Monica, a 45-year-old entrepreneur in Nova Scotia, has a 'Conditionally Renewable' disability insurance policy. Last year, she filed a claim for a common back injury that kept her from working for three months. What action can the insurer potentially take at the next renewal based on her claim history?

Question: Monica, a 45-year-old entrepreneur in Nova Scotia, has a 'Conditionally Renewable' disability insurance policy. Last year, she filed a claim for a common back injury that kept her from working for three months. What action can the insurer potentially take at the next renewal based on her claim history?

Answer options: ✅ The insurer can increase her premiums for the back injury or exclude future claims related to her back.

• The insurer can only increase premiums for the entire class of policyholders, not specifically for Monica.
• The insurer cannot make any changes to the policy or premiums due to her past claim.
• The insurer must cancel Monica's policy immediately and refund all her premiums.

Correct answer: The insurer can increase her premiums for the back injury or exclude future claims related to her back.

Explanation: With a 'Conditionally Renewable' provision, the insurer may decline to renew the policy or renew it with different terms (e.g., increased premiums or new exclusions) based on factors like changes in the insured's health, claims experience, or occupation.