LLQP Accident & Sickness · Component 3.1 · 25% of the exam
A group's 'prior claims experience' is used to:
- Price the plan through experience rating for larger groups and identify problem areas in design
- BDeny coverage to the individual employees who made claims under the previous insurer's plan
- CSet a separate premium for each employee according to the claims that employee has made
- DDetermine which employees are entitled to name beneficiaries under the new plan
Correct answer: A) Price the plan through experience rating for larger groups and identify problem areas in design
Experience rating uses past claims as the predictor of future claims. Small groups are pooled instead; large groups are fully experience-rated.
Why the other options are wrong
- BGroup coverage does not single out claimants.
- CGroup premiums are per plan, not per person.
- DBeneficiaries are unrelated to claims history.
Exam tip
Claims experience → group pricing (larger groups) and design review.
Common mistake
Ignoring claims history when marketing a large group.
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.