Montana State Life Insurance Practice Exam

Within how many business days must an insurance producer provide a reason for an adverse action to an applicant?

1. 10 business days

2. 15 business days

3. 21 business days

4. 30 business days

The correct answer is: 21 business days

The correct timeframe for an insurance producer to provide a reason for an adverse action to an applicant is 21 business days. This requirement is established to ensure that applicants receive timely and clear information regarding any negative decisions made about their insurance applications. By providing this explanation within 21 business days, the producer allows the applicant to understand the basis for the decision, which is an important aspect of transparency and fairness in the insurance process. This regulation helps protect consumers by ensuring they have the opportunity to address any issues or misunderstandings that may have led to the adverse action.