New York Regulation 60 Agent Training

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New York Regulation 60 Agent Training
Presented by First Symetra National Life
Insurance Company of New York New York, NY
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What is NY Regulation 60?

• New Yorks replacement regulation
• Regulates insurers, agents, and other licensees
  with respect to replacements of life insurance
  policies and annuity contracts in the State of
  New York

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What is NY Regulation 60?

• Protects the public of New York by
• Establishing minimum conduct standards
• Requiring full and clear information
• Reducing misrepresentation and incomplete
  comparisons
• Precluding unfair competition and unfair practices

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What is a replacement?

• The term replacement of a life insurance policy
  or an annuity contract means that new life
  insurance or new annuities are to be purchased
  and delivered or issued for delivery in New York
  and it is known to the licensee that, as part of
  the transaction, existing life insurance policies
  or annuity contracts have been or are likely to
  be

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What is a replacement? (cont.)

• Lapsed, surrendered, partially surrendered,
  forfeited, assigned to the insurer replacing the
  life insurance policy or annuity contract or
  otherwise terminated

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What is a replacement? (cont.)

• Changed or modified into paid-up insurance
  continued as extended term insurance or under
  another form of non-forfeiture benefit or
  otherwise reduced in value by the use of
  non-forfeiture benefits, dividend accumulations,
  dividend cash values or other cash values

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What is a replacement? (cont.)

• Changed or modified so as to effect a reduction
  either in the amount of the existing life
  insurance or annuity benefit or in the period of
  time the existing life insurance or annuity
  benefit will continue in force

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What is a replacement? (cont.)

• Reissued with a reduction in amount such that any
  cash values are released including all
  transactions wherein an amount of dividend
  accumulations or paid-up additions is to be
  released on one or more of the existing policies

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What is a replacement? (cont.)

• Assigned as collateral for a loan or made subject
  to borrowing or withdrawal of any portion of the
  loan value, including all transactions wherein
  any amount of dividend accumulations or paid-up
  additions is to be borrowed or withdrawn on one
  or more existing policies or

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What is a replacement? (cont.)

• Continued with a stoppage of premium payments or
  reduction in the amount of premium paid
• Note If an annuity owner in a TSA stops
  contributing to one TSA and starts contributing
  to another TSA, this is a replacement.

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Exemptions to Reg 60

• New policies/contracts with same carrier and a
  contractual privilege is being exercised
• Standard policy change granted by carrier,
  assuming no harm to client
• New coverage is provided under
• Group policy/contract
• Cost of policy/contract is entirely with employer
• Mass-merchandised individual contracts
• Non-renewable/non-convertible policy with 5 years
  or less to expiration date

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Duties of NY Agent

• Before taking a New York application
• Client must complete sign the Definition of
  Replacement form
• LP-1256/NY for annuities
• LU-836 for life insurance
• If all questions are answered no, it is not a
  replacement and will be handled as regular new
  business
• Complete the application
• Attach a copy of LP-1256/NY or LU-836 (Definition
  of Replacement) to the application and submit to
  First Symetra
• Leave a copy of both LP-1256/NY or LU-836 and the
  application with the client

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Duties of NY Agent (cont.)

• If any question is answered yes on the
  Definition of Replacement form, Regulation 60
  requires the agent to
• Obtain list of all existing policies/contracts
  being replaced
• Notify existing Insurer and complete Disclosure
  Statement
• Present to applicant the Important Notice and
  completed Disclosure Statement
• Have applicant sign forms
• Submit with the application
• List of all existing policies and contracts
• Copy of proposal and sales material
• Completed Disclosure Statement
• Important Notice Regarding Replacement

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Duties of NY Agent (cont.)

• If an annuity contract or life insurance policy
  is being replaced by First Symetra
• Client will
• Assist agent in the completion of the Agent
  Request for Disclosure Information (LNC-344/NY or
  LU-834)
• List all existing policies/contracts to be
  replaced
• Sign and date form
• Agent will
• Mail or fax forms to First Symetra
• The replaced insurer may require original forms.

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Duties of NY Agent (cont.)

• If an annuity contract or life insurance policy
  is replaced
• First Symetra will
• Request information to complete Disclosure
  Statement
• Collect disclosure information from existing
  insurers
• Complete the comparison portion of the Disclosure
  Statement
• Complete the description of transaction
• Complete the summary result comparison
• If the comparative information requested from the
  existing insurer is not received by First Symetra
  within 20 days of their receipt of the request,
  the existing policy/contract values may be
  estimated.
• Return the form to the agent

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Duties of NY Agent (cont.)

• If an annuity contract or Life Insurance policy
  is being replaced by First Symetra
• Agent/Broker will
• Complete the Agent/Broker Statement section of
  the disclosure statement, sign and date
• Review the disclosure statement with the client
  and obtain clients signature date
• Obtain client signature date on Important
  Notice, LP-1255/NY or LU-835
• Complete Rollover/Transfer form, LP 1278/NY (for
  annuities)
• Complete Reg60 Sales Material Checklist,
  LMC-5187/NY or 5350
• Review all forms for signatures dates submit
  with application
• Income annuities quotes are considered sales
  material

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Duties of NY Agent (cont.)

• Important points to remember for New York
  replacements
• All sections of the disclosure form must be
  completed prior to the review with the applicant.
• All required information must be on the form.
• The completed disclosure form must be reviewed
  and signed by the applicant prior to the
  application or replacement paperwork being
  completed, signed and dated.
• The Reg60 Contact database must be used to
  contact the company whose coverage is being
  replaced.

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Duties of NY Agent (cont.)

• Important points to remember for New York
  replacements
• No money can be applied prior to Regulation 60
  requirements application completion
• The agent must complete the sales material
  checklist if any sales materials, including
  quotes, are used
• The client must read, complete, sign and date
  all forms

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Duties of Insurers

• Replacing Insurers Duties
• Inform and train agents
• Require and maintain pertinent forms
• Examine proposals for accuracy
• Furnish information to replaced insurer
• Submit annual report to Superintendent of
  Insurance regarding information on non-compliant
  insurer
• Reject applications not in compliance treat
  proposed coverage as new coverage
• Revise all materials if issued coverage differs
  from proposed coverage

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Duties of Insurers (cont.)

• Replaced Insurer
• Maintain copies of pertinent forms
• Respond within 20 days of receipt of request with
  information for Disclosure Statement
• Both
• Provide right to applicant to return
  policy/contract within 60 days
• Unconditional full refund of premium within 10
  days
• Provide right to applicant to reinstate
  policy/contract
• Without underwriting, new contestable/suicide
  clause

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Prohibited Transactions

• Make or give deceptive or misleading information
• Fail to ask applicant pertinent questions
  regarding replacement
• Record answer incorrectly
• Counsel applicant to answer no regarding
  replacement
• Counsel applicant to go directly to insurer to
  bypass agent responsibility or hide agent identity

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Submitting New Business

• All applicable replacement forms must be
  submitted with the application. If any
  requirements are missing and not received within
  10 days, the application will be returned to the
  applicant.
• First Symetra will verify all paperwork is
  submitted and in good order.
• Contact Sales Center at 800-706-0700 if you have
  questions.

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Contacts for Completing Replacement Disclosure
Forms

• Link to database for company contacts
• ins.state.ny.us/reg60/reg60contacts.htm
• Failure to use this database for gathering
  information on coverage being replaced may result
  in disciplinary action by the New York Insurance
  Dept.

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First Symetra National Life Insurance
Company of New York New York, NY