What is the practice of "fronting" in insurance?

Fronting in insurance refers to the practice of using a license that does not correspond to the individual selling the insurance policy. This practice typically involves an agent or broker who may not hold the appropriate licenses to sell certain types of insurance products or in specific jurisdictions. In such cases, one might use a licensed individual’s credentials to issue policies, effectively bypassing the regulatory framework that governs the sale of insurance. This can pose significant ethical and legal issues, as it undermines the licensing system designed to protect consumers and ensure that insurance products are sold by qualified professionals.

The other options, while related to insurance practices, do not accurately define fronting. Providing accurate birth dates for underwriting is a routine part of the insurance application process used for risk assessment. Submitting claims for verification is standard industry procedure to ensure that claims are legitimate and not fraudulent. Communicating with clients about policy changes is also a fundamental responsibility of insurance professionals, focusing on transparency and client service. However, none of these involve the unethical practice of misrepresenting licensing status that characterizes fronting.