A New York individual accident and health policy is subject to the renewability requirements of N.Y. Ins. Law §3216(g). Whose option controls whether the policy is renewed?
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 C is correct
Under N.Y. Ins. Law §3216(g), an individual accident and health policy is renewable at the option of the insured. The insurer's ability to say no is confined to the grounds the statute permits, such as nonpayment of premiums, fraud, discontinuance of all coverage of that type, or complete withdrawal from the individual market; the insured's health status or claims experience is never a permitted reason. The renewability clause therefore promises the policyholder continuity of coverage as long as premiums are paid, which is the practical value a New York agent should explain at the point of sale.
Why the other options are wrong
- A) The insurer does not hold an annual option; §3216(g) puts renewal in the insured's hands and limits the insurer's refusal to the statutory grounds.
- B) No mutual agreement is required; the policy renews at the insured's option without the insurer's consent, subject only to the insurer's limited statutory grounds for refusal.
- D) The Superintendent of Financial Services regulates insurers and approves policy forms but does not hold a personal renewal option over each policyholder's contract.
Memory hook
Renewability belongs to the insured: the policy stays in force unless the insurer has a statutory reason to refuse.