When must the insurer notify each insurer whose insurance is being replaced?

The correct answer is that the insurer must notify each insurer whose insurance is being replaced within 5 working days. This timeframe is stipulated in order to ensure proper communication and uphold the integrity of the insurance replacement process. When a policyholder decides to replace an existing policy with a new one, timely notification to the insurer of the existing policy is crucial. It allows the insurer to verify the information provided by the policyholder and ensure that all regulatory requirements are met.

Prompt notification serves several important purposes. It helps prevent lapses in coverage for the insured, enables the former insurer to take note of the potential cancellation of the policy, and provides the existing insurer with the opportunity to discuss the implications of replacement with the policyholder. Furthermore, regulatory bodies emphasize the need for transparency in insurance transactions, and this requirement aligns with that goal.

The specified 5 working days reflects a balance between the need for efficiency in the bureaucratic processes typically involved in insurance transactions and the necessity to afford policyholders adequate time to consider their options carefully without undue pressure.