Tennessee Insurance Practice Exam

What action should a producer take when submitting an insurance application to an insurer?

1. Verify the applicant's income

2. Inform insurer of relevant information not included on the application

3. Obtain the applicant's medical history

4. Submit additional identification documents

The correct answer is: Inform insurer of relevant information not included on the application

When a producer submits an insurance application to an insurer, one crucial action is to inform the insurer of relevant information that is not included on the application. This supports the insurer's underwriting process by providing a complete and accurate picture of the applicant's situation. Transparency is key in insurance, as it helps ensure that all factors affecting the risk assessment and subsequent policy decision are disclosed. Informing the insurer of any pertinent information, even if it's not explicitly requested in the application, can prevent future issues related to claims or policy issuance. This practice also promotes ethical standards in the insurance industry, ensuring that producers are acting in the best interests of both the insurer and the applicant. In contrast, actions such as verifying the applicant's income, obtaining the applicant's medical history, or submitting additional identification documents may be relevant but are not the primary focus when it comes to submitting the application itself. Each of these actions serves a purpose, but they do not directly relate to the obligation of conveying relevant, missing information to ensure the application is comprehensive and accurate.