State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
If an LTC applicant does not meet the insurer's financial suitability standards or declines to provide the required information, the insurer may take which action?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
CIC Section 10234.95(h) allows the issuer to reject the application if the applicant fails financial suitability standards or declines to provide information. Alternatively, the issuer sends a suitability letter similar to the NAIC model letter; if the applicant declined financial information, the issuer may verify intent by another method. Either way, the outcome is documented in the file. AH-V.2e anchors this CA suitability procedure.
Why the other options are wrong
- A) Issuing despite a suitability failure would defeat the statutory purpose of the standards.
- C) The statute directs the issuer to handle the outcome internally, not report the applicant.
- D) There is no reduced-benefit auto-approval path in the suitability statute.
Memory hook
Fails suitability? Reject, or issue a suitability letter — never just rubber-stamp the policy.