An Ohio policyholder returns an individual A&H policy during the free-look period. The policy provided pro rata coverage. How is the refund calculated?

Why C is correct

Under ORC 3923.31, when a returned individual sickness and accident policy provides pro rata coverage, the insurer may charge only a per diem amount for the days the policy was actually in force and refunds the balance of the premium. If the policy does not provide pro rata coverage, the rule is different: the policy is void from the beginning and the entire premium is returned. The Ohio Department of Insurance expects candidates to distinguish these two refund treatments within the 10-day right to examine.

Why the other options are wrong

• A) Partial in-force coverage does not eliminate the refund; it only permits the per diem charge under ORC 3923.31.
• B) A no-deduction full refund is the treatment for a policy void from the beginning — that is, one without pro rata coverage — not for a pro rata policy.
• D) The refund is not a fixed half; it is the premium less the per diem cost of the coverage actually used.

Memory hook

Pro rata policy: pay per day you kept it.