text:
(a) Life insurance conforming to all the following conditions is another form of group life insurance:

(1) Covering one of the following groups:

(A) All members are or become borrowers from one financial institution, including subsidiary or affiliated persons, under an agreement to repay the sum borrowed.

(B) All members are or become purchasers of merchandise or other property, exclusive of securities, investment certificates, and bank deposits, under an agreement to pay the balance of the purchase price.

(2) The group numbers not less than 100 new entrants yearly or, in the case of a credit union, not less than 50 borrowers yearly.

(3) The amount insured on any one borrower or purchaser does not exceed:

(A) The amount of the loan commitment in the case of an agricultural or horticultural loan commitment, as defined in Section 10203.55, repayable in one sum or in irregular installments within a period not in excess of 18 months from the initial date of the loan commitment.

(B) In all other cases, the balance of the indebtedness to the financial institution or vendor.

(4) The repayment or payment of purchase price is to be made under the agreement of loan or purchase in substantially equal installments over a period not exceeding 40 years, in installments that may vary according to the terms of a signed agreement, in payments or installments in accordance with the usual terms of the creditor in the case of an open-ended agreement to extend credit, a revolving loan, or revolving charge account, or in one sum or irregular installments within a period not in excess of 18 months from the initial date of the commitment on an agricultural or horticultural loan.

(5) The policy is issued upon application of and made payable to the financial institution, vendor, or a creditor to whom the vendor may transfer title to the indebtedness, as beneficiary, and the premiums are paid by or through the financial institution, vendor, or creditor.

(b) A policy of insurance conforming to this section is not subject to Section 10209 of this code or Section 704.100 of the Code of Civil Procedure.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 467. Effective January 1, 2007.)


kind: section

code: INS

text:
Life insurance conforming to all the following conditions is another form of group life insurance:

(a) Written under a policy covering when issued, not less than 10 agents.

(b) Written under a policy issued to a principal, or if such principal be a life or life and disability insurer, by or to such principal, and with whom, or with an agent of whom, each of such agents is under contract to render personal services for a commission or other fixed or ascertainable compensation, the premium on which is to be paid by the principal or by the principal and the agents jointly, and insuring either all of the agents or all of any class or classes thereof, determined by conditions pertaining to the services to be rendered by such agents, provided that if a policy is intended to insure several such classes it may be issued to insure any such class of which 75 percent are covered and extended to other classes as 75 percent thereof express the desire to be covered.

(c) For amounts of insurance based upon some plan which will preclude individual selection.

(d) For the benefit of persons other than the principal.

(e) When the premium is to be paid by the principal and agents jointly, and the benefits of the policy are offered to all eligible agents, written under a policy insuring, when issued, not less than 75 percent of such agents.

(f) Terminating, if, subsequent to issue (1) the number of agents insured falls below 10 lives or 75 percent of the number eligible, and (2) the contribution of the agents, if the premiums for the insurance are on a renewable term insurance basis, exceed one dollar ($1) per month per one thousand dollars ($1,000) of insurance coverage plus an amount equal to any additional premium per one thousand dollars ($1,000) of insurance coverage charged to cover one or more hazardous occupations.

Such insurance may be issued with or without medical examination. For the purpose of this section the term agents shall be deemed to include agents, solicitors and salesmen.

history: (History: Amended by Stats. 1959, Ch. 571.)

division: 2. CLASSES OF INSURANCE

part: 2. LIFE AND DISABILITY INSURANCE

chapter: 2. Group Life Policies

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 2. Group Life Policies


text:
Life insurance conforming to all of the following conditions is another form of group life insurance:

(a) Covering the lives of every eligible member of a group of persons who become or are named depositors under a savings account plan, established by a financial institution including subsidiary or affiliated persons, which plan provides for periodic deposits of like amounts.

(b) The period during which the deposits may be made under the plan does not exceed 60 consecutive months, and the total amount of insurance under the policy on any one depositor does not exceed the difference between the amounts deposited and the maximum amount that may be deposited under the plan and does not exceed one thousand five hundred dollars ($1,500) on any one life.

(c) The group numbers 100 new entrants yearly.

(d) The policy is issued upon application of and made payable to the financial institution as beneficiary, and the premiums are paid by or through the financial institution.

(e) The policy of insurance conforming to this section is not subject to Section 10209 or of this code or Section 704.100 of the Code of Civil Procedure.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 468. Effective January 1, 2007.)


text: In addition to the other specific circumstances under which a group life policy may be issued under this chapter a group life policy may be issued to an existing insured to replace an existing valid group life policy if: (1) it provides the same benefits at the same or a lesser rate as the policy to be replaced: (2) it offers such benefits to all persons covered by the policy to be replaced; and (3) 90 percent of all persons covered by the policy to be replaced become insured under the new policy.

history: (History: Added by Stats. 1955, Ch. 664.)


text:
(a) Life insurance conforming to all of the following conditions is another form of group life insurance:

(1) Written under a policy issued and delivered in connection with the payment of benefits against the risk of loss in the value of redeemable securities of the insured investor issued by an investment company or companies operating under the Investment Company Act of 1940, as amended, and whose redeemable securities are registered under the Securities Act of 1933, as amended. For the purposes of this section, such benefits shall be referred to as group investment return assurance.

(2) Covering the lives of every eligible member of a group of persons who are or become investors in an investment company or companies.

(3) The group numbers not less than 100 investors yearly.

(4) The amount of insurance on any one investor does not exceed the amount of his investment, and does not exceed twenty thousand dollars ($20,000) on any one life.

(5) The period of assurance for each investor shall not extend over a period exceeding the life of such investor.

(6) The policy is issued upon the application of the investment company or companies, and the premiums are paid by the investment company, the investor, or jointly by the investment company and the investor.

Such insurance may be issued with or without medical examination.

(7) The policy provides a benefit equal to the difference between the amount paid for such redeemable securities and the value of such redeemable securities at the earlier of either (A) the end of the certificate period, or (B) the date of death of the insured.

