underwriting

credit reports

Africans were questionable credit ratings can cause an insurance company to lose money. Applicants with poor credit standings are likely to allow and policies to lapse within a short time, perhaps even before if II premium is paid. Insurance company can lose money on a policy that is quickly lapsed, because the insurer's expenses to acquire the policy cannot be recovered in a short period of time. It's possible that home office Underwriters will refuse to insure persons who have failed to pay the bills or who appear to be applying for more Life Health and health insurance then they reasonably can afford

the Fair Credit Reporting Act of 1970

Congress in 1970 and acted the Fair Credit Reporting Act, this federal law applies to financial institutions that request these types of consumer reports insurance companies fall under this category. the Fair Credit Reporting Act of 1970, or fcra, established procedures for the collection and disclosure of information obtained on consumers through investigation and credit reports. The law is intended to ensure fairness with regard to confidentiality accuracy and disclosure. the fcra is quite extensive

the medical report

a policy is often issued on the basis of the information provided in application alone. If applicants medical section raises questions specific to a particular medical condition, the underwriter may also request an attending physician statement from The Physician who has treated that against. And insurance request for and attending physicians report must be accompanied by a copy of the signed authorization. The statement will provide details about the medical condition in question. Medical reports must be completed by a qualified person, but that person does not necessarily have to be a physician. Many companies accept reports that are completed by a paramedic or a registered nurse. When completed, the medical report is forwarded to the insurance company where it is reviewed by the company's medical director or it does ignited Associates

applicant ratings

after everything is turned in the underwriter seeks to classify the risk that the applicant poses to the insurer. This evaluation is known as risk classification.

substandard risk

and substandard risk is one below the insurer's standard or address guidelines and individual can be rated as a substandard for any number of reasons, poor health, dangerous occupation, or attributes and habits that could be hazardous. some substandard applicants are rejected outright. Others will be accepted for coverage but within an increase in their policy premium

the medical information Bureau

another source of underwriting information that specifically focuses on an applicant's medical history. it will also identify life insurance in force with other carriers as well as lifestyle habits such as drug use. The bureau is formed by more than 700 member insurance companies. Its purpose is to serve as a reliable source of medical information concerning applicants and to help disclose cases for an applicant either forget or conceals pertinent underwriting information, or submits erroneous or misleading medical information with fraudulent intent. It may also disclose lifestyle habits such as drugs drinking overeating and smoking. It helps to hold down the cost of life and health insurance for all policy owners through the prevention of misrepresentation and fraud. The information received by the MIB may be released to the proposed insureds physician

USA Patriot Act

enacted in 2001 requires entrance companies to establish formal anti-money laundering programs the purpose of the USA Patriot Act is to detect and deter terrorism. 11 trance policy that can be cash surrendered is an attractive money laundering vehicle because it allows criminals or terrorists to put dirty money in and take clean money out of in the form of an insurance company check.

Preferred Risk

men Insurance reward good risks by assigning them to Preferred Risk classification. Companies issue Preferred Risk policies with reduced premiums with expectation of better than normal mortality and morbidity experience. Characteristics that contribute to a Preferred Risk rating include not smoking, wait within an ideal range, and not drinking

part 1 General

part 1 of the application asks general questions about the post insured including name, age, address, date of birth, sex, income, marital status, and occupation. Details also included in part one are type of policy. Amount of insurance. Name and relationship and beneficiary. Other insurance proposed insured owns additional insurance applications the insured has pending. Other information slot May indicate possible exposure to a hazardous, foreign travel connectivity, or military service whether the proposed insured smokes is also indicated in part one

part three agents reports

part 3 of the application is often called the agent's report. This is where the agent reports personal observations about the proposed insured. Because the agent represents the interests of the insurance company the agent is expected to complete this part of the application fully and truthfully. Part 3, the agent provides additional information about the applicants Financial condition and character, the background and purpose of the scale and how long the agent has known the applicants. The agent's report also usually asks if the proposed insurance will replace an existing policy if the answer is yes, most States demand that certain procedures be followed to protect the rights of consumers when policy replacement is involved

part 2 Medical

part two focuses on the proposed Insurance Health & S A number of questions about the health history. This medical section must be completed and its entirety for every application. Depending on the proposed policy face amount, this section may or may not be all that is required in the way of medical information. The individual should be insured may be required to take a medical exam and or provide a blood test or urine specimen

special questioners

special questionnaires may be required for underwriting purposes to provide more detailed information related to Aviation or application, foreign residents, finances, military service, or occupation.

standard risk

standard risk is the term used for individuals who fit the insurance guidelines for policy issue without special restrictions or additional rating. These individuals meet the same conditions as the tabular risks on which the insurance premium rates are based

the application

the application for insurance is a basic source of insurability information. Regardless of what other sources of information underwriter May draw from, the application is the first source of information to be reviewed and will be evaluated thoroughly. Thus it is the agents responsibility to see the applicants answer two questions on the application or fully and accurately recorded. There are three basic parts to a typical life insurance application part 1 general, part 2 medical, and part three agents report.

inspection reports

usually obtained by insurance companies on applicants who apply for large amounts of life and health insurance. These reports contain information about the perspective insurance, which is reviewed to determine their insurability. The purpose of the port's is to provide a picture of an applicant's General character and reputation common mode of living, finances, and any exposure to abnormal hazards. When an investigative Consumer Report is used in connection with an insurance application the applicant has the right to receive a copy of the report. an insurer's obligation involving the disclosure of an insurance non-public information is to give notice, explained, and allow opting out. if an insurance company obtains an inspection report on a prospective insured, it must inform the prospect that it is permitted to do so under the Fair Credit Reporting Act.