September 30, 2010
The Lieutenant Governor in Council makes the Replacement of Life Insurance Contracts Amendment Regulation set out in the attached Appendix.
REPLACEMENT OF LIFE
1 The Replacement of Life Insurance Contracts Regulation (AR 127/2001) is amended by this Regulation.
2 Section 2 is repealed and the following is substituted:
Inducement or recommendation to replace contract
2 An insurer or insurance agent must not, where it would be detrimental to the interests of the policyholder,
(a) directly or indirectly induce or attempt to induce a policyholder to effect a replacement of a contract, or
(b) recommend the replacement of a contract.
3 Section 3 is repealed and the following is substituted:
Agent or insurer’s duty where replacement could be detrimental
3 Where a replacement of a contract is initiated that, in the opinion of an insurer or an insurance agent, would be detrimental to the policyholder’s interests, the insurer or insurance agent must advise the policyholder of the advantages and disadvantages to the policyholder that would result from the replacement.
4 Section 5 is repealed and the following is substituted:
Declaration statement on replacement
5 Where a replacement of a contract is recommended by an insurance agent or instructed by a policyholder, the insurance agent must, prior to taking a new application,
(a) present to and review with the applicant a declaration statement in a form approved by the superintendent, and
(b) obtain on the declaration statement the signature of the applicant or other person whose life will be insured under the replacement contract to indicate receipt of the declaration statement by the applicant or other person.
5 Section 6 is amended by striking out “for an insurer” after “An insurance agent”.
6 Section 7 is repealed and the following is substituted:
Delivery of contract
7 Where an insurer has issued a contract and gives the contract to an insurance agent for delivery to the applicant, the insurance agent must deliver the contract to the applicant as soon as is practicable unless contrary written instructions are received from the applicant.
7 Section 8 is amended by striking out “policy” and substituting “contract”.
8 Section 9 is amended by striking out “completed disclosure” and substituting “declaration”.
9 Section 10 is amended by striking out “policy” wherever it occurs and substituting “contract”.