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Security depo / application for my sister

I rented to my sister as a roommate for the last 6mos.  We are signing a new lease because I am moving out and will rent to her as the soul, full time tennant.  Is it fair to ask for a application completion?  I trust her, she pays on time; but I only have 400.00 security deposite on a 1,000.00/mo lease. She is not happy about filling out the application.
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If you trust her, and know her background, the lease would be more important than the application. If it were me, AND I DO NOT RENT TO FRIENDS OR FAMILY (it is my policy) I would just make sure the lease spells out everything. If you do not think she can afford the rental; maybe you should just straight out ask her.
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