requirements of 3 AAC 26.790 - 3 AAC 26.819 and are complete and accurate for the proposed life insurance policy or annuity contract;  
		(7) if an application does not meet the requirements of 3 AAC 26.790 - 3 AAC 26.819,  
			(A) notify the insurance producer and the applicant that the application does not meet the requirements; and  
			(B) modify the application to meet the requirements; and  
		(8) maintain records in a manner that accurately reproduces the actual document.  

Authorities

21.06.090;21.36.020;21.36.030;21.36.040;21.36.050;21.36.900;01.05.031;21.36.150;44.62.125

Notes

Authority

AS 21.06.090 AS 21.36.020 AS 21.36.030 AS 21.36.040 AS 21.36.050 AS 21.36.900 Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031, renumbered former AS 21.36.150 as AS 21.36.900. As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125(b)(6), to the authority citation that follows 3 AAC 26.800, so that the citation to former AS 21.36.150 now refers to the renumbered statute, AS 21.36.900.

History

Eff. 7/25/2008, Register 187

References

3.26.800