After a client leaves the agent's office, the agent corrects the client's application but fails to inform the client. The client is involved in an accident two weeks later and the insurer uses the corrected form. This is

• A. A violation of the Insurance Code
• B. Standard underwriting practice
• C. Fair handling of the claim
• D. No fault in the process

Answer: (A)

The issue tested here is that altering an applicant’s form after the client has left and then using that corrected version without informing the client is misrepresentation and a violation of the Insurance Code. When underwriting, every material change to information on an application should be disclosed to the applicant and ideally approved by them; doing so surreptitiously defeats the applicant’s ability to consent to how their risk is assessed and how coverage is offered. The agent’s action hides important facts and can mislead both the insurer and the insured about the true information on which the policy would be based. Because the insurer trusted information that the client didn’t authorize or acknowledge, this use of the corrected form is improper. It isn’t standard underwriting practice, it isn’t fair handling of a claim, and it isn’t any fault in the process—it’s a violation of the rules governing honesty and disclosure in underwriting.