5. Field Underwriting Procedures
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? AApplication BPolicy Request CInsurance Request Form DRequest for Insurance
AApplication An individual can submit an application to an insurer, which requests that the insurer review the information and issue an insurance contract.
Which of the following entities can legally bind coverage? AInsurer BThe insured CFederal Insurance Board DAgent
AInsurer Only insurers, not agents, can bind coverage
An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation? AThe applicant BThe Commissioner of Insurance CThe medical examiner DThe State Department of Insurance
AThe applicant It is required by law that an insurer inform the applicant of all sources that will be contacted in determining the applicant's insurability, in addition to how the information will be gathered
When delivering a policy, which of the following is an agent's responsibility? AApprove or decline the risk BCollect medical statement from physician CCollect payment at time of delivery DIssue the policy if the applicant is present
CCollect payment at time of delivery The agent has the responsibility to deliver the policy to the insured and to collect any premium that may be due at the time of delivery. Question 2 of 15
Which of the following entities can legally bind coverage? AFederal Insurance Board BAgent CInsurer DThe insured
CInsurer Only insurers, not agents, can bind coverage
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? APolicies must overlap to cover pre-existing conditions. BThe old policy must be cancelled before the new one can be issued. CThe old policy should stay in force until the new policy is issued. DThere should be at least a 10-day gap between the policies.
CThe old policy should stay in force until the new policy is issued The agent must make sure that the current policy is not cancelled before the new policy is issued
In a replacement situation, all of the following must be considered EXCEPT AAssets. BBenefits. CLimitations. DExclusions.
AAssets. In a replacement situation the agent must be careful to compare the benefits, limitations and exclusions found in the current and the proposed replacement policy
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? AAt the time of application BWhen the applicant's credit is checked CWhen the policy is delivered DAt the initial interview
AAt the time of application A notice to the applicant must be issued to all applicants for health insurance coverage.
What document describes an insured's medical history, including diagnoses and treatments? AAttending Physician's Statement BPhysician's Review CIndividual Medical Summary DComprehensive Medical History
AAttending Physician's Statement An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses.
The insurance policy, together with the policy application and any added riders form what is known as AEntire contract. BCertificate of coverage. CContract of adhesion. DWhole life policy.
AEntire contract. When a policy is issued, a copy of the application, any riders and amendments are attached to the back of the policy and become part of the entire contract.
Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information AHeld or transmitted in any form. BTransmitted electronically only. CHeld in a computer format. DHeld or transmitted in paper form.
AHeld or transmitted in any form. Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information held or transmitted by a covered entity or its business associate in any form or media, whether electronic, paper or oral. This is called protected health information (PHI).
Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now? AThe agent should ask the customer to sign a statement acknowledging that he is aware of the change. BNothing. After the explanation, the agent is not legally bound to do anything else. CThe agent must notify the beneficiary of the change in policy. DIf the change would affect the premium, the agent must have the customer sign a statement acknowledging the change.
AThe agent should ask the customer to sign a statement acknowledging that he is aware of the change If the insurer makes a change to the policy, the changes must be explained to the insured, and the insured must sign a statement acknowledging that the changes were explained.
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? AThe old policy should stay in force until the new policy is issued. BThere should be at least a 10-day gap between the policies. CPolicies must overlap to cover pre-existing conditions. DThe old policy must be cancelled before the new one can be issued.
AThe old policy should stay in force until the new policy is issued. The agent must make sure that the current policy is not cancelled before the new policy is issued
Which is true regarding obtaining underwriting sources? AIt is illegal to obtain information from outside sources in order to determine an applicant's insurability. BThe applicant must be informed of the sources contacted and how the information is being gathered. CThe insurer does not need to inform the applicant of how the information is gathered; informing only of the source is sufficient. DThe insurer only needs to inform the applicant of how the information is being gathered; it is not necessary to disclose the sources.
BThe applicant must be informed of the sources contacted and how the information is being gathered. It is required by law that an insurer informs the applicant of all sources that will be contacted in determining the applicant's insurability, in addition to how the information will be gathered.
Which of the following is true about the requirements regarding HIV exams? AHIV exams may not be used as a basis for underwriting. BThe applicant must give prior informed written consent. CResults may be disclosed to the agent and the underwriter. DPrior informed oral consent is required from the applicant
BThe applicant must give prior informed written consent. A separate written consent form must be obtained prior to an HIV exam. HIV exam results may be disclosed to underwriters, but not agents.
Which of the following is true regarding health insurance underwriting for a person with HIV? AThe person may only be declined if he/she has symptoms. BThe person may not be declined for medical coverage solely based on HIV status. CA person may be declined for HIV but not AIDS. DThe person may be declined.
