Key Takeaways
- Connecticut requires detailed written notice and comparison when replacing life insurance or annuities
- Producers must provide a Replacement Notice to the applicant
- The replacing insurer must notify the existing insurer
- Records of replacement transactions must be maintained
- Twisting (misrepresenting to induce replacement) is a serious violation
Last updated: January 2026
Connecticut Replacement Rules
Replacement occurs when a new life insurance policy or annuity is purchased with the intent to terminate or reduce an existing policy. Connecticut has detailed regulations to protect consumers.
Definition of Replacement
A replacement occurs when a new policy is purchased and:
- An existing policy is lapsed, forfeited, or surrendered
- Policy values are reduced or borrowed
- Coverage is converted or reduced
- Policy is reissued with reduced values
Required Disclosures
Replacement Notice
The producer must provide the applicant with a Replacement Notice that includes:
| Item | Requirement |
|---|---|
| Comparison | Side-by-side of existing and new policy |
| Surrender Values | Current and projected values |
| Death Benefits | Comparison of coverage amounts |
| Premium Costs | Cost difference over time |
| Surrender Charges | Charges for early termination |
| New Contestability | New 2-year period starts |
Prohibited Practices
Twisting
Twisting is misrepresenting the terms of an existing policy to induce replacement:
- Falsely claiming existing policy is "worthless"
- Misrepresenting surrender values
- Hiding surrender charges of replacement
- Exaggerating benefits of new policy
Churning
Churning is excessive replacement of policies to generate commissions:
- Multiple replacements in short periods
- Same client replacing policies repeatedly
- Commission-driven motivation
Penalties
Violations can result in:
- License suspension or revocation
- Fines per violation
- Civil liability to harmed consumers
Test Your Knowledge
What is twisting in Connecticut insurance law?
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Test Your Knowledge
When a life insurance policy is replaced in Connecticut, what happens to the incontestability period?
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D