Ch. 13 - International Risk Flashcards
What does “international risk” refer to in life underwriting?
Risks related to foreign travel, foreign residence, or applicants living outside the insurer’s home country.
Why is international risk an underwriting concern?
Because travel or residence in certain regions may involve elevated mortality risk due to health, safety, political, or environmental factors.
What are common sources of international risk?
Travel to or residence in countries with high crime, poor healthcare, political instability, war, or endemic diseases.
What is the difference between foreign travel and foreign residence in underwriting?
Travel is temporary (e.g., vacation or short-term business), while residence is long-term or permanent living abroad.
What tool do insurers use to assess international risk levels by country?
Country classification systems—often based on government travel advisories (e.g., U.S. State Department, Canadian Global Affairs).
What factors are considered when underwriting foreign travel?
Destination, length of stay, frequency, purpose of travel, and applicant’s ties to their home country.
What are examples of higher-risk travel purposes?
Humanitarian aid in conflict zones, journalism in unstable regions, or travel to areas with endemic disease outbreaks.
How might life insurers classify countries for underwriting purposes?
As acceptable, moderate risk, or uninsurable—based on stability, crime, healthcare, and political factors.
What documentation is often requested for international risk underwriting?
Travel questionnaire or foreign residence questionnaire detailing location, purpose, frequency, and safety precautions.
What underwriting actions may apply to foreign travel or residence?
Flat extras, postponement, rating, or policy exclusions; in some cases, a decline.
What is the typical response to temporary travel to low-risk countries?
Often acceptable at standard rates if the country is classified as safe.
What is a potential issue with insuring foreign nationals?
Difficulties with jurisdiction, premium collection, claims processing, and verification of death.
What is “anti-selection” in the context of international underwriting?
When applicants from high-risk regions seek coverage from foreign insurers due to more favorable terms.
What is a common requirement for issuing coverage to someone living abroad?
A strong connection to the insurer’s country (e.g., citizenship, bank account, business interests, or family ties).
Why might a policy be declined for a foreign applicant?
If the applicant lacks ties to the insurer’s country or resides in a high-risk area.
What are the implications of issuing a policy outside the insurer’s jurisdiction?
Legal, regulatory, and enforceability issues, especially regarding contract law and claims payment.
What does “country of solicitation” mean in international underwriting?
The location where the application was signed and submitted—must comply with local laws and insurer guidelines.
How do insurers mitigate international underwriting risk?
By using internal country risk lists, adhering to compliance guidelines, and possibly requiring in-person applications within jurisdiction.
What is the role of reinsurers in international risk?
They often provide guidance on acceptable countries and may participate in decisions involving complex international cases.
In Canada, an immigrant who qualifies for legal permanent residence is a:
1. convention refugee
2. C1 visa holder
3. landed immigrant
4. foreign nation
- landed immigrant
Preference for a U.S. immigrant visa is given to which of the following?
A. individuals engaged to U.S. citizens
B. workers with special occupations that are needed in the U.S.
C. parents of U.S. citizens
A, B, & C are correct
All the following are factors to consider when underwriting foreign risk EXCEPT:
1. visa type
2. driving record
3. citizenship
4. anticipated travel
- driving record
Prolonged airplane travel increases the risk of:
1. asthma
2. pulmonary embolism
3. dementia
4. food poisoning
- pulmonary embolism
Favorable factors in underwriting applications involving foreign travel include all the following EXCEPT:
1. only major urban areas are visited during travel
2. travel is not immediate
3. the purpose of the travel is for vacation
4. trips are of a long duration
- trips are of a long duration
