The Replacement Sale That Went Sideways

Three distinct failures, with different harms.

1. Replacement notice never transmitted. The point of replacement regulation is disclosure: the existing insurer must be able to compare and conserve, and the buyer must be able to make an informed comparison. Karen completed the form and then suppressed it, which is worse than not completing it - the file now misrepresents what happened. That is a recordkeeping failure and an unfair trade practice, and it means the replacement was never properly documented for market-conduct review.
2. Paying the first premium herself. Using her own money as an inducement to buy is a rebate - an illegal inducement even when generous in intent. It is also unfairly discriminatory (not offered to all buyers of the same class), and it corrupts the premium record: no premium was actually collected from Marcus, so the insurer's own file is false and the 'paid' policy may not be validly in force.
3. Soliciting without appointment. A producer license alone does not authorize her to submit business for a particular insurer; appointment is the insurer's authorization. Writing this policy unappointed violates the appointment requirement and exposes the insurer for accepting business from an unappointed producer.

Also flag the fiduciary angle: premiums collected belong in trust and must be remitted promptly; paying from personal funds conceals that nothing was remitted.

On the statute, probably not; on the facts, he has leverage anyway.

• Free-look periods for individual life policies are short - commonly 10 days from delivery (confirm the current Wyoming period, and read the policy, since many forms give the longer of 10 days after delivery or 45 days after application, and replacement policies sometimes get a longer window). Delivered April 2, returned April 16 = day 14, past a 10-day window.
• Outside free look, he can still cancel prospectively and receive the unearned premium or any cash value under the policy's nonforfeiture and premium-refund provisions. At 14 days the cash value is likely zero, so what he recovers is unearned premium, not the full amount he is asking for.
• Two facts undercut the clean answer. First, the replacement notice was never delivered to the existing insurer - the sale itself is defective. Second, Marcus never paid the premium; Karen did. A policy 'paid' by the producer is not a normal paid policy, and an insurer is unlikely to defend keeping money nobody paid.

Practical conclusion: no automatic statutory right to a full refund on day 14, but a complaint plus the unappointed/rebate/replacement facts make rescission with a full return of funds the realistic outcome. Verify the policy's free-look and reinstatement language and the current Wyoming life free-look statute before answering a client.

Both, but for different reasons.

• Karen carries the direct duty to give the required replacement notice and to keep accurate records; she is the one who generated and withheld the document. Discipline can include fines, license suspension or revocation, and CE orders.
• The insurer is responsible for the acts of its appointed producers and for its own supervision and recordkeeping obligations - replacing insurers must be able to produce a replacement file on examination. But note the twist: because Karen was not appointed, the insurer has two problems, not one. It can argue it had no supervisory relationship, and that argument simultaneously admits it accepted business produced by an unappointed person, which is itself a violation.
• Remedy for the consumer: reinstatement of the replaced coverage if it can still be obtained, cancellation of the new policy, and restitution. Regulators generally will not let the insurer void the policy and leave the client worse off for an internal appointment failure.

Answer structure examiners reward: name the parties, separate producer-conduct duties from insurer-supervision duties, and note that the appointment defect cuts both ways.