State RegulationsPA specificDifficulty 2/5
An insured with an accident and health policy leaves a desk job for substantially more hazardous work and does not notify the insurer. He is injured in an accident related to the hazardous work. Under the change-of-occupation provision of 40 P.S. § 753(B)(1), what may the insurer do?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under the change-of-occupation provision of 40 P.S. § 753(B)(1), when an insured moves to a more hazardous occupation, the insurer does not void the policy — it pays only the benefit the premium paid would have purchased at the more hazardous occupational class. The remedy is proportional, matching the price of coverage to the true risk the insurer actually carried.
Why the other options are wrong
- A) The provision's remedy is benefit adjustment, not rescission; the policy survives the occupation change.
- C) Occupation changes do matter: a shift to more hazardous work entitles the insurer to scale the benefit to the premium actually paid.
- D) A non-reporting occupation change triggers proportional reduction under 40 P.S. § 753(B)(1); it is not treated as fraud warranting denial.
Memory hook
Riskier job, smaller benefit — the premium buys what the risk class says.