Rescission

The retroactive cancellation of a health insurance policy. Insurance companies will sometimes retroactively cancel your entire policy if you made a mistake on your initial application when you buy an individual market insurance policy. Under the Affordable Care Act, rescission is illegal except in cases of fraud or intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage.

The process of voiding a health plan from its inception usually based on the grounds of material misrepresentation or omission on the application for insurance coverage that would have resulted in a different decision by the health insurer with respect to issuing coverage. The ACA prohibits rescissions except in cases of fraud or intentional misrepresentation of a relevant fact. Minn. Stat. 62A.04 further provides that after a health policy has been in effect for two years, no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy can be used to rescind the policy.

The cancellation, or “tearing-up,” of a contract. Some consumer loans (home mortgages) feature a 3-day right of rescission during which the borrower can cancel the loan without penalty.

The cancellation or annulment of a transaction or contract by operation of law or by mutual consent. Borrowers may have a right to cancel certain mortgage refinance transactions within three business days after closing, or for up to three years in certain instances.

The undoing of a contract; repeal.

The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.

An action by the President canceling budget authority previously appropriated but not yet obligated or spent. If both Houses of Congress do not approve the proposed rescission within 45 days, the President must obligate the BA as intended by Congress.