States that have "no loss no gain" laws require a replacing policy to?

"No loss no gain" laws are designed to protect consumers during the replacement of an existing insurance policy. When a new policy is issued to replace a current one, these laws ensure that the insured will not suffer a financial disadvantage due to the change.

The correct answer reflects the principle that the replacing policy must pay for ongoing claims under the policy it replaces. This means that if a consumer has a claim in process when they switch to a new policy, the new insurer will take on the responsibility of paying that claim, ensuring that the insured does not lose benefits they are entitled to simply because they decided to change their insurance coverage. This provision safeguards policyholders during transitions, fostering trust in the insurance process.

The other options do not properly reflect the intent of "no loss no gain" laws. Immediate payment of claimed benefits, cancellation of the existing policy, and increasing coverage limits are not standard requirements for a policy replacement under these laws. Instead, the key focus is on maintaining continuity of coverage and ensuring that policyholders are not left at a disadvantage during the transition.