Under CIC Section 10113, statements made by an applicant in a disability insurance application are, in the absence of fraud:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 10113 provides that all statements purporting to be made by the insured shall, in the absence of fraud, be representations and not warranties. A representation is a statement that induces the contract but does not automatically void it if incorrect; the insurer must show materiality and reliance to rescind. A warranty would require literal compliance, making any deviation fatal to coverage. California deliberately classifies insureds' statements as representations to protect policyholders, and the section declares any waiver of this protection void.
Why the other options are wrong
- B) The statute expressly makes the statements representations, not warranties; the distinction favors the insured.
- C) An application statement does not guarantee future insurability; it describes facts at the time of application.
- D) Nothing in Section 10113 waives the insurer's underwriting duties; the rule concerns how the insured's statements are characterized.
Memory hook
Warranty means literal or lost. Representation means material and relied upon. California says: representations.