Which type of insurance company is required to keep the aforementioned records related to policy replacements?

The replacing insurance company is required to keep records related to policy replacements because it directly engages in the process of replacing an existing policy with a new one. When a policyholder decides to switch their coverage from one insurer to another, the new insurer must maintain detailed documentation of this replacement. This is important not only for regulatory compliance but also for ensuring that the policyholder fully understands the implications of the replacement, including coverage differences, potential gaps in coverage, and any associated costs or penalties.

Keeping thorough records helps to protect consumers by fostering transparency and accountability in the industry. Regulators mandate this record-keeping to prevent misleading practices or lapses in coverage that might occur during the transfer from one policy to another. Thus, it is the replacing insurance company's responsibility to ensure all relevant information is documented and accessible, which aids in consumer protection and regulatory oversight in the insurance market.