copy rows from one tabel into another without duplicating in second table - sql-server-2005

Question

l have two tables, Table1 columns as follows:
id surname level term pyear status
a1 peterson form1 first_term 2014 active
a2 chanaka form1 first_term 2014 active
Table2 columns pretty much similar to Table1 as follows:
id surname level term pyear
Table1 Primary Key:id
Table2 Primary Key:(id,level, term, pyear)
Here is the scenario, Table1 records can only be inserted once and once inserted, a record can then be updated such that level, term and pyear can change, e.g level and pyear change at the same time because l can only upgrade records from say form1 to form2 at once when moving from 2014 to 2015. As for, term, the same level and year can have first_term, second_term and third_term. l have to run the above query every time l move from one term to another, say first_term to second_term or from one year to the next, say from 2014 to 2015 which will then change levels say from form1 to form2. When the query is run, the updated records in Table1 have to be reflected as newly inserted records in Table2. For an instance, lets say Table1 contents have gone through the following updates:
Table1
id surname level term pyear status
a1 peterson form1 first_term 2014 active
a2 chanaka form1 first_term 2014 active
Table1
id surname level term pyear status
a1 peterson form1 second_term 2014 active
a2 chanaka form1 second_term 2014 active
Table1
id surname level term pyear status
a1 peterson form1 third_term 2014 active
a2 chanaka form1 third_term 2014 active
Table1
id surname level term pyear status
a1 peterson form2 first_term 2015 active
a2 chanaka form2 first_term 2015 active
For the above transitions in Table1, Table2 has to be appear as follows:
Table2
id surname level term pyear
a1 peterson form1 first_term 2014
a2 chanaka form1 first_term 2014
a1 peterson form1 second_term 2014
a2 chanaka form1 second_term 2014
a1 peterson form1 third_term 2014
a2 chanaka form1 third_term 2014
a1 peterson form2 first_term 2015
a2 chanaka form2 first_term 2015
My problem is, the query can only insert into Table2 as long as there is no any other record that has in Table2 with the same level, term and year. If there is at least one record that has the same level, term and year, no matter there are other records recently entered in Table1, they will not be inserted. If l try to remove the 'if not exists' statement, it will also insert the records in Table2 as long as there is no any record with the same level, term and year in Table2 otherwise it reports that it cannot insert based on primary key and then it terminates. How can l go around the problem without duplicating records in Table2.
Th query l ran is as follows:
create proc sp_extract(
#level nvarchar(50),
#term nvarchar(50),
#pyear int
)
as
if not exists(select id,
surname,
level,
term,
pyear
from Table2 where level=#level and term=#term and pyear=#pyear)
insert into Table2
(
id,
surname,
level,
term,
pyear
)
select id,
surname,
level,
term,
pyear
from Table1 where level=#level and term=#term and pyear=#pyear