(8) To protect the public and policyholders located in this state from hazardous operation by domestic, foreign, or alien companies, and to further the purpose and provision of this part, no domestic, foreign, or alien insurance company shall undertake the issuance of any policy providing for group investment return assurance until such company has satisfied the commissioner that its condition or method of operation in connection with the issuance of such policies shall not be such as to render its operation hazardous to the public, or its policyholders in this state, and, whether domestic, foreign, or alien, that it meets the conditions prescribed in Section 717 for the issuance of a certificate of authority. In the determination of the qualification of a company requesting authority to issue policies providing for group investment return assurance within this state, the commissioner shall consider, in addition to the requirements of Section 717, all of the following: (A) the history of the company, (B) the character, responsibility, and general fitness of the officers and directors of the company, (C) the regulation of a foreign company by its state of domicile, (D) the adequacy of the investment management which the company is providing, and (E) the company’s arrangements for the supervision of the marketing of such policies. No company may provide group investment return assurance in its policies unless it is an admitted insurer having and maintaining a combined capital and surplus of at least two million dollars ($2,000,000).

(9) In addition to the requirements of paragraph (8), no admitted insurer may provide group investment return assurance in its policies unless it establishes a special contingency fund of not less than one million dollars ($1,000,000). This fund shall be deemed to constitute a reserve liability in addition to other reserves of such insurer. In the event an insurer issues both group and individual investment return assurance, such special contingency fund shall not be less than one million dollars ($1,000,000) for both group and individual assurance.

(b) The commissioner shall require the payment of two hundred fifty dollars ($250) as a fee for the determination of qualification required by this section. Upon completion of the determination of qualification, and whether authorization to issue policies providing group investment return benefits is granted or denied, the commissioner shall require the payment of such additional amounts from the requesting insurer as may be necessary to defray all administrative costs in excess of two hundred fifty dollars ($250) incurred by the commissioner in making such determination.

(c) On and after the effective date of this section, a group investment return assurance policy, or certificate evidencing such insurance, shall not be issued or delivered in this state until a copy of the form thereof is filed with the commissioner, the fees required by Section 12973.9 are paid, and the commissioner has given written approval of such form.

(d) No certificate of group investment return assurance shall be delivered or issued for delivery to any person in this state unless each such certificate does all of the following:

(1) Includes a statement on the first page thereof, in boldface type, that in the event that the value of the redeemable securities covered by the contract exceeds the amount paid for such securities, there shall be no benefit.

(2) Provides that the reserves for all group investment return assurance policies shall be computed and maintained on a basis which shall place an actuarially sound value on the liabilities under such policies. To provide a basis for the determination of such actuarially sound values, the commissioner, from time to time, shall adopt rules requiring the use of appropriate tables of morbidity, mortality, interest rates, and valuation methods for such reserves.

(e) In furtherance of the purpose of this section, the commissioner may make reasonable rules and regulations therefor. Such rules and regulations shall be adopted, amended or repealed in accordance with the procedure provided in Chapter 4.5 (commencing with Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Added by Stats. 1971, Ch. 1565.)


text: An agricultural or horticultural loan commitment as used in Section 10203.5 and in Article 5.9 (commencing with Section 779.1), Chapter 1, Part 2, Division 1 means a binding agreement to loan money up to a fixed amount as needed for agricultural or horticultural purposes, which commitment is issued by:(1) A national or state commercial bank; or(2) A federal intermediate credit bank or a production credit association organized under the Farm Credit Act of 1933, as amended;lawfully operating in this State.

history: (History: Amended by Stats. 1963, Ch. 313.)


text: For the purpose of this chapter, the term “employer” includes the association or union designated by Section 10203, and the institution, vendor, credit union, or creditor designated by Sections 10203.5 and 10203.6, and the principal designated by Section 10203.7, and the trustees designated by Section 10202. 8, and the term “employee” includes the members of such union, credit union or association and the debtors of or purchasers from such institution, credit union, vendor or creditor, the agents referred to in Section 10203.7, and the employees and members referred to in Section 10202.8.

history: (History: Amended by Stats. 1961, Ch. 142.)


text:
(a) In addition to the issuance of group life insurance to groups in this state as permitted elsewhere in this chapter, the commissioner may approve the issuance of group life insurance if the insurer or applicant proves to the satisfaction of the commissioner each of the following:

(1) The policy, when issued, covers no fewer than 10 eligible group members.

(2) There is a common enterprise or economic or social affinity or relationship among members of the group.

(3) The premiums charged are reasonable in relation to the benefits provided under the group insurance policy.

(4) The issuance of the policy would result in economies of acquisition or administration, would be actuarially sound, and would not be contrary to the best interests of the public.

(5) The group was formed in good faith for purposes other than obtaining insurance.

(6) If the group policyholder is an association, the association has a constitution and bylaws and has been in existence for more than two years.

(7) The insurer has been actively engaged in the business of writing the types of coverage offered in the group insurance policy for insureds other than the type of group covered by the policy, and is not organized solely or principally for the purpose of furnishing coverage to groups of this type.

(b) An insurer under a policy covered by this section may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.

(c) A fee of five hundred dollars ($500) shall be charged to each insurer or applicant for each filing made pursuant to this section.

history: (History: Added by Stats. 2005, Ch. 174, Sec. 1. Effective January 1, 2006.)


text: A policy of group life insurance shall not be issued or delivered in this State nor, except as otherwise provided in Section 10205.5, shall an insurer provide or agree to provide group life coverage until a copy of the form of the policy is filed with the commissioner and approved by him. Except as provided in Section 10211, such policy shall not be so issued or delivered unless it contains in substance the provisions set forth in Sections 10206 to 10210 hereof.

history: (History: Amended by Stats. 1953, Ch. 624.)


text:
An insurer is permitted to provide group life coverage prior to the approval of the form of the policy if all of the conditions of (a) are met prior thereto and if thereafter it acts as required by (b).

(a) The conditions precedent are:

(1) The group is one eligible for coverage pursuant to the provisions of this article; and

(2) An executed memorandum of insurance has been or is concurrently delivered to the entity which is to become the policyholder containing a provision that unless a policy the form of which has been approved by the commissioner and embodying the coverage has been issued and delivered to the policyholder within 90 days after the date on which the coverage is provided or agreed to be provided, the coverage provided pursuant to such memorandum terminates 120 days after such date, and containing a specification in either complete or summary form of:

(i) The class or classes of employees eligible for coverage;

(ii) The benefits to be provided; and

(iii) The exceptions and reductions to such benefits, if any.

