State RegulationsOH specificDifficulty 1/5
An insured cancels her Ohio individual sickness and accident policy mid-term. Under Ohio law, what happens to the premium for the unexpired period of coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
ORC 3923.04(M) pairs the insurer's no-cancellation rule with the insured's right to cancel at any time and upon the terms of the policy, and it requires that unearned premium be returned promptly when the insured cancels. The refund reflects the short-rate return of the unused coverage period.
Why the other options are wrong
- A) Wrong because ORC 3923.04(M) requires a prompt return of unearned premium; cancellation does not forfeit it.
- B) Wrong because the refund is due promptly upon cancellation, not deferred to an anniversary.
- D) Wrong because retaining the unearned premium as a penalty contradicts the statutory refund duty.
Memory hook
You cancel, they pay back — promptly.