State RegulationsVA specificDifficulty 2/5
An insured holds an individual accident and sickness policy issued as guaranteed renewable. Under Virginia's renewability rules, what may the insurer change when the policy renews?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under a guaranteed renewable contract, as governed by Va. Code § 38.2-3514.2 and Virginia's renewability regulation 14 VAC 5-141-140(A) and (C), the insurer must continue the policy on its original terms but may adjust premiums — and only on a class basis, never by singling out an individual insured's claims experience. That distinction is the heart of guaranteed renewable: the insured keeps the coverage; the insurer keeps the ability to reprice whole classes actuarially. The Virginia Bureau of Insurance polices the line between class-level premium changes and individualized repricing.
Why the other options are wrong
- A) Changing policy terms at renewal is exactly what guaranteed renewable forbids; only class-based premium adjustment is allowed.
- B) Freezing premiums forever describes a noncancellable style of contract, not guaranteed renewable.
- C) Rating an individual on that person's own claims history is precisely the repricing method the renewability rules prohibit.
Memory hook
Guaranteed renewable: terms locked, premiums movable by class only.