A Texas Medicare supplement insured is diagnosed with a costly chronic illness. At renewal the insurer refuses to renew the policy, citing the insured's claims. Under the Texas Medicare supplement cancellation rule, the insurer's action is:

Why A is correct

Under 28 TAC 3.3306(E), an insurer may not cancel or refuse to renew a Medicare supplement policy because of the insured's health or claims; the permitted grounds are limited to nonpayment of premium and fraud or material misrepresentation. Advance notice is a procedural requirement in many contexts, but it does not manufacture a substantive ground the rule does not allow. The practical consequence is that a Medicare supplement insured can rely on the coverage continuing as long as premiums are paid and the application was truthful.

Why the other options are wrong

• B) The protection does not depend on the insured exhausting benefits; it applies for as long as the policy is in force.
• C) Claims experience exceeding premiums is not among the grounds the rule permits for ending the policy.
• D) Advance notice does not convert an impermissible ground into a lawful one.

Memory hook

Claims are not a cancellation ground; only nonpayment or fraud is.