State RegulationsMI specificDifficulty 2/5
A Lansing applicant for individual disability income coverage voluntarily discloses the results of a genetic test showing an elevated risk of a hereditary condition, although the applicant is in good health today. How may the insurer treat this information under M.C.L. 500.3407b of the Michigan Insurance Code?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
M.C.L. 500.3407b forbids Michigan insurers from using genetic test results in underwriting decisions, so the disclosed result cannot support a decline, a rate increase, or a coverage limitation aimed at the hereditary condition. The insurer must underwrite on other lawful information about the applicant's present health. The practical effect is that voluntary disclosure of a genetic test cannot be turned into a coverage penalty for a disability income applicant who is currently healthy.
Why the other options are wrong
- A) Rating up because of the genetic result is precisely the underwriting use the statute prohibits.
- B) Declining solely on the genetic test result is a prohibited underwriting use.
- C) Imposing an exclusion rider keyed to the genetic result would be using the result to limit coverage, which the statute forbids.
Memory hook
A genetic test result is an underwriting dead end.