Common use of Rescission Claims Clause in Contracts

Rescission Claims. A rescission of coverage is considered a special type of claim. A rescission is defined as any cancellation or discontinuation of coverage that has a retroactive effect and is based upon the Member’s fraud or an intentional misrepresentation of a material fact. A cancellation or discontinuance of coverage that has a retroactive effect is not a rescission if and to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage, or to routine changes such as eligibility updates. A cancellation or discontinuance with a prospective effect only is not a rescission.