Examkin

Question

Difficulty: MediumCompleting the Application

Producer Vanya is reviewing a finalized Business Owner's Policy (BOP) application for a local retail store. She discovers that the applicant accidentally checked "Yes" for a history of commercial property foreclosures, which Vanya knows from their interview is incorrect. Furthermore, Vanya notices that a question asking about secondary warehouse locations was left completely blank. What is the proper procedure for Vanya to resolve these issues before submitting the application to the insurer?

  1. Arrange a meeting with the applicant to answer the blank question, correct the foreclosure response, and have the applicant place their initials next to the changes.Answer
  2. B
    Utilize her implied authority to cross out the incorrect foreclosure response and fill in the missing warehouse location information on the applicant's behalf.
  3. C
    Submit the application exactly as signed since the applicant's statements are considered absolute warranties, and attach a producer's report clarifying the true facts.
  4. D
    Have the applicant initial the foreclosure correction, but leave the warehouse location question blank since the underwriting department will automatically assume the answer is negative.

Answer

Arrange a meeting with the applicant to answer the blank question, correct the foreclosure response, and have the applicant place their initials next to the changes.
The correct procedure for altering an insurance application requires the applicant to make or explicitly authorize the correction and place their initials next to the change. Additionally, agents must ensure all questions are answered, requiring the applicant to fill in any blank responses before submission.

Step-by-Step Solution

1
Identify the errors in the completed application.
The application contains one incorrect response regarding foreclosures and one missing response regarding secondary locations.
Field underwriting requires the agent to ensure the application is complete and accurate before submission.
2
Determine the legal constraints on altering applications.
Agents cannot unilaterally alter an application; all changes must be explicitly authorized and marked by the applicant.
The application forms the basis of the legal contract, and the applicant must verify all representations.
3
Address the incomplete question.
The blank question must be answered by the applicant.
Insurers will return incomplete applications because unanswered questions cannot be assumed to be negative, which would delay the underwriting process.

Key Concept

Application Corrections and Completeness
Rate this question

Topics

Completing the Application

More questions from this topic