QuestionJuly 7, 2025

Which of the following statements is CORRECT about an insurance company that discovers collusion A. The company is obligated to pay a claim. B. The company is relieved of its obligation to pay a claim. The company must continue to provide coverage for the full term of the policy. D. The company may extend the incontestable period to three years.

Which of the following statements is CORRECT about an insurance company that discovers collusion A. The company is obligated to pay a claim. B. The company is relieved of its obligation to pay a claim. The company must continue to provide coverage for the full term of the policy. D. The company may extend the incontestable period to three years.
Which of the following statements is CORRECT about an insurance company that discovers collusion
A. The company is obligated to pay a claim.
B. The company is relieved of its obligation to pay a claim.
The company must continue to provide coverage for the full term of the policy.
D. The company may extend the incontestable period to three years.

Solution
3.5(248 votes)

Answer

B. The company is relieved of its obligation to pay a claim. Explanation 1. Identify the impact of collusion on claims Collusion typically involves fraudulent activity, which can void contractual obligations. 2. Determine the company's obligation regarding claims If collusion is discovered, the company is relieved of its obligation to pay a claim due to fraud.

Explanation

1. Identify the impact of collusion on claims<br /> Collusion typically involves fraudulent activity, which can void contractual obligations.<br />2. Determine the company's obligation regarding claims<br /> If collusion is discovered, the company is relieved of its obligation to pay a claim due to fraud.
Click to rate:

Similar Questions