State RegulationsOH specificDifficulty 3/5
An Ohio insurer has collected 3 annual premiums on an individual life policy and then discovers an error or omission in the application. Under the legacy estoppel rule, what may the insurer still do?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
ORC 3911.07 provides that after the insurer has received 3 annual premiums, it is estopped from defending the policy on any ground other than fraud, except as to age, for errors, omissions, or misstatements in the application. Fraud remains a live defense, and age remains outside the estoppel because it is adjusted rather than litigated. This legacy rule supplements the modern 2-year incontestability clause rather than replacing it.
Why the other options are wrong
- B) After 3 annual premiums, ORC 3911.07 strips the insurer of defenses for application errors other than fraud, so contesting on the mere error is barred.
- C) Rescission for any minor inaccuracy is exactly what the estoppel forbids; only fraud (and the age exception) survives under ORC 3911.07.
- D) Voiding for an omission and refunding premiums is unavailable; ORC 3911.07 leaves the insurer only the fraud defense, with age excepted.
Memory hook
Three premiums in, only fraud (and age) can get the insurer out.