- (a) The purpose of the fee is to defray the administrative costs of the seller in effecting the policyholder-initiated transfer or cancellation.
- (b) The fee may be paid by either the policyholder or the substitute provider.
(c) Any seller or funding life insurance company who intends to collect the fee shall give written notice in the contract that the policyholder may be responsible to pay the fee in the event the policyholder chooses to:
- (1) Transfer the contract to a substitute provider; or
- (2) Cancel the contract.
- (d) Sellers who sell cash-funded contracts are allowed to collect the fee upon any policyholder initiated transfer or cancellation.