An agent changes the wording of a written answer on a signed disability insurance application without the applicant's knowledge. Under CIC §10382, this alteration is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC §10382 provides that no alteration of a written disability policy application may be made by anyone other than the applicant without the applicant's written consent. The sole exception is insertions made by the insurer for administrative purposes only, in a manner that clearly indicates the insertions are not to be ascribed to the applicant. Any other alteration without consent is a misdemeanor, and if an insurer officer or employee makes it with the insurer's knowledge or consent, the alteration is deemed to be the insurer's own act. The rule protects the integrity of the application record and the accuracy of the insurer's underwriting decision.
Why the other options are wrong
- B) Good intentions do not legalize the change. CIC §10382 requires the applicant's written consent for any alteration other than an insurer's clearly marked administrative insertion, regardless of whether the agent believes the change helps the applicant.
- C) The signature obtained on the original application does not authorize later changes. The statute requires the applicant's written consent to any alteration, and a change made after signing without that consent is a misdemeanor.
- D) This is not a harmless paperwork error. CIC §10382 expressly makes any unauthorized alteration of a disability application a misdemeanor, so the action carries criminal legal consequences and can expose the insurer to liability.
Memory hook
Altering an application without written consent is a misdemeanor; only insurer's marked admin insertions escape.