Texas Life Agent Practice Exam

After a producer submits a completed application and the first premium check, what is NOT required when the underwriter issues a 'rated policy'?

1. A new completed and signed application

2. Payment of an additional premium

3. New medical examination results

4. Reassessment of the risk

The correct answer is: A new completed and signed application

When a producer submits a completed application and the first premium check, and the underwriter subsequently issues a 'rated policy', it is not necessary to obtain a new completed and signed application from the applicant. A rated policy typically indicates that the insurer has classified the applicant as a higher risk compared to standard underwriting guidelines, which may involve charging an additional premium or changing the policy terms. The process of issuing a rated policy builds upon the information already provided in the original application. Therefore, requiring a new application would unnecessarily duplicate the data collection effort, as the underwriter is already working from the initial information submitted. The focus for the underwriter shifts to determining the appropriate level of risk and pricing, rather than collecting new data from the applicant. This allows for a more efficient underwriting process while still ensuring that the company accurately assesses the risk involved in providing coverage.