State RegulationsNY specificDifficulty 2/5
An insurer cancels an individual accident and health policy during the permitted cancellation period, and a claim had originated before the cancellation's effective date. Under N.Y. Ins. Law §3216(d)(2)(H), what are the insurer's obligations?
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 B is correct
Under N.Y. Ins. Law §3216(d)(2)(H), when an insurer cancels during the permitted period it must promptly return the pro-rata unearned portion of any premium paid, and the cancellation is without prejudice to any claim originating before the effective date of cancellation. A loss that originated pre-cancellation is therefore payable, and the insured receives back the premium for the coverage period cut short.
Why the other options are wrong
- A) No cancellation charge may be retained; the pro-rata unearned premium must be promptly refunded, and pre-cancellation claims remain payable.
- C) The refund obligation is right, but the pending claim is not cut off; claims originating before the cancellation's effective date survive.
- D) The refund is owed promptly upon cancellation and does not depend on the insured obtaining replacement coverage.
Memory hook
Insurer cancels: pro-rata refund, pre-existing claims survive.