(b) An insurer providing coverage pursuant to this section shall:

(1) Within 60 days after the date on which the coverage is provided or agreed to be provided submit to the commissioner for approval a policy form drafted to provide the coverage provided by such memorandum and in a good faith attempt to meet all requirements of law;

(2) Make such revisions in the policy submitted as the commissioner may lawfully require; and

(3) Terminate such coverage in accordance with the provisions of (a) (2) above if approval of such policy is not secured within the time specified therein.

Upon written request from the insurer filed within 50 days after the date on which the coverage is provided or agreed to be provided and upon proof satisfactory to him that the insurer is acting with due diligence and that hardship will result unless an extension is granted, the commissioner may extend the time set forth in (b) (1) hereof for a period of not to exceed 30 days. Upon such extension, the insurer with the consent of the policyholder may amend the memorandum of insurance referred to in (a) (2) hereof to extend the time within which the policy must be issued and delivered to the policyholder to 30 days after the date to which the commissioner has extended the time within which a policy form must be submitted to him for approval and to extend the date for termination of coverage to 30 days thereafter.

Any policy submitted to the commissioner with a letter from the insurer stating that coverage has been provided in accordance with this section shall be automatically approved unless the commissioner disapproves the same within 30 days of the date of its submission to him.

history: (History: Added by Stats. 1953, Ch. 624.)


text:
The commissioner may suspend or revoke the permission granted any insurer in Section 10205.5 if, after notice and hearing in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, he finds that the insurer has:

(a) Misrepresented the conditional nature of the coverage;

(b) Neglected or refused either to cancel or otherwise terminate such coverage within the time required by such section;

(c) Delivered any such memorandum which did not comply with subsection (a) (2) of Section 10205.5;

(d) Shown a lack of diligence in making revisions in the policy necessary to obtain its approval by the commissioner;

(e) Failed so often in so many important respects in drafting any such policy to conform to the applicable requirements of the Insurance Code that a conclusion of lack of good faith or competency in drafting is reasonably justified;

(f) Circulated announcements of coverage to individuals insured which failed to advise them of the conditional nature of the coverage; or

(g) In any other manner so negligently or carelessly handled the effecting of insurance under Section 10205.5 or the administration thereof that the policyholder or the persons insured have been misled or exposed to the danger of loss.


text:
(a) The policy shall provide that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue; and that no statement made by any employee insured under the policy relating to his or her insurability shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during the employee’s lifetime nor unless it is contained in a written application signed by the employee.

(b) (1) Notwithstanding subdivision (a), if photographic identification is presented during the application or enrollment process, and if an impostor is substituted for a named insured in any part of the application or enrollment process, with or without the knowledge of the named insured, then no contract between the insurer and the named insured is formed, and any purported insurance contract is void from its inception.

(2) As used in this subdivision:

(A) “Application or enrollment process” means any or all of the steps required of a named insured in applying for a certificate under a group policy of life insurance, including, but not limited to, executing any part of the application or enrollment form, submitting to medical or physical examination or testing, or providing a sample or specimen of blood, urine, or other bodily substance.

(B) “Impostor” means a person other than the named insured who participates in any manner in the application or enrollment process for a certificate under a group life insurance policy and represents himself or herself to be the named insured or represents that a sample or specimen of blood, urine, or other bodily substance is that of the named insured.

(C) “Named insured” means the individual named in an application or enrollment form for a certificate under a group life insurance policy as the person whose life is to be insured.

history: (History: Amended by Stats. 1998, Ch. 184, Sec. 2. Effective January 1, 1999.)


text:
The policy may provide that the insurer is not liable, or is liable only in a reduced amount, for losses arising from conditions:

(a) Relating to war or act of war;

(b) Relating to military or naval service;

(c) Relating to aviation.

The commissioner may after notice and hearing prescribe reasonable rules and regulations relative to the use of provisions permitted by this section in respect to policies outstanding or hereafter issued.

history: (History: Added by Stats. 1943, Ch. 909.)


text:
The policy shall contain a provision that:

(a) The policy, the application of the employer and the individual applications, if any, of the employees constitute the entire contract of insurance.

(b) All statements made by the employer or by the individual employees are, in the absence of fraud, representations and not warranties.

(c) Such statements will not be used in defense to a claim under the policy, unless contained in a written application.

history: (History: Enacted by Stats. 1935, Ch. 145.)


text: The policy shall contain a provision for the equitable adjustment of the premium or the amount of insurance payable in the event of a misstatement of the age of an employee.


text:
(a) Except as provided by Sections 10203.5 and 10203.8, the policy shall contain a provision that the insurer will issue to the employer for delivery to the insured employee an individual certificate setting forth:

(1) A statement as to the insurance protection to which the employee is entitled and to whom payable.

(2) A provision that if the employment terminates for any reason whatsoever and the employee applies to the insurer within 31 days after the termination, paying the premium applicable to the class of risk to which he or she belongs and to the form and amount of the policy at his or her then attained age, he or she is entitled, without producing evidence of insurability, to the issue by the insurer of any individual life policy in any one of the forms, other than term insurance, customarily issued by the insurer.

(3) A statement that the policy in lieu of group insurance will be in an amount equal to the amount of his or her protection under the group insurance at the time of the termination.

(4) A provision that if the employee dies during the 31-day period within which he or she is entitled to have an individual policy issued to him or her in accordance with this section and before the policy shall have become effective, the amount of life insurance that the employee is entitled to have issued to him or her under the individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.

(b) If any employee insured under a group life insurance policy delivered in this state becomes entitled under the terms of the policy to have an individual policy of life insurance issued to him or her without evidence of insurability, subject to making of application and payment of the first premium within the period specified in the policy, and if the employee is not given notice of the existence of the right at least 15 days prior to the expiration date of the period, the employee shall have an additional period within which to exercise the right, but nothing in this section shall be construed to continue any insurance beyond the period provided in the policy. This additional period shall expire 25 days next after the employee is given the notice but in no event shall the additional period extend beyond 60 days next after the expiration date of the period provided in the policy. Written notice presented to the employee or mailed by the policyholder to the last-known address of the employee or mailed by the insurer to the last-known address of the employee as furnished by the policyholder shall constitute notice for the purpose of this section.

