Retroactive Rescission: Calif. Takes A Step Backward

Law360, New York (September 12, 2008, 12:00 AM EDT) -- In the context of individual coverage, the underwriting process strives to ensure that each applicant receives a fair, consistent assessment and that the premium appropriately reflects the risk.

Case law reveals that while most prospective insureds accurately disclose all information sought on the application, others omit key data or provide false responses that are discovered only later, during the investigation of a particular claim during the contestability period. (Matilla v. Farmers New World Life Ins., 960 F.Supp. 223, 224 (N.D. Cal.1997).)

Historically, carriers rescinded coverage, seeking...
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