State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A disability policy has been in force for three years. Under the 'Time Limit on Certain Defenses' provision (CIC §10350.2), the insurer may NOT use a misstatement in the application to void the policy or deny a claim unless the misstatement was:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC §10350.2 requires disability policies to include a time-limit provision: after two years from the date of issue, no misstatements made by the applicant — EXCEPT fraudulent misstatements — may be used to void the policy or deny a claim. Once the two-year window passes, innocent or unintentional misstatements no longer give the insurer a defense. Fraud is carved out of the time limit, so a fraudulent misstatement can still be used even after the two-year period.
Why the other options are wrong
- B) An unintentional misstatement is precisely what the two-year time limit bars the insurer from using after the period expires.
- C) How the misstatement was discovered is irrelevant; the issue is whether the misstatement was fraudulent.
- D) Occupation misstatements are addressed separately by Sections 10369.2-10369.6, and the time limit still applies unless the misstatement is fraudulent.
Memory hook
Two years and innocent mistakes are forgiven. Fraud, however, never clocks out.