(c) Paragraphs (2) and (4) of subdivision (a), and subdivision (b), shall apply to any insurance issued pursuant to Section 10203.4 on the life of a spouse of an employee.

(d) The contract of insurance and individual certificate may contain provisions defining the extent to which the employer acts as the agent of the employee or may act as the agent of the insurer.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 469. Effective January 1, 2007.)


text:
An individual certificate shall be individualized, except that in the case of an individual certificate issued under a group policy which requires no regular contribution toward the payment of the premium to be made by the employees covered thereunder, such individual certificate need not be individualized if it is in a form setting forth a clear statement of the conditions of eligibility from which the employee can determine the circumstances under which he is insured under the master policy.

An individual certificate shall be deemed to be “individualized,” within the meaning of this section, if it contains either the name of the employee covered or some other means of identifying to the employee covered that it is his individual certificate.

history: (History: Added by Stats. 1955, Ch. 1729.)


text:
(a) Subject to the terms of the policy, or pursuant to an agreement between the insured, the group policyholder, and the insurer, any person insured under a group life insurance policy may make to any person, other than the policyholder, an assignment of all or any part of the incidents of ownership conferred on him or her by the policy or by law, including specifically, but not by way of limitation, the right to exercise the conversion privilege and the right to name a beneficiary.

The enactment of this section made at the 1969 Regular Session of the Legislature does not constitute a change in, but is declaratory of, the existing law.

(b) Notwithstanding subdivision (a), any person who has been diagnosed with a terminal illness shall have the right to make an absolute assignment for value of his or her interest in a policy or certificate of life insurance.

(c) The right of assignment in subdivision (b) shall not extend to situations in which the benefits of the policy or certificate of life insurance are used as collateral for a loan.

(d) The viatical broker shall notify the spouse of a terminally ill viator of the viatication.

history: (History: Amended by Stats. 1997, Ch. 440, Sec. 2. Effective January 1, 1998.)


text: The policy shall contain a provision that to the groups or classes originally insured there will be added from time to time all new employees of the employer eligible for insurance in such groups or classes, except that the policy may provide that if the premium is paid by the employer and employees jointly any employee who fails to request insurance during the period of eligibility following his employment as prescribed by the policy shall not be insured until he has furnished evidence of insurability satisfactory to the insurer.

history: (History: Amended by Stats. 1945, Ch. 513.)


text:
Whenever any provision of this chapter requires the payment of a premium by any person, such requirement relates to the responsibility for the payment of the premium and not to the transmission or collection of the premium or premium contributions. Such transmission or collection shall be performed by the policyholder, except where the policy specifies the persons other than the policyholder by whom such transmission or collection shall be made, and in one of the following situations:

(a) If such policy covers the employees of more than one employer, the insurer may collect premium contributions from individual employers whose employees are insured or may assist the policyholder in making such collections. If the employees of more than 100 such employers are covered under such policy, it shall state as a separate part of the premium to be charged for the policy the amount to be charged by the insurer for such collection.

(b) If the policy covers a group of governmental employees and the governmental unit paying such employees will not transmit their premium contribution after pay roll deduction, the insurer may collect from the individual employees. If more than 100 such employees are covered under such policy, it shall state as a separate part of the premium to be charged for the policy the amount to be charged by the insurer for such collection.

(c) If individual members of the group make payment of their share of the premium contribution to the insurer without billing or solicitation by the insurer during a period of temporary absence from active work of not exceeding 90 days, such payment may be received without the necessity of any separately stated charge by the insurer.


text:
Policies of group life insurance may conform to the following conditions, any other provisions of this chapter notwithstanding:

(a) When issued in this State by any foreign insurer, they may contain any provision required by the law of the State under which the insurer is organized.

(b) When issued in other States or countries by domestic insurers, they may contain any provision required by the laws of the State, or country, in which they are issued.

(c) They may contain provisions on any of the requirements set forth in sections 10205 to 10210, which, in the opinion of the commissioner, are more favorable to the employer or to the employee than the required provisions.


text: Except as provided in this chapter, in every group policy issued by a domestic life insurer, the employer is the policyholder for all purposes within the meaning of this code. If entitled to vote at meetings of the insurer, he shall be entitled to one vote.


text: If hereafter any dividend is paid or any premium refunded under any policy of group life insurance heretofore or hereafter issued, the excess, if any, of the aggregate dividends or premium refunds under such policy over the aggregate expenditures for insurance under such policy made from funds contributed by the policyholder, or by an employer of insured persons or by union or association to which such insured persons belong, including expenditures made in connection with the administration of such policy, shall be applied by the policyholder for the benefit of such insured employees generally or their dependents or insured members generally or their dependents. For the purpose of this section and at the option of the policyholder, “policy” may include all group life and disability insurance policies of the policyholder.

history: (History: Added by Stats. 1953, Ch. 1746.)


text: Any life insurer may issue policies of blanket life insurance for a term not exceeding one year with premium rates less than the usual rates for such insurance. Such policies may thereafter be renewed.

history: (History: Added by Stats. 1957, Ch. 367.)

chapter: 2.5. Blanket Life Insurance

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 2.5. Blanket Life Insurance


text: The only forms of blanket life insurance are those set forth in this chapter.


text:
Life insurance conforming to all the following conditions is one form of blanket life insurance:

(a) Written under a policy issued to a newspaper, farm paper, magazine, or other periodical publication;

(b) Insuring independent contractors, such as newspaperboys, dealers, distributors, wholesalers, or other personnel, engaged in the sale, distribution, collecting for, or other activities pertaining to the marketing and delivery of publications referred to in subdivision (a), including attending coaching school or while participating in a trip organized, supervised, and sponsored as a reward for meritorious service, for amounts of insurance based upon a plan precluding individual selection;

(c) For the benefit of persons other than the policyholder;

(d) Where the premium is remitted by the policyholder;

(e) Insuring persons without any requirement for individual enrollment and without individual commitment or undertaking to pay, and with either the policyholder or the insured to pay all the premium or part of the premium as a condition precedent to coverage.

Nothing in this section shall be construed to prohibit the cost of the insurance coverage being borne by the individuals insured or by their parents or guardians. When the premium for the insurance is paid by the person insured, he may, upon request, obtain from the insurer in certificate form a copy of the policy.

