Which renewal provision allows cancellation but only by class, with rate changes limited to class?

• A. Noncancelable
• B. Conditionally renewable
• C. Guaranteed renewable
• D. Optionally renewable

Answer: (B)

The main concept is renewal provisions and how they control the insurer’s ability to cancel or not renew a policy. The description fits the renewal provision that allows cancellation but only by class, with rate changes limited to the class. This is characteristic of conditionally renewable policies. Under this type, the insurer may choose not to renew or cancel, but only under specified conditions, and those decisions (including premium changes) apply to a whole class of insureds, not to an individual policyholder. That means risk-based adjustments are made at the class level, ensuring changes aren’t targeted at a single policy.

Noncancelable policies don’t allow cancellation by the insurer at all, so they don’t fit. Guaranteed renewable policies require renewal and allow rate changes with age or class but still prohibit cancellation, so that’s not it either. Optionally renewable policies give the insurer a broader right to not renew, without the same class-based restriction on cancellations and rate changes.