State RegulationsCO specificDifficulty 2/5
Under the termination rules applicable to Colorado individual sickness and accident policies, a policy may be terminated retroactively only in which situation?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
C.R.S. § 10-16-202's time-limit-on-defenses provision bars retroactive termination of an individual S&A policy except for fraud or intentional misrepresentation, and after 2 YEARS from issue no misstatement (other than a fraudulent one) can void coverage or deny claims. Any other termination requires 30 DAYS' advance notice. This protects insureds from hindsight rescissions while still letting insurers police genuine fraud.
Why the other options are wrong
- A) A change in the insurer's financial condition is not a ground for retroactive termination under Colorado law.
- B) Deteriorating health after issue is exactly what the time-limit-on-defenses provision protects against; it cannot justify retroactive termination.
- C) Replacing coverage with another insurer is the insured's right and is unrelated to retroactive termination grounds.
Memory hook
Rewind the policy only for fraud — everything else gets 30 days' warning.