2.6 Policy Delivery

When an insurer determines that an applicant qualifies as an acceptable risk, the issued policy is forwarded to the producer for delivery to the policyowner. The producer is responsible for delivering the policy, collecting any outstanding premium (if not paid with the application), and reviewing the contract with the policyowner or insured. This review should include an explanation of policy benefits, ratings, endorsements, exclusions, and riders to ensure full understanding.

Constructive (Legal) Delivery occurs when the initial premium was paid at the time of application. In this situation, once the insurer issues and mails the policy to the producer, the contract is considered legally delivered because acceptance has occurred. Even so, the producer must still obtain delivery signatures and review the policy provisions with the policyowner.

If the insurer does not approve the application as originally submitted, it may issue a counteroffer. This may include a higher premium (rating surcharge), exclusions, or modified benefits. In such cases, the producer must personally deliver the policy, explain the revised terms, collect any additional premium required, and obtain the applicant's acceptance before coverage becomes effective.

When the initial premium is not submitted with the application, coverage does not begin until the premium is collected. At delivery, the producer must also obtain a signed Statement of Good Health, confirming that the insured has not experienced illness, injury, surgery, or hospitalization since the application date. If the insured's health has changed, the policy must be returned to the insurer for further underwriting review.

Policy delivery may be completed through:

• Personal delivery with a signed receipt
• Registered or certified mail with a signed receipt of delivery

These procedures help ensure proper contract formation and compliance with underwriting requirements.