State RegulationsAZ specificDifficulty 2/5
An Arizona life policy was reinstated three months ago. The insurer now finds fraudulent statements in the reinstatement application. Under A.R.S. 20-1227, what may the insurer do?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A.R.S. 20-1227 lets the insurer contest a reinstated policy within the same contestable window the policy provides after issue - a fresh two-year period running from reinstatement - for fraud or material statements relating to the reinstatement. Three months in, the insurer is squarely within that window.
Why the other options are wrong
- A) The statute expressly preserves a fresh contest window after reinstatement.
- C) There is no ten-year window; the period mirrors the policy's own post-issue contestable period.
- D) No Director approval is needed to exercise the statutory contest right.
Memory hook
Reinstatement buys the insurer a fresh two years.