A replacing insurer receives a completed life insurance application indicating that an existing policy will...

B. 5 business days is correct. Hawaiʻi's life insurance and annuity replacement framework imposes specific duties on a replacing insurer once a replacement transaction has been identified. The insurer must verify that required replacement documentation has been received and must notify any existing insurer that may be affected by the replacement within five business days after receiving a completed application indicating replacement, or within five business days after identifying a replacement that was not initially disclosed on the application.

This requirement is designed to give the existing insurer prompt notice so it can provide relevant policy information to the policyowner and ensure that the consumer understands what may be lost by replacing the existing contract. Replacement can affect cash values, surrender charges, guarantees, premiums, and contestability or suicide periods.

Option C is incorrect because ten days is not the statutory notification period between the replacing and existing insurers. Thirty days relates to another important replacement protection—the policyowner's right to return the newly issued replacement contract. Three business days is also unsupported.

The current Hawaiʻi examination outline specifically tests replacement , including producer and insurer responsibilities.

Reference topics: HRS §§431:10D-503 through 431:10D-506; Replacement; Replacing Insurer Duties; Existing Insurer Notification.

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