PSI Life, Accident, Health Practice Exam

When an insurer fails to comply with the change of address regulation, the consequence specifically related to their license is significant. If an insurer does not adhere to the regulations requiring them to keep address information up to date, it can lead to regulatory actions against them, such as the suspension of their license. This is a critical enforcement mechanism to ensure that insurers remain compliant with laws designed to protect consumers and maintain transparency in their operations.

Suspension of the license serves a dual purpose: it holds the insurer accountable for their actions and acts as a warning to other insurers to maintain compliance as well. Keeping accurate address records is essential not only for communication with policyholders but also for ensuring that important correspondence, such as notices of policy changes or billing information, reaches the intended recipients.

This level of accountability is necessary to maintain the integrity of the insurance industry and ensures that insurers are operating in a manner that is fair and beneficial to consumers.