What is required if the prior carrier is not a CLUE participant?

The correct choice indicates that if the prior carrier is not a CLUE (Comprehensive Loss Underwriting Exchange) participant, a 3-year letter of experience is required. This requirement is essential because it serves as an alternative method to assess the risk associated with the property being insured.

When a prior carrier does not participate in CLUE, which consolidates claims information accessible to insurers, insurers need a different way to evaluate the underwriting risk. A letter of experience from the prior carrier provides a detailed summary of the insurance coverage and claims history over the past three years, allowing the new insurer to comprehensively understand the claims behavior associated with that policyholder.

The other options, while potentially useful in different contexts, do not fulfill the specific need to establish the history in the absence of CLUE participation. A summary of claims history for just one year would be insufficient and too narrow for making an informed underwriting decision. A waiver form does not provide any information about past claims history, and proof of payment history does not address the crucial aspect of claims experience which directly impacts the risk assessment.

Thus, the requirement for a 3-year letter of experience ensures that insurers can adequately assess the risk and make informed underwriting decisions, which is critical in the insurance process.