State RegulationsPA specificDifficulty 2/5
An applicant for an individual accident and health policy receives the policy and, after reading the exclusions, decides the coverage is not what she wants. Under the right-to-examine provision required by 40 P.S. § 752(A)(10) and 31 Pa. Code 89.73, what happens when she returns the policy within the examination period?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The right-to-examine (free look) provision required by 40 P.S. § 752(A)(10) and implemented through 31 Pa. Code 89.73 lets the applicant return the policy within the examination period and receive a full refund of all premiums paid. The policy is unwound as if it never took effect, giving consumers a genuine no-cost opportunity to read the actual contract terms before being bound.
Why the other options are wrong
- A) The refund under the right-to-examine is complete; the insurer may not pocket a service charge for a policy returned within the examination period.
- B) Returning the policy ends the coverage arrangement; the insurer has no basis to keep it in force against the applicant's wishes.
- D) There is no conversion mechanism in the free-look provision; the choice is to keep the policy as issued or return it for a full premium refund.
Memory hook
Free look, full refund — read it, return it, owe nothing.