Coverage shall not be provided to any person who files with the entity to whom the blanket policy is to be issued, for delivery to the insurer, a written statement requesting that he not be covered. In the case of a minor, such statement may be filed by his parent or guardian. If the number of persons filing such statements exceeds ten percent (10%) of the number of persons within categories defined as covered under the policy, it shall not be put into effect, and if in effect shall not be renewed.


text:
A blanket life insurance policy may provide that the insurer is not liable, or is liable only in a reduced amount, for losses arising from conditions:

(a) Relating to war or acts of war;

(b) Relating to military or naval service;

(c) Relating to aviation.

After notice and hearing the commissioner may prescribe reasonable rules and regulations relative to the use of provisions permitted by this section in respect to policies outstanding or hereafter issued.


text:
Policies of blanket life insurance may conform to the following conditions, any other provisions of this chapter notwithstanding:

(a) When issued in this State by any foreign insurer, such policies may contain any provision required by the law of the state under which the insurer is organized.

(b) When issued in other states or countries by domestic insurers, such policies may contain any provision required by the laws of the state, or country, in which they are issued.


text: A policy of blanket insurance shall not be delivered or issued for delivery in this State until a copy of the form of the policy is filed with and approved by the commissioner.


text: Unless the context requires otherwise, the definitions in this article shall govern the construction of this chapter.

history: (History: Added by Stats. 1988, Ch. 1342, Sec. 1.)

chapter: 2.6. Long-Term Care Insurance

article: 1. Definitions

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 2.6. Long-Term Care Insurance > 1. Definitions


text:
“Long-term care insurance” includes any insurance policy, certificate, or rider advertised, marketed, offered, solicited, or designed to provide coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital. Long-term care insurance includes all products containing any of the following benefit types: coverage for institutional care including care in a nursing home, convalescent facility, extended care facility, custodial care facility, skilled nursing facility, or personal care home; home care coverage including home health care, personal care, homemaker services, hospice, or respite care; or community-based coverage including adult day care, hospice, or respite care. Long-term care insurance includes disability based long-term care policies but does not include insurance designed primarily to provide Medicare supplement or major medical expense coverage.

Long-term care policies, certificates, and riders shall be regulated under this chapter. The commissioner shall review and approve individual and group policies, certificates, riders, and outlines of coverage. Other applicable laws and regulations shall also apply to long-term care insurance insofar as they do not conflict with the provisions in this chapter. Long-term care benefits designed to provide coverage of 12 months or more that are contained in or amended to Medicare supplement or other disability policies and certificates shall be regulated under this chapter.

history: (History: Amended by Stats. 2001, Ch. 159, Sec. 147. Effective January 1, 2002.)

article: 1. Definitions


text:
(a) For the purposes of this section, the following definitions apply:

(1) An “alternate plan of care” means a plan of care that includes a specification of long-term care services, providers, or places of care that are not specifically defined as covered services, providers, or places of care under the policy. The alternate plan of care shall be developed by a licensed health care practitioner, describe the insured’s needs, and specify the type, frequency, and providers of all formal and informal long-term care services that are required by the insured and the cost, if any. The services, providers, and places of care specified in an alternate plan of care shall include those that are specifically defined as covered services, providers, and places under the policy, as well as those that are not specifically defined as covered services, providers, and places under the policy.

(2) An “alternate-plan-of-care provision” means a provision in a policy, rider, endorsement, or amendment that allows benefits for services, providers, and places of care that are specified in an alternate plan of care.

(3) “Licensed health care practitioner” means a physician, registered nurse, licensed social worker, or other individual whom the United States Secretary of the Treasury may prescribe by regulation.

(4) “Plan of care” means a written description of the insured’s needs and a specification of the type, frequency, and providers of all formal and informal long-term care services required by the insured and the cost, if any.

(b) An alternate-plan-of-care provision shall provide for all of the following:

(1) An alternate plan of care may be proposed by the insured or the insurer. Adoption, amendment, or replacement of an alternate plan of care shall be agreed to by the insured, the insurer, and a licensed health care practitioner that is independent of the insurer. Consent or agreement to an alternate plan of care shall be free and mutual.

(2) The maximum benefit available under the contract shall not change based on an insured utilizing an alternate plan of care, but that benefit will be reduced by the amount of any benefits paid under an alternate plan of care.

(3) Policy benefits are payable for all services, providers, and places of care that are specified in an alternate plan of care. Coverage for services, providers, and places of care under an alternate plan of care shall be in addition to, not in lieu of, coverage for services, providers, and places of care that are specifically defined as covered services under the policy.

(4) If adopted, an alternate plan of care replaces any existing plan of care, including any previously adopted alternate plan of care. No benefits are payable for services provided pursuant to a plan of care after it is replaced by an alternate plan of care.

(5) An alternate plan of care can be replaced by a new plan of care at any time.

(A) If the new plan of care is not an alternate plan of care, the new plan of care does not need to be adopted in the manner described in paragraph (1) of this subdivision.

(B) If the new plan of care is a new or amended alternate plan of care, the new or amended alternate plan of care shall be adopted in the manner described in paragraph (1) of this subdivision.

(C) No benefits are payable for services provided pursuant to an alternate plan of care after it is replaced by a new plan of care.

(c) Nothing in this section shall be construed to require an insurer to include a provision authorizing an alternate plan of care. However, an insurer and an insured may agree to use an alternate plan of care even if there is no provision in the policy that specifically authorizes one. Nothing in this section is intended to obligate either party to negotiate an alternate plan of care. If an insurer does not accept an extra-contractual request for an alternate plan of care, the rejection is not a denial of a claim.

(d) This section shall apply to policies issued on or after January 1, 2017.

history: (History: Amended by Stats. 2018, Ch. 98, Sec. 1. (AB 2180) Effective January 1, 2019.)

article: 1. Definitions


text:
“Applicant” means either of the following:

(a) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits.

(b) In the case of a group long-term care insurance policy, the proposed certificate holder.

article: 1. Definitions


text: “Certificate” means any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this state.

article: 1. Definitions


text:
“Group long-term care insurance” means a long-term care insurance policy which is delivered or issued for delivery in this state and issued to any of the following:

(a) One or more employers or labor organizations, or a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof or for members or former members or a combination thereof, of the labor organization.

