L&HGeorgiamedium
Under Ga. Comp. R. & Regs. 120-2-24, which of the following transactions would NOT be considered a 'replacement' subject to the regulation?
ASurrendering an existing whole life policy and using the cash value to fund a new universal life policy
BTaking a maximum policy loan on an existing contract to pay premiums on a newly issued policy
Reducing the face amount of an existing policy to create a paid-up addition under the same contract
DAllowing an existing policy to lapse within 13 months of issuing a new policy from another insurer
Why this is the answer
Surrenders to fund a new policy, lapses within 13 months of new issue, and using existing policy loans or values to pay premiums on new coverage all meet GA's definition of replacement. Adjusting face amount or generating paid-up additions inside the same existing contract does not trigger the rule because no new contract from a different insurer or product line is being issued.
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