LLQP Accident & Sickness · Component 3.1 · 25% of the exam
A group client asks why the insurer wants two years of claims experience before quoting. The reason is that:
- Past claims help predict future claims, which is how the insurer prices a group of that size
- BMembers cannot be enrolled in a new plan until their prior claims have been fully settled
- CThe previous insurer remains liable for two years and must be identified in the new contract
- DProvincial regulators require two years of claims data before a group plan may be registered
Correct answer: A) Past claims help predict future claims, which is how the insurer prices a group of that size
Experience rating is only meaningful where there is enough history to be credible, and the prior record is the best available guide to what the group will cost.
Why the other options are wrong
- BEnrolment does not wait for old claims to be settled.
- CClaims incurred under the previous contract remain that insurer's responsibility, which is a separate point.
- DNo regulator requires claims history as a condition of registration.
Exam tip
Claims history is a pricing input, not a compliance filing.
Common mistake
Quoting a group before its claims history has been reviewed.
What this tests
CISRO competency component 3.1 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Accident & Sickness module. Written against the published curriculum.
More from component 3
- An underwriter assigns a disability applicant to occupational class 2 rather than class 4. The practical effect is that:
- A disability applicant discloses a back condition that resolved four years ago with no recurrence. The likely underwriting outcome is:
- Financial underwriting for an individual disability application exists to:
- A critical illness applicant's mother and sister both had breast cancer before fifty. The underwriter is likely to:
- An applicant for long-term care coverage is seventy-two. The insurer is most likely to require:
- Group long-term disability coverage within the non-evidence maximum is issued without individual medical questions because:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.