(b) Any professional, trade, or occupational association for its members or former or retired members, or combination thereof, if that association meets both of the following:

(1) Is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation.

(2) Has been maintained in good faith for purposes other than obtaining insurance.

(c) An association or a trust or the trustees of a fund established, created, or maintained for the benefit of members of one or more associations. Prior to advertising, marketing, or offering that policy or a certificate within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the commissioner that the association or associations have at the outset a minimum of 100 persons and have been organized and maintained in good faith for a primary purpose other than that of obtaining insurance, have been in active existence for at least one year, have a constitution and bylaws which provide all of the following, and provide evidence that the following have been consistently implemented:

(1) The association or associations hold regular meetings, not less than annually, to further purposes of the members.

(2) Except for credit unions, the association or associations collect dues or solicit contributions from members.

(3) The members have voting privileges and representation on the governing board and committees.

Thirty days after that filing the association or associations shall be deemed to satisfy these organizational requirements, unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements.

(d) A group other than as described in subdivisions (a), (b), and (c), subject to all of the following findings by the commissioner:

(1) The issuance of the group policy or certificate is not contrary to the best interest of the public.

(2) The issuance of the group policy will result in economies of acquisition or administration.

(3) The benefits are reasonable in relation to the premiums charged.

(4) The use of the true or fictitious name of the group, group master policyholder, group policy, certificate, or any trust or other entity created or used for the marketing of the group policy or certificates is not deceptive or misleading with regard to the status, character, or proprietary or representative capacity of the insurer, group, trust, or other entity.

(5) The group’s main revenue source is not related to the marketing of insurance.

(6) The group’s outreach method to obtain new members is not related to the solicitation of insurance.

(7) The group provides benefits or services, other than insurance, of significant value to its members. The commissioner shall investigate the percentage of members using the other services and the monetary value of those services.

(e) A life care contract provider which has received a certificate of authority in accordance with Chapter 10 (commencing with Section 1770) of Division 2 of the Health and Safety Code. Any life care contract provider which has not received the certificate of authority from the State Department of Social Services shall be subject to this chapter.

history: (History: Amended by Stats. 1992, Ch. 1132, Sec. 5. Effective January 1, 1993.)

article: 1. Definitions


text: “Policy” means any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in this state by an insurer, fraternal benefit society, nonprofit hospital service plan, or any similar organization, regulated by the commissioner.

article: 1. Definitions


text:
(a) No group long-term care insurance coverage may be offered or sold to a resident of this state under a group policy issued in another state to a group described in subdivision (d) of Section 10231.6, unless the commissioner has determined that the requirements imposed by subdivision (d) of Section 10231.6 have been met. At least 30 days in advance of advertising, marketing, or offering coverage within this state, an insurer issuing a policy to a group described in subdivision (d) of Section 10231.6 shall accomplish an informational filing with the commissioner which consists of the following materials:

(1) A specimen master policy and certificate.

(2) The corresponding outline of coverage.

(3) Representative advertising materials to be used in this state.

(4) At the option of the insurer, any other documentation which the insurer believes will provide information sufficient to allow the commissioner to determine that the requirements of subdivision (d) of Section 10231.6 have been met or which establishes that the insurance regulatory authority of another state has made a determination that the requirements have been met, or both.

(b) No group long-term care insurance coverage may be offered or sold to a resident of this state under a group policy issued in another state to a group described in subdivision (c) of Section 10231.6, unless, prior to advertising, marketing, or offering that coverage within this state, the association or associations, or the insurer of the association or associations, files evidence with the commissioner that the association or associations have at the outset a minimum of 100 persons, have been organized and maintained in good faith for a primary purpose other than that of obtaining insurance, have been in active existence for at least one year, have a constitution and bylaws which provide all of the following, and provide evidence that the following have been consistently implemented:

(1) The association or associations hold regular meetings, not less than annually, to further purposes of the members.

(2) Except for credit unions, the association or associations collect dues or solicit contributions from members.

(3) The members have voting privileges and representation on the governing board and committees.

Thirty days after that filing, the association or associations shall be deemed to satisfy those organizational requirements, unless the commissioner makes the finding that the association or associations do not satisfy those organizational requirements.

The association or associations, or the insurer of the association or associations, shall accompany this organizational filing with an informational filing which consists of the following materials:

(1) A specimen master policy and certificate.

(2) The corresponding outline of coverage.

(3) Representative advertising materials to be used in this state.

(c) Compliance with the informational filings required to be made by this section shall also constitute compliance with the filing requirements of Section 10233.9.

(d) The materials required to be filed with the commissioner by this section shall be filed with the commissioner for informational purposes only, and not for approval purposes.

history: (History: Amended by Stats. 1992, Ch. 1132, Sec. 6. Effective January 1, 1993.)

article: 3. General Provisions

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 2.6. Long-Term Care Insurance > 3. General Provisions


text:
(a) Every policy that is intended to be a qualified long-term care insurance contract as provided by Public Law 104-191 shall be identified as such by prominently displaying and printing on page one of the policy form and the outline of coverage and in the application the following words: “This contract for long-term care insurance is intended to be a federally qualified long-term care insurance contract and may qualify you for federal and state tax benefits.” Every policy that is not intended to be a qualified long-term care insurance contract as provided by Public Law 104-191 shall be identified as such by prominently displaying and printing on page one of the policy form and the outline of coverage and in the application the following words: “This contract for long-term care insurance is not intended to be a federally qualified long-term care insurance contract.”

(b) Any policy or certificate in which benefits are limited to the provision of institutional care shall be called a “nursing facility and residential care facility only” policy or certificate and the words “Nursing Facility and Residential Care Facility Only” shall be prominently displayed on page one of the form and the outline of coverage. The commissioner may approve alternative wording if it is more descriptive of the benefits.

(c) Any policy or certificate in which benefits are limited to the provision of home care services, including community-based services, shall be called a “home care only” policy or certificate and the words “Home Care Only” shall be prominently displayed on page one of the form and the outline of coverage. The commissioner may approve alternative wording if it is more descriptive of the benefits.

