State RegulationsAZ specificDifficulty 3/5
An insurer discovers 3 years after issue that a health applicant made an intentional misstatement in the application. Under A.R.S. 20-1346, may the insurer use the misstatement to void the policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-1346 bars misstatement defenses after 2 years from issue except in cases of fraud. An intentional misstatement discovered 3 years after issue is exactly the kind of fraudulent misstatement the exception preserves, so the insurer may still raise it to void the coverage despite the lapse of the 2-year period.
Why the other options are wrong
- A) Innocent misstatements are cut off after 2 years; only the fraud exception survives.
- B) The statute expressly carves out fraud, so the defense is not barred in every case.
- C) The fraud exception is not limited to age misstatements.
Memory hook
Time bars mistakes, never fraud.