What should a broker do if a proposed policy does not meet the financial stability requirements?

When a proposed policy does not meet financial stability requirements, the most responsible action for a broker is to suggest alternative options to the policyholder. This choice ensures that the broker is prioritizing the client's best interests and safety by providing them with alternative products that may offer better financial security and protection against potential claims.

By suggesting alternatives, the broker demonstrates due diligence and professionalism, ensuring that the policyholder is aware of their options. This approach not only helps the client make informed decisions but also enhances the broker’s role as a trusted advisor. Informing the policyholder of the limitations of the current policy being proposed is important, but merely notifying them without providing solutions may leave them at risk.

This method also aligns with regulatory expectations, as brokers are required to act in the best interests of their clients and uphold standards of practice that ensure consumer protection. Therefore, exploring alternative options is the most judicious course of action when faced with policies that do not meet all necessary financial requirements.