Florida Life and Health Insurance License Practice Test

What must an insurer do if a Group Life policy is being canceled?

1. Notify the state insurance department

2. Notify each certificate holder

3. Transfer the policy to another insurer

4. Offer a refund to the policyholder

The correct answer is: Notify each certificate holder

When a Group Life policy is being canceled, the insurer is required to notify each certificate holder. This is because the certificate holders are the individuals covered by the policy and they need to be informed of the cancellation. Option A is incorrect because while it is important for the insurer to also inform the state insurance department, this is not the main requirement when canceling a Group Life policy. Option C is incorrect because transferring the policy to another insurer would not necessarily cancel it and the insurer would still need to notify the certificate holders. Option D is incorrect because offering a refund is not necessary when canceling a Group Life policy, the important step is providing notice to the certificate holders.