Legacy Code Gap Assessment

Genworth's long-term-care insurance business runs premium recalculations through a decades-old stored procedure library too large to hand you in full during an interview, so the interviewer gives you the excerpt below, representative of the patterns across the whole codebase, and asks what's missing.

CREATE PROCEDURE recalc_ltc_premium (@policy_id INT)
AS
BEGIN
    DECLARE @base_rate FLOAT
    DECLARE @age INT
    DECLARE @cursor CURSOR

    SET @cursor = CURSOR FOR
        SELECT age, base_rate FROM ltc_policies WHERE policy_id = @policy_id

    OPEN @cursor
    FETCH NEXT FROM @cursor INTO @age, @base_rate

    WHILE @@FETCH_STATUS = 0
    BEGIN
        IF @age > 65
            SET @base_rate = @base_rate * 1.4
        ELSE
            SET @base_rate = @base_rate * 1.15

        EXEC ('UPDATE ltc_policies SET premium = ' + CAST(@base_rate AS VARCHAR) +
              ' WHERE policy_id = ' + CAST(@policy_id AS VARCHAR))

        FETCH NEXT FROM @cursor INTO @age, @base_rate
    END

    CLOSE @cursor
    DEALLOCATE @cursor
END

Tell the interviewer what is missing from this code and how you would improve and manage changes to it going forward.