(d) Any policy, certificate, or rider in which benefits are limited to the provision of all care settings, except nursing facility care, and that is offered under the California Partnership for Long-Term Care Program established by Section 22000 of the Welfare and Institutions Code shall be called a home care, community-based services, and residential care facility only policy, certificate, or rider and the words “Home Care, Community-Based Services, and Residential Care Facility Only” shall be prominently displayed on the first page of the form and the outline of coverage. The commissioner may approve an alternative version of those words if the alternative version is more descriptive of the benefits provided.

(e) Only those policies or certificates providing benefits for both institutional care and home care may be called “comprehensive long-term care” insurance.

history: (History: Amended by Stats. 2018, Ch. 565, Sec. 1. (SB 1248) Effective January 1, 2019.)

article: 3. General Provisions


text:
(a) Every insurer that offers policies or certificates that are intended to be federally qualified long-term care insurance contracts, including riders to life insurance policies providing long-term care coverage, shall fairly and affirmatively concurrently file, offer, and market long-term care insurance policies or certificates not intended to be federally qualified, as described in subdivision (a) of Section 10232.1.

(b) All long-term care insurance contracts, including riders to life insurance contracts providing long-term care coverage, approved after the effective date of this section shall meet all of the requirements of this chapter.

(c) Until October 1, 2001, or 90 days after approval of contracts submitted for approval pursuant to subdivision (b), whichever comes first, insurers may continue to offer and market previously approved long-term care insurance contracts.

(d) Group policies issued prior to January 1, 1997, shall be allowed to remain in force and not be required to meet the requirements of this chapter, as amended during the 1997 portion of the 1997–98 Regular Session, unless those policies cease to be treated as federally qualified long-term care insurance contracts. If a policy or certificate issued on a group policy of that type ceases to be a federally qualified long-term care insurance contract under the grandfather rules issued by the United States Department of the Treasury pursuant to Section 7702B(f) of the Internal Revenue Code, the insurer shall offer the policy and certificate holders the option to convert, on a guaranteed-issue basis, to a policy or certificate that is federally tax qualified if the insurer sells tax-qualified policies.

(e) It is the intent of the Legislature that the commissioner approve by July 1, 2001, all accurate and complete contracts submitted for approval pursuant to subdivision (b). It is the further intent of the Legislature that insurers submit contracts for approval and resolve further outstanding issues pursuant to subdivision (b) in a timely manner in order for the commissioner to approve the contracts by July 1, 2001.

history: (History: Amended (as amended by Stats. 1999, Ch. 947) by Stats. 2001, Ch. 51, Sec. 3. Effective July 9, 2001.)

article: 3. General Provisions


text:
(a) All applications for long-term care insurance except that which is guaranteed issue, shall contain clear, unambiguous, short, simple questions designed to ascertain the health condition of the applicant. Each health-related question shall contain only one health status inquiry and shall require only a “yes” or “no” answer, except that the application may include a request for the name of any prescribed medication and the name of a prescribing physician. If the application requests the name of any prescribed medication or prescribing physician, then any mistake or omission shall not be used as a basis for the denial of a claim or the rescission of a policy or certificate.

(b) The following warning shall be printed conspicuously and in close conjunction with the applicant’s signature block:

“Caution: If your answers on this application are misstated or untrue, the insurer may have the right to deny benefits or rescind your coverage.”

(c) Every application for long-term care insurance shall include a checklist that enumerates each of the specific documents that this chapter requires be given to the applicant at the time of solicitation. The documents and notices to be listed in the checklist include, but are not limited to, the following:

(1) The outline of coverage pursuant to Section 10233.5.

(2) The HICAP notice pursuant to paragraph (8) of subdivision (a) of Section 10234.93.

(3) The long-term care insurance shoppers guide pursuant to paragraph (9) of subdivision (a) of Section 10234.93.

(4) The “Long-Term Care Insurance Personal Worksheet” pursuant to subdivision (c) of Section 10234.95.

(5) The “Notice to Applicant Regarding Replacement of Accident and Sickness or Long-Term Care Insurance” pursuant to Section 10235.16 if replacement is not made by direct response solicitation or Section 10235.18 if replacement is made by direct response solicitation. Unless the solicitation was made by a direct response method, the agent and applicant shall both sign at the bottom of the checklist to indicate the required documents were delivered and received.

(d) If an insurer does not complete medical underwriting and resolve all reasonable questions arising from information submitted on or with an application before issuing the policy or certificate, then the insurer may only rescind the policy or certificate or deny an otherwise valid claim, upon clear and convincing evidence of fraud or material misrepresentation of the risk by the applicant. The evidence shall:

(1) Pertain to the condition for which benefits are sought.

(2) Involve a chronic condition or involve dates of treatment before the date of application.

(3) Be material to the acceptance for coverage.

(e) No long-term care policy or certificate may be field issued.

(f) The contestability period as defined in Section 10350.2 for long-term care insurance shall be two years.

(g) A copy of the completed application shall be delivered to the insured at the time of delivery of the policy or certificate.

(h) Every insurer shall maintain a record, in accordance with Section 10508, of all policy or certificate rescissions, both state and countrywide, and shall annually furnish this information to the commissioner, which shall include the reason for rescission, the length of time the policy or certificate was in force, and the age and gender of the insured person, in a format prescribed by the commissioner.

(i) The commissioner may, in his or her discretion, make public the aggregate data collected under subdivision (h), upon request.

history: (History: Amended by Stats. 2018, Ch. 98, Sec. 2. (AB 2180) Effective January 1, 2019.)

article: 3. General Provisions


text:
(a) No long-term care insurance policy or certificate other than a group policy or certificate, as described in subdivision (a) of Section 10231.6, shall use a definition of preexisting condition which is more restrictive than a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person.

(b) Every long-term care insurance policy or certificate shall cover preexisting conditions that are disclosed on the application no later than six months following the effective date of the coverage of an insured, regardless of the date the loss or confinement begins.

(c) The definition of preexisting condition does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and on the basis of the answers on that application, from underwriting in accordance with that insurer’s established underwriting standards. Unless otherwise provided in the policy or certificate a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subdivision (b) expires. Unless a waiver or rider has been specifically approved by the commissioner, no long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subdivision (b).

history: (History: Amended by Stats. 1999, Ch. 947, Sec. 4. Effective January 1, 2000.)

article: 3. General Provisions


text:
On or after January 1, 1990, no long-term care insurance policy may be delivered or issued for delivery in this state which does any of the following:

(a) Preconditions the availability of benefits on prior hospitalization.

