South Dakota Life and Health Practice Exam

When an insurer receives an MIB (Medical Information Bureau) report indicating a previously undisclosed health condition, the company typically takes several actions to assess risk and determine the applicant's insurability accurately.

While sending a notice to the MIB about the applicant's declined status may be a standard procedure for the insurer when a health condition impacts underwriting decisions, it is not an immediate action taken upon receipt of the report. Instead, the insurer usually focuses on more pressing actions to ensure due diligence in underwriting.

Upon receiving new health information, insurers generally need to gather a complete understanding of the applicant's health profile. This might involve requesting further medical information from the applicant to clarify any discrepancies or obtain additional details regarding the reported condition. Adjusting the premium based on the new risk factors is also a common response, as the insurer must reflect the applicant's updated health status in the policy terms.

Revoking the policy automatically is not a typical action, as policies usually imply a legal process and may require a thorough investigation before termination. Insurers aim to comply with regulations and offer applicants the opportunity to explain any new health findings rather than immediately revoking coverage.

Thus, opting not to send a notice to the MIB immediately aligns with standard practices in response to MIB