20-1241.01. Scope of article

A. This article applies to the replacement of policies and contracts except for the following:

1. Credit life insurance.

2. Except as provided in subsection B of this section, group policies and contracts that do not involve direct solicitation of individuals by an insurance producer.

3. Policies and contracts used to fund prearranged funeral agreements as defined in section 32-1301.

4. Except as provided in subsection C of this section, a policy or contract that is used to fund any of the following:

(a) An employee pension and welfare plan as defined by and that is subject to the employee retirement income security act of 1974 (29 United States Code sections 1001 through 1461).

(b) A plan described by sections 401(a), 401(k) or 403(b) of the internal revenue code, where the plan, for purposes of the employee retirement income security act of 1974, is established or maintained by an employer.

(c) A governmental or church plan as defined in section 414 of the internal revenue code, a governmental or church welfare benefit plan, or a deferred compensation plan of a state or local government or a tax exempt organization pursuant to section 457 of the internal revenue code.

(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.

5. An application to the existing insurer that issued the existing policy or contract:

(a) To exercise a contractual change or a conversion privilege.

(b) If the existing insurer is replacing the existing policy or contract pursuant to a program filed with and approved by the director.

(c) If a term conversion privilege is exercised among corporate affiliates.

6. Existing life insurance that is a nonrenewable and nonconvertible term life insurance policy that will expire in five years or less.

7. Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same insurer.

8. New coverage that is provided under a policy or contract if the insured's employer or an association of which the insured is a member bears all costs.

9. Immediate annuities that are purchased with proceeds from an existing contract. Immediate annuities purchased with proceeds from an existing policy are subject to this article.

10. Structured settlements as defined in section 12-2901.

11. The reinstatement of a life insurance policy pursuant to section 20-1213.

B. Group policies and contracts involving direct solicitation are subject to this article.

C. Notwithstanding subsection A of this section, this article applies to a policy or contract that is used to fund any plan or arrangement that meets all of the following requirements:

1. The plan or arrangement is funded solely by contributions an employee elects to make on a pretax or after tax basis.

2. The insurer has been notified that plan participants may choose from among two or more contract providers or policy providers.

3. The insurance producer directly solicits individual employees for the purchase of the contract or policy.

D. Registered contracts are exempt from the requirements of this article with respect to the provision of illustrations or policy summaries. Premium or contract contribution amounts and identification of the appropriate prospectus or offering circular are required.