Which of the following items must be formally documented when a policy is replaced?

When a policy is replaced, the necessity for formally documenting replacement forms stems from the requirement to ensure transparency and regulatory compliance within the insurance industry. Replacement forms are crucial documents because they provide necessary information regarding the new policy and details about the old policy being replaced. They serve to protect both the client and the insurer by ensuring that the client is fully aware of the implications of the change, including coverage differences, costs, and any potential loss of benefits.

Proper documentation using replacement forms helps ensure that all relevant regulatory requirements are met, mitigating the possibility of disputes arising from misunderstandings about the terms and conditions of the new policy versus the old one. This process is often mandated by state laws and is designed to safeguard consumers against potentially detrimental decisions when switching insurance policies.

In contrast, while communication with the client and sales history may be relevant to the overall context of the policy replacement and could serve as useful information, they do not have the formal necessity that replacement forms do. Client satisfaction surveys, although important for assessing service quality, are not inherently necessary for the documentation of the actual policy replacement process. Thus, the formal documentation of replacement forms is the requisite choice in this context.