State RegulationsNY specificDifficulty 2/5
More than two years after an individual health policy was issued in Rochester, the insurer learns that the insured honestly but mistakenly omitted a prior medical consultation from the application. The insurer now wants to rescind the policy. What is the result?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §3216(d)(1)(B), after two years from the date of issue the insurer may not contest the policy based on the insured's health before issue, except for fraudulent misstatements. An honest mistake about medical history is exactly what the provision shields once the contestable period has run, so rescission is no longer available. The insurer's opportunity to investigate ended with the contestable window.
Why the other options are wrong
- A) Only fraudulent misstatements survive the two-year limit; honest ones do not.
- B) No Superintendent-approval mechanism exists to revive a time-barred contest.
- D) Individual health policies have no open-ended contestable window.
Memory hook
Honest errors are forgiven after two years; only fraud keeps the door open.