UNIT 2 Flashcards
UNDERWRITING
THE PROCESS OF EVALUATING A RISK TO DETERMINE IF IT IS ACCEPTABLE BASED ON ITS ESTABLISHED INSURANCE COMPANY GUIDLINES.
IF THERE IS A MISTAKE ON AN APPLICATION, HOW MUS THIS BE ADDRESSED ?
THE APPLICANT MUST PLACE THEIR INITIALS NEXT TO THE CORRECTION
MOST STATE LAWS ALLOW LIFE INSURANCE APPLICATIOINS TO BE BACK DATED UP TO HOW MANY MONTHS?
6 MONTHS
WHO IS REQUIRED TO SIGN THE APPLICATION?
INSURED, PRODUCER’/ AGENT AND THE APPLICANT/ OWNER (IF NOT THE INSURED)
WHAT IS ON THE PRODUCERS REPORT?
THE INSUREDS FINANCIAL STATUS, HABITS AND CHARACTER, ANYTHING TO DO WITH THE PRODUCERS RELATIONSHIP TO THE PROPOSED INSURED.
THE INSURED DOES NOT SEE THIS REPORT, IT IS NOT ATTACHED TO THE POLICY.
CONDITIONAL RECEIPT
AS LONG AS THE APPLICANT IS FOUND TO BE INSURABLE UNDER THE COMPANYS STANDARD UNDERWRITING RULES, THE DATE THE APPLICATION IS SIGNED AND COMPLETED IS THE EFFECTIVE DATE OR THE EFFECTIVE DATE OF THE MEDICAL EXAMINATION, WHICHEVER IS LATER OF THESE 2 EVENTS.
BINDING RECEIPTS
EFFECTIVE 30-60 DAYS FROM THE DATE OF THE APPLICATION EVEN IF THE APPLICANT IS FOUND TO BE UNINSURABLE. MOST OFTEN USED WITH AUTO OR HOMEOWNERS AND RARELY WITH LIFE INSURANCE.
GENERAL INFORMATION (PART 1) OF THE APPLICATION INCLUDES WHAT PERSONAL DATA REGARDING THE INSURED
NAME, ADDRESS, DOB, GENDER,SSN,DRIVERS LICENSE #, MARITAL STATUS, INCOME, OCCUPATION AND BUSINESS ADDRESS, TYPE OF POLICY AND FACE AMOUNT, BENEFICIARY, OTHER INSURANCE OWNED.
HEALTH INFORMATION (PART 2) OF THE APPLICATION CONTAINS WHAT INFORMATION?
HEIGHT AND WEIGHT, TOBACCO USAGE, DRUG USAGE, INTERNATIONAL TRAVEL, CURRENT MEDICAL TREATMENTS, MEDICATIONS BEING TAKEN,CONDITIONS THE INSURED HAS SOUGHT TREATMENT FOR OR BEEN DIAGNOSED WITH IN THE PAST, HISTORY OF DISABILITY CLAIMS, HEALTH CONDITIONS PREVALENT IN THE INSUREDS FAMILY, HIGH RISK HOBBIES, NAME AND ADDRESS OF PHYSICIAN
ATTENDING PHYSICIANS STATEMENT
A STATEMENT TO FIND OUT ABOUT THE APPLICANTS CURRENT CONDITION AND MEDICAL HISTORY WITH THE PHYSICIAN.
WHO PAYS FOR MEDICAL EXAMS AND TESTING DURING UNDERWRITING PROCESS?
THE INSURER
MEDICAL INFORMATION BUREAU (MIB)
A NON PROFIT INSURANCE TRADE ASSOCIATION THAT MAINTAINS UNDERWRITING INFORMATION ON APPLICANTS.
- insurers may not make adverse underwriting decision based solely on the basis of information from the MIB
- Insurers do NOT report underwriting decisions to the MIB.
- An applicant must be given written notice that information may be reported to and obtained from the MIB and insurers must get applicants written authorization to do so
- Applicants must also be notified that applying for insurance or filing a claim with another company may trigger the release of MIB information.
CONSUMER REPORTS
USED TO DETERMINE CONSUMERS ELIGIBILITY FOR PERSONAL CREDIT OR INSURANCE OR FOR EMPLOYMENT. THEY MAY BE ISSUED ONLY TO PERSONS WHO HAVE A LEGITIMATE BUSINESS NEED FOR THE INFORMATION.
INVESTIGATIVE CONSUMER REPORTS
ARE REPORTS CONTAINING INFORMATION OBTAINED BY INTERVIEWING INDIVIDUALS WHO KNOW SOMETHING ABOUT THE CONSUMER SUCH AS ASSOCIATES, FRIENDS, AND NEIGHBORS. CONSUMERS MUST BE NOTIFIED AND GIVE THEIR CONSENT TO HAVING SUCH REPORTS DONE.
STANDARD RISK
AVERAGE HEALTH AND NORMAL LIFE EXPECTANCY AND FALL INTO THE NORMAL RANGE ANTICIPATED BY THE COMPANY WHEN IT ESTABLISHED ITS PREMIUMS.
