ACE Life Assurance Co can issue a policy to Dermot before verifying his identity PROVIDED:

• A. It verifies Dermot's identity before paying out under the policy.
• B. The policy does not carry an encashment value.
• C. It verifies Dermot's identity within the statutory cooling off period allowed.
• D. It verifies that Dermot is a resident of the State.

Answer: (A)

Verifying a person’s identity is a crucial control to prevent fraud and ensure that life insurance benefits go to the rightful claimant. Regulators expect that, before any payout is made, the insurer has confirmed who the policy owner or beneficiary is. In this scenario, the policy can be issued first, as long as the identity is verified before any payout occurs. That approach balances efficient policy issuance with the essential protection against paying benefits to the wrong person.

The other options don’t address this protective step. The presence or absence of an encashment value doesn’t relate to identity checks for benefit payout. The cooling-off period concerns cancellation rights after sale, not the timing of identity verification for paying claims. Residency status touches on jurisdiction or tax rules, not the fundamental payout verification requirement.