Arkansas Life and Health Insurance Practice Exam

What must an insurer do when they make a change that affects the provision of an insurance contract?

1. Communicate the change to the Insurance Commissioner

2. Notify all policyholders

3. Request approval from the policyholders

4. Wait at least 60 days before implementing the change

The correct answer is: Communicate the change to the Insurance Commissioner

When an insurer makes a change that impacts the provision of an insurance contract, they are required to communicate this change to the Insurance Commissioner. This is essential to ensure transparency and regulatory compliance. By informing the Insurance Commissioner, the insurer is following proper protocol and keeping the regulatory body informed of any alterations to insurance contracts. Options B, C, and D are incorrect because while it is important for policyholders to be notified of changes to their insurance contracts, the primary responsibility lies with the insurer to inform the Insurance Commissioner. Policyholders should be updated on changes, but they do not need to approve them, and there is no specific waiting period like 60 days outlined in the regulations.