How should misstatement of age or smoking status be evaluated?

• A. By comparing information from the application, medical exams, lab results, and external data (MIB/MVR/credit) and seeking clarification or re-rating if inconsistent.
• B. By comparing information from the application with no external data and guessing misstatements.
• C. By relying on interview impressions only.
• D. By waiting until policy renewal to reassess.

Answer: (A)

When a misstatement about age or smoking status occurs, the goal is to verify accuracy by checking multiple reliable sources. Underwriters compare what’s on the application with results from medical exams and lab tests, and with external data such as MIB reports, motor vehicle records, and credit information. If these sources don’t align with what was stated, the appropriate step is to seek clarification from the applicant or obtain additional information, and then adjust the underwriting decision or rate if needed (a re-rating) to reflect the true risk. This approach prevents misstatements from skewing pricing and ensures the policy terms match the actual risk.

Relying on impressions from an interview, guessing misstatements, or waiting to reassess at policy renewal wouldn’t adequately protect the insurer or ensure fair pricing, since discrepancies can significantly influence risk and premium.