11 NCAC 04 .0316             CONTESTABILITY CLAUSE AND RESCISSION

If an insurer does not promptly attempt to rescind an accident, health or disability policy upon becoming aware that the insured's application contained false statements, the insurer may not subsequently use such false statements as a basis for attempted rescission or alteration of the policy.  The Commissioner shall consider failure to adhere to this principle an unfair trade practice when such failure is so frequent as to indicate a general business practice.

 

History Note:        Authority G.S. 58-2-40; 58-63-40; 58-65-1; 58-65-40;

Eff. December 15, 1979.