Key Takeaways
- Oklahoma requires detailed written notice when replacing life insurance or annuities
- Producers must provide comparison of existing and proposed coverage
- Replacing insurer must maintain replacement records
- Twisting and churning are prohibited replacement practices
- New contestability and suicide periods begin with replacement policies
Last updated: January 2026
Oklahoma Replacement Rules
Replacement occurs when a new life insurance policy or annuity is purchased with the intent to terminate, surrender, or reduce coverage under an existing policy. Oklahoma has regulations to protect consumers from unsuitable replacements.
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
- Policy is amended to reduce benefits
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 costs of replacement
- Exaggerating benefits of new policy
Churning
Churning is excessive replacement to generate commissions:
- Multiple replacements for same client
- Pattern of replacements in producer's book
- Ignoring client's best interests
- Creating new surrender charge periods
Test Your Knowledge
What is the term for misrepresenting an existing policy to induce replacement in Oklahoma?
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