LLQP Accident & Sickness · Component 3.1 · 25% of the exam
For a small group applying for its first disability plan, the insurer's main underwriting concern is:
- AThat small groups are prohibited from purchasing long-term disability coverage in Canada
- BThat each member's personal medical history must be individually assessed by the underwriter before issue
- CThat the employer will be unable to remit premiums through a payroll system
- That the group's small size gives little credible claims experience and invites anti-selection
Correct answer: D) That the group's small size gives little credible claims experience and invites anti-selection
A handful of lives produces no reliable experience, so the insurer relies on pooled rates, participation requirements and design restrictions to control the risk.
Why the other options are wrong
- ASmall groups buy disability coverage routinely.
- BSmall groups are still underwritten as a group within the non-evidence maximum.
- CPayroll administration is not an underwriting concern.
Exam tip
Small group means pooled rates and tighter design rules.
Common mistake
Promising a small employer a custom-designed, experience-rated plan.
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.