(b) Producer. In the event an existing policy, certificate, or annuity contract that is used to fund a prepaid funeral benefits contract is replaced with another policy, certificate, or annuity contract, or a prepaid funeral benefits contract is otherwise cancelled or transferred for the purpose of obtaining a new funeral provider, the producer who initiates the replacement or transaction shall comply with the following requirements:

1. (1) The producer shall:

   1. (A)

(i) Present and read to the applicant, not later than at the time of taking the application, a notice regarding replacements in the form as described in Appendix A in this part.

1. (ii) The notice shall be signed by both the applicant and the producer attesting that the:

(b) (b) Applicant did not wish the notice to be read aloud (in which case the producer need not have read the notice aloud);

1. (B) Leave a copy of the signed notice with the applicant; and

   1. (C) Send a copy of the signed notice to the seller of the original prepaid funeral benefits contract along with the completed Form AID-FI-C3 as provided in 23 CAR § 111-106(d); and

2. (2) Compliance with subdivision (b)(1) of this section shall satisfy a producer's:

   1. (A) Requirement to furnish to the policyholder a written memorandum meeting the requirements of Arkansas Code § 23-66-307(b)(1); and

   2. (B) Compliance with the requirements of Life Insurance and Annuities Replacement, 23 CAR pt. 128.

      1. (c) Replacing insurer. In the event an existing policy, certificate, or annuity contract that is used to fund a prepaid funeral benefits contract is replaced with another policy, certificate, or annuity contract that will be used to fund a prepaid funeral benefits contract, or a prepaid funeral benefits contract is otherwise cancelled or transferred for the purpose of obtaining a new funeral provider, the replacing insurer shall comply with the following requirements:
3. (1) Verify that the required forms are received and are in compliance with this section;
4. (2) Notify any other existing insurer that may be affected by the proposed replacement within fifteen (15) business days of receipt of a completed application indicating replacement or when the replacement is identified if not indicated on the application; and

5. (3) Provide to the policy or contract owner written notice of the right to return the policy or contract within thirty (30) days of the delivery of the contract and receive:

   1. (A) An unconditional full refund of all premiums or considerations paid on it, including any policy fees or charges; or
   2. (B) In the case of a variable or market value adjustment policy or contract, a payment of the cash surrender value provided under the policy or contract plus the fees and other charges deducted from the gross premiums or considerations or imposed under such policy or contract.