An insurer issues a health policy even though its own records show the applicant disclosed a heart condition on a prior application with the same company. The insurer later tries to rescind for non-disclosure of that same condition. Under California law, the insurer's rescission attempt will most likely:

Why A is correct

Concealment is the failure to disclose a material fact that the other party did not know and could not readily discover. Under California's concealment rules (CIC Sections 330-333), there is no duty to disclose facts the other party already knows, is presumed to know, or could easily ascertain. Because the insurer's own records contained the condition, it was not actually misled, so the concealment basis for rescission fails. Rescission requires that the insurer's decision was made without knowledge of the true facts.

Why the other options are wrong

• B) An omission is concealment only if the insurer lacked knowledge of the fact; knowledge defeats the claim.
• C) Concealment may be intentional or unintentional under CIC Sections 330-331; the insurer's lack of knowledge, not the applicant's intent, is the fatal gap here.
• D) The rescission analysis turns on the insurer's knowledge at issuance, not on whether a related claim has been filed.

Memory hook

You cannot hide a fact from someone who already holds it in their own file.