State RegulationsOH specificDifficulty 2/5
An A&H policy is conditionally renewable. What does this mean for the insurer?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A conditionally renewable policy allows the insurer to decline renewal, but only on conditions that are stated in the policy itself. This places the clause between the insured-favorable types (non-cancelable and guaranteed renewable) and the insurer-favorable types (renewable at the insurer's option and nonrenewable) in the renewability framework of the Ohio Revised Code that the Ohio Department of Insurance tests. Because the permissible refusal grounds must be spelled out in the policy, the insured knows in advance exactly when renewal could be refused.
Why the other options are wrong
- A) Unconditional renewal as long as premiums are paid describes the guaranteed-renewable type, not conditionally renewable.
- B) A conditionally renewable policy can be declined, so long as the refusal follows a condition stated in the policy.
- D) Residency is not a built-in condition; the refusal grounds must be whatever conditions the policy itself specifies, whatever they are.
Memory hook
Conditional renewal: only the reasons the policy lists.