Asked by Ashly De Jesus on Apr 24, 2024
Verified
What does it mean when reformation occurs?
A) An insurer and a policy holder renegotiate the terms of an insurance contract because the risk of providing insurance to the policyholder has changed.
B) A court changes a written insurance policy when there was a mutual mistake or fraud on the part of the insurer so it conforms to the parties' supposed actual agreement
C) An insurance policy holder changes the beneficiary on an insurance policy and the insurer revises the policy contract.
D) An insurance contract is voluntarily reformed or modified by an insurer because of a unilateral mistake on the part of the insured.
Mutual Mistake
An error shared by all parties in a contract, leading to a misunderstanding regarding a fundamental fact or element of the agreement.
Fraud
Deliberate deception or misrepresentation intended to result in an unfair or unlawful gain.
Reformation
A legal remedy where a written agreement is officially corrected or amended to accurately reflect the true intentions of the parties involved.
- Determine the circumstances that may lead to the annulment or modification of an insurance agreement and acknowledge the rights and duties of the involved parties in these instances.
Verified Answer
Learning Objectives
- Determine the circumstances that may lead to the annulment or modification of an insurance agreement and acknowledge the rights and duties of the involved parties in these instances.
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