State RegulationsMI specificDifficulty 2/5
A Michigan accident and health policy is conditionally renewable, stating that it may be renewed only while the insured remains employed on a full-time basis. The insured eventually retires from full-time work, and the insurer declines to renew when the policy period ends. Is the insurer's action proper?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A conditionally renewable policy under Michigan's renewability classifications, including classifications governed by M.C.L. 500.2213b, renews only while the circumstances specified in the policy continue. Here the policy itself conditions renewal on continued full-time employment, and the insured's retirement ends that condition. The insurer's refusal to renew is therefore a proper application of the printed condition, not an arbitrary or discretionary declination.
Why the other options are wrong
- A) The conditional classification contains no minimum-age renewal requirement; the governing conditions are those printed in the policy.
- C) Guaranteed renewal while premiums are paid describes guaranteed renewable coverage; conditionally renewable coverage depends on the stated conditions being met.
- D) There is no requirement to treat other policies alike; the renewal decision turns on the condition in this policy.
Memory hook
Condition dies, renewal dies: conditional renewal ends when the printed condition does.