State RegulationsPA specificDifficulty 1/5
An insured lets an accident and health policy lapse and submits a reinstatement application with a conditional receipt. Under 40 P.S. § 753(A)(4), when does the reinstated coverage take effect?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
When the insurer requires a reinstatement application together with a conditional receipt, 40 P.S. § 753(A)(4) makes the reinstated coverage effective upon the insurer's approval or on the 45th day after the conditional receipt was issued, whichever occurs first. The insured is therefore never left waiting indefinitely: the conditional receipt self-executes if the insurer does not act in time.
Why the other options are wrong
- A) Reinstatement is not automatic on receipt of the application; the statute keys effectiveness to approval or the 45th day, whichever first.
- C) The outside date is the 45th day after the conditional receipt, not the 90th, and medical underwriting does not extend the deadline.
- D) The provision governs when coverage reinstates, not a two-year prepayment; back premiums are handled separately.
Memory hook
Approved early or auto-live on day 45 — the conditional receipt has its own clock.