Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceMedium
A Florida agent is explaining the renewability provisions of a medical expense policy to a client. The policy states that the insurer has the right to refuse to renew the policy on its anniversary date, but only if they do so for ALL policies within that class of insureds. Which type of renewability provision does this describe?
- ANon-cancellable
- BConditionally Renewable
- CGuaranteed Renewable
- DOptionally Renewable
Show answer & explanationAnswer & explanation
Correct answer: B. Conditionally Renewable
A conditionally renewable policy allows the insurer to refuse renewal under certain conditions specified in the policy, such as non-renewal for an entire class of insureds. The insurer cannot non-renew an individual policyholder arbitrarily.
Why the other options are wrong
- A. Non-cancellable policies guarantee renewal and also guarantee that premiums cannot be increased.
- C. Guaranteed renewable policies assure renewal without changes to coverage, though premiums can increase by class.
- D. Optionally renewable policies allow the insurer to refuse renewal for any reason on the anniversary date.
Conditionally Renewable
A health insurance policy renewability provision where the insurer may refuse renewal only under conditions stated in the policy, not for individual reasons.
- Insurer cannot refuse renewal arbitrarily for an individual.
- Conditions for non-renewal must be specified (e.g., class-wide non-renewal).
- Premiums may be increased by class.
Memory trick: Renewability is about control: who can cancel, who can change, and when.