BThe person may not be declined for medical coverage solely based on HIV status. The HIV consent form provides the insurance company with authorization to test for the presence of the HIV virus and applies to all life and health policies. Underwriting for HIV or AIDS is permitted as long as it is not unfairly discriminatory. Medical coverage, however, cannot be denied per recent health care reform (no exclusions for pre-existing conditions).
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point? AApproved the application BIssued the policy CNeither approved the application nor issued the policy DBoth approved the application and issued the policy
CNeither approved the application nor issued the policy When the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy
On a health insurance application, a signature is required from all of the following individuals EXCEPT AThe policyowner. BThe agent. CThe spouse of the policyowner. DThe proposed insured
CThe spouse of the policyowner. Every health insurance application requires the signature of the proposed insured, the policyowner (if different than the insured), and the agent who solicits the insurance.
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? AOffer her a secondary policy BAsk the applicant to sign a statement that acknowledges that the policy had been delivered CCollect a late payment fee DAsk her to sign a statement of good health
DAsk her to sign a statement of good health If the premium is not collected until the policy is delivered, the agent must receive a statement of good health, which acknowledges that the insured's health status has not changed since the policy was approved.
Whose responsibility is it to determine if all of the questions on an application have been answered? AThe insurer BThe applicant CThe beneficiary DThe agent
DThe agent It is the responsibility of the agent to make sure that the application has been properly signed and that all questions have been answered correctly
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? ACollect a late payment fee BAsk her to sign a statement of good health COffer her a secondary policy DAsk the applicant to sign a statement that acknowledges that the policy had been delivered
BAsk her to sign a statement of good health If the premium is not collected until the policy is delivered, the agent must receive a statement of good health, which acknowledges that the insured's health status has not changed since the policy was approved
Who must pay for the cost of a medical examination required in the process of underwriting? ADepartment of Insurance BInsurer CApplicant DUnderwriters
BInsurer If an insurer requests a medical examination, the insurer is responsible for the costs of the exam.
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT ABenefits may change. BPremiums always stay the same. CDue to age or health, the policy may change dramatically. DPre-existing conditions that were previously covered may not be covered under the replacing policy.
BPremiums always stay the same. Underwriting is important when replacement is involved. It is an underwriter's duty to evaluate risk and decide whether or not a person is eligible for coverage. When replacement is involved, the insured may be under the assumption that a replacing policy is in his/her best interests, but after being evaluated by an underwriter, where premium and risk are exchanged, an insured may not be paying the same premium or receiving the same benefits.
Which is true regarding obtaining underwriting sources? AThe insurer does not need to inform the applicant of how the information is gathered; informing only of the source is sufficient. BThe insurer only needs to inform the applicant of how the information is being gathered; it is not necessary to disclose the sources. CIt is illegal to obtain information from outside sources in order to determine an applicant's insurability. DThe applicant must be informed of the sources contacted and how the information is being gathered.
DThe applicant must be informed of the sources contacted and how the information is being gathered It is required by law that an insurer informs the applicant of all sources that will be contacted in determining the applicant's insurability, in addition to how the information will be gathered.
If an applicant does not receive a new insurance policy, who would be held responsible? AThe state BThe insurer CThe applicant DThe agent
DThe agent It is the responsibility of the agent to deliver the policy
What is the best way to change an application? ADraw a line through the incorrect answer and insert the correct one. BStart over with a fresh application CErase the previous answer and replace it with the new answer DWhite-out the previous answer
BStart over with a fresh application Most companies require that the app be filled out in ink. The agent might make a mistake when filling out the app or the applicant might answer a question incorrectly and want to change it. There are two ways to correct an application. The first and best is to simply start over with a fresh application. If that is not practical, draw a line through the incorrect answer and insert the correct one. The applicant must initial the correct answer.
If an applicant does not receive a new insurance policy, who would be held responsible? AThe applicant BThe agent CThe state DThe insurer
BThe agent It is the responsibility of the agent to deliver the policy.
What document describes an insured's medical history, including diagnoses and treatments? AIndividual Medical Summary BComprehensive Medical History CAttending Physician's Statement DPhysician's Review
CAttending Physician's Statement An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses
Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information AHeld in a computer format. BHeld or transmitted in paper form. CHeld or transmitted in any form. DTransmitted electronically only.
CHeld or transmitted in any form. Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information held or transmitted by a covered entity or its business associate in any form or media, whether electronic, paper or oral. This is called protected health information (PHI).
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change? AExecutive officer of the company BInsured CAgent DApplicant
DApplicant Any changes made to the application must be initialed by the applicant