Field Underwriting (9%) Flashcards
Agent/Producer
legal representative of an insurance company. “producer” includes agents and brokers. “Agents” are agents of the insurer
Applicant or proposed insured
person applying for insurance
Consent
permission to do something
Insurable interest
the policyowner facing the possibility of losing something of value in the event of aloss
Insurance policy
contract between a policyowner and an insurance company which agress to pay the insured or the beneficiary for loss caused by specific events
Insured
Person covered by the policy. may or MAY NOT be the policyowner
Insurer (principal)
the company who issues an insurance policy
Policyowner
person entitled to exercise the rights and privileges in the policy
Premium
the money paid to the insurance company for the insurance policy.
Insurer’s consideration
promise to pay for losses
Insured’s consideration
the payment of premium and statements on the application
Elements of a contract
- Agreement - offer (by applicant) and acceptance (underwriter)
- Consideration
- Competent Parties (capable of entering)
- Legal Purpose (not against public policy)
Consideration (defined)
the binding force of any contract. Something of value that each party gives to the other
Insurable interest
proven by:
1. Love/Affection
2. Economic/Financial loss
Warranty
absolutely true statement. Breaching can be considered grounds for voiding policy or returning premium
Representations
Believed to be true to the best of one’s knowledge
Misrepresentations
untrue statements. could void a contrtact
Material misrepresentations
misrepresentations that, if discovered, would alter the underwriting decision.
Can intentional material misrepresentations be considered fraud?
Yes
Conditional contract
requires that certain conditions be met in order to execute a contract (and before each party fulfills its obligations).
Unilateral contract
only one party is bound to do anything.
Contract of Adhesion
drawn up by one party (insurer) and accepted or rejected by the other (insured). No negotiations. “take it or leave it”
Aleatory
an exchange of unequal amounts (premium is small compared to insurer payout)
Who is responsible for ensuring that an application for insurance is complete and accurate to the best of the knowledge of the applicant
the agent
Two ways to correct a mistake on an application
- start over with a fresh application
- draw a line through the incorrect answer and inster the correct one (applicant must initial the correct answer)
All changes to an application…
must be initialed by the applicant or insured
Application process
- Complete and accurate information
- Signatures
- Changes (initialed) if necessary
- Collection of initial premium (optional)
- Submit to underwriting
Statement of continued good health required if premium is collected after application
Replacing a health insurance policy with a new one requires:
- ensuring current policy is NOT cancelled before new policy is issued
- carefully comparing benefits, limitations, and exclutions found in the corrent and proposed replacement policies
Sources of insurability information
- Attending Physician Report (best for accurate information on applicant’s medical history)
- MIB report (helps companies share adverse medical information on insureds)
- Credit Reports (risk’s potential for loss)
- Medical Exam Report (conducted by physicians/paramedics)
What is required before an HIV exam?
Applicant’s written consent
Investigative consumer reports
Similar to a regular consumer report except information is obtained from associates, friends, and neighbors.
