How can a client be declined for insurance coverage by one company and yet acquire standard coverage at another company?

The answer lies in the completeness and quality of information submitted by insurance advisors during the application process. Industry experts say that many insurance advisors have an inadequate understanding of the requirements of underwriters, resulting in high rates of declined and “rated” policies. (A rated policy carries higher than usual premiums because of a unique impairment, occupation or hobby of the policyholder.)

That’s why a new Calgary-based company, Advanced Underwriting, in collaboration with Toronto-based LOGiQ3 Inc. (www. LOGiQ3.com) is offering a training course, entitled Advanced Underwriting, for insurance brokers, managing general agents and individual advisors to help them better understand what underwriters look for when assessing an insurance application.

LOGiQ3 provides the educational materials and staff for the training program, while Advanced Underwriting focuses on marketing initiatives. The creator of the program is 39-year industry veteran Ross Morton (www.rossmorton.com) who sits on the advisory board of LOGiQ3. Sean Long, another industry expert, heads up Advanced Underwriting, which aims to educate advisors.

Insurance advisors do not do a “good enough job,” says Long, because they are not properly trained. He attributes this weakness to limited training capabilities of insurance companies and restricted budgets at MGAs.

The new one- or two-day course covers a broad range of underwriting risks, which, if not dealt with during the application process, can lead to a declined or rated policy. “We start with life insurance, followed by critical illness, disability and long-term care insurance,” says Morton.

Certain areas — diabetes, coronary artery disease and hypertension — that could raise red flags for underwriters are discussed.

The focus is on underwriting requirements and the information and documentation that should be submitted with an application to increase its chances of success.

The goal, says Morton, is to teach participants how to make the application “go through smoother, faster and with less frustration.” He says that decline rates have more than doubled over the past 10 years, which essentially results in substantial loss of potential revenue and time by insurance advisors, and frustration among clients.

The increase in declined and rated policies is directly related to more diligent underwriting of risks and/or changes in risk pa-rameters. Preparing a proper application, says Long, is key to making it through underwriting.

It’s essential to have a full understanding of your client’s personal circumstances, including family history, medical history and lifestyle, when preparing an insurance application, says Susan St. Amand, president of Ottawa-based Sirius Financial Services.

The information provided must be comprehensive, explaining why your client’s circumstances might be different from those of, say, a family member who has risks, as hereditary connections could make your client uninsurable. “You must be able to explain,” St. Amand adds, “why your client’s risks are different.

“Any additional information is always welcome by underwriters,” she adds, “and could be the difference between getting a decline, a rated or a standard policy, or one with exclusions.”

St. Amand also suggests that a cover letter accompany your application: “From my experience, there is no cover letter or explanations of illnesses.”

Lawrence Geller, president of L.I. Geller Insurance Agencies Ltd. of Campbellville, Ont., says that a well-completed application goes beyond the intent of the questions in the standard health questionnaire. He concurs with St. Amand that typically some agents do not provide as comprehensive information as may be required when submitting their clients’ applications.

The Advanced Underwriting training course has been launched in Western Canada and is being rolled out across the country. IE