State RegulationsMI specificDifficulty 1/5
An insured has carried a noncancelable individual accident and health policy for a long time and has now developed additional health problems, so claims are more likely. Under Michigan's renewability classifications, what may the insurer do at renewal?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Within the renewability classifications Michigan recognizes under provisions including M.C.L. 500.2213b, noncancelable is the strongest protection offered to an A&H insured: the insurer surrenders both the right to cancel and the right to reprice the individual policy. Even after the insured's health worsens, coverage continues on the original premium as long as the insured pays it, and only the insured decides whether to renew.
Why the other options are wrong
- B) Individual-risk repricing is exactly what the noncancelable classification forbids; the rate is locked.
- C) Class-wide increases describe guaranteed renewable coverage, a weaker classification than noncancelable.
- D) A health-based declination is barred in this classification; cancellation and nonrenewal rights were given up at issue.
Memory hook
Noncancelable: same person, same price — only the insured walks away.