State RegulationsAZ specificDifficulty 3/5
Six months after an Arizona life policy was reinstated, the insurer discovers misrepresentations in the reinstatement application. Under A.R.S. 20-1227, the insurer may contest the reinstated policy:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under A.R.S. 20-1227, a reinstated Arizona life policy may be contested only within the same contestable period the policy provides after issue, measured from the reinstatement. The reinstatement therefore carries its own fresh contestable window, limited to misrepresentations or fraud material to the reinstatement. Insurers must act within that window or lose the ability to attack the reinstated coverage.
Why the other options are wrong
- A) The original contest period had run, but A.R.S. 20-1227 grants a new contestable window tied to the reinstatement itself.
- B) Contestability is not unlimited; the statute confines the challenge to the policy's contestable period measured from reinstatement.
- D) No DIFI approval is needed to contest a reinstatement; the statutory conditions in A.R.S. 20-1227 govern directly.
Memory hook
Reinstatement resets the contest clock — the insurer must act inside the fresh window.