State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
An applicant honestly but incorrectly states that she never had back surgery, when in fact she had two procedures. The insurer would have declined the application had it known. Under CIC Section 359, the insurer may:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Section 359 permits rescission for a material false representation even when it was made innocently and without intent to deceive. Materiality under Section 334 is judged by the effect on the insurer's underwriting judgment, and here the insurer would have declined the risk had it known the truth. Because the false statement goes to a material fact, the policy is voidable regardless of the applicant's good faith, and rescission is the authorized remedy.
Why the other options are wrong
- A) An innocent misrepresentation still supports rescission when it is material; intent is not required.
- B) The statute authorizes rescission, not a partial reduction of benefits.
- C) Rescission operates from the policy's inception; it is not deferred to the renewal date.
Memory hook
An honest mistake plus a material fact still means rescindable.