(b) Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care.

(c) Preconditions the availability of benefits for community-based care, home health care, or home care on prior institutionalization.

(d) Conditions eligibility for noninstitutional benefits, other than those in subdivision (c), on a prior institutional stay of more than 30 days.

history: (History: Repealed and added by Stats. 1989, Ch. 1273, Sec. 4.2.)

article: 3. General Provisions


text: The commissioner may adopt regulations establishing loss ratio standards for long-term care insurance policies provided that a specific reference to long-term care insurance policies is contained in the regulation. Any regulations adopted by the commissioner shall substantially reflect the loss ratio standards contained in Section 10 of the National Association of Insurance Commissioners Long-Term Care Insurance Model Regulations, as most recently revised.

article: 3. General Provisions


text:
(a) An applicant for a long-term care insurance policy or a certificate, other than an applicant for a certificate issued under a group long-term care insurance policy issued to a group as described in subdivisions (a) and (b) of Section 10231.6, shall have the right to return the policy or certificate by first-class United States mail within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason.

(b) The return of a policy or certificate shall void the policy or certificate from the beginning and the parties shall be in the same position as if no policy, certificate, or contract had been issued. All premiums paid and any policy fee paid for the policy shall be fully refunded directly to the applicant by the insurer within 30 days after the policy or certificate is returned.

(c) Notwithstanding Section 10276 or any other law, long-term care insurance policies or certificates to which this section applies shall have a notice prominently printed on the first page of the policy or certificate, or attached thereto, stating in substance the conditions described in subdivisions (a) and (b).

history: (History: Amended by Stats. 1989, Ch. 1273, Sec. 5.)

article: 3. General Provisions


text:
(a) In every long-term care policy or certificate that is not intended to be a federally qualified long-term care insurance contract and provides home care benefits, the threshold establishing eligibility for home care benefits shall be at least as permissive as a provision that the insured will qualify if either one of two criteria are met:

(1) Impairment in two out of seven activities of daily living.

(2) Impairment of cognitive ability.

The policy or certificate may provide for lesser but not greater eligibility criteria. The commissioner, at his or her discretion, may approve other criteria or combinations of criteria to be substituted, if the insurer demonstrates that the interest of the insured is better served.

“Activities of daily living” in every policy or certificate that is not intended to be a federally qualified long-term care insurance contract and provides home care benefits shall include eating, bathing, dressing, ambulating, transferring, toileting, and continence; “impairment” means that the insured needs human assistance, or needs continual substantial supervision; and “impairment of cognitive ability” means deterioration or loss of intellectual capacity due to organic mental disease, including Alzheimer’s disease or related illnesses, that requires continual supervision to protect oneself or others.

(b) In every long-term care policy approved or certificate issued after the effective date of the act adding this section, that is intended to be a federally qualified long-term care insurance contract as described in subdivision (a) of Section 10232.1, the threshold establishing eligibility for home care benefits shall provide that a chronically ill insured will qualify if either one of two criteria are met or if a third criterion, as provided by this subdivision, is met:

(1) Impairment in two out of six activities of daily living.

(2) Impairment of cognitive ability.

Other criteria shall be used in establishing eligibility for benefits if federal law or regulations allow other types of disability to be used applicable to eligibility for benefits under a long-term care insurance policy. If federal law or regulations allow other types of disability to be used, the commissioner shall promulgate emergency regulations to add those other criteria as a third threshold to establish eligibility for benefits. Insurers shall submit policies for approval within 60 days of the effective date of the regulations. With respect to policies previously approved, the department is authorized to review only the changes made to the policy. All new policies approved and certificates issued after the effective date of the regulation shall include the third criterion. A policy shall not be sold unless the policy includes the third criterion after one year beyond the effective date of the regulations. An insured meeting this third criterion shall be eligible for benefits regardless of whether the individual meets the impairment requirements in paragraph (1) or (2) regarding activities of daily living and cognitive ability.

(c) A licensed health care practitioner, independent of the insurer, shall certify that the insured meets the definition of “chronically ill individual” as defined under Public Law 104-191. For the purposes of long-term care insurance as defined in Section 10231.2, an insurer shall not impose a certification requirement of longer than 90 days. The policy or certificate shall explain paragraphs (1) through (5) and comply with all of the following:

(1) An insured has the option of submitting a certification to the insurer or submitting a notice of claim and requesting that the insurer conduct the assessment. If the insured requests that the insurer conduct the assessment, the insurer shall provide an independent licensed health care practitioner to conduct the assessment. If a health care practitioner makes a determination, pursuant to this section, that an insured does not meet the definition of “chronically ill individual,” the insurer shall notify the insured that the insured shall be entitled to a second assessment by a licensed health care practitioner, upon request, who shall personally examine the insured. The requirement for a second assessment shall not apply if the initial assessment was performed by a practitioner who otherwise meets the requirements of this section and who personally examined the insured.

(2) The assessments conducted pursuant to this section shall be performed promptly with the certification completed as quickly as possible to ensure that an insured’s benefits are not delayed. The written certification shall be renewed every 12 months.

(3) A licensed health care practitioner shall develop a written plan of care after personally examining the insured.

(4) The costs to have a licensed health care practitioner certify that an insured meets, or continues to meet, the definition of “chronically ill individual,” or to prepare written plans of care shall not count against the lifetime maximum of the policy or certificate.

(5) In order to be considered “independent of the insurer,” a licensed health care practitioner shall not be an employee of the insurer and shall not be compensated in any manner that is linked to the outcome of the certification.

(6) It is the intent of this subdivision that the practitioner’s assessments be unhindered by financial considerations.

(7) This subdivision shall apply only to a policy or certificate intended to be a federally qualified long-term care insurance contract.

(d) “Activities of daily living” in every policy or certificate intended to be a federally qualified long-term care insurance contract as provided by Public Law 104-191 shall include eating, bathing, dressing, transferring, toileting, and continence; “impairment in activities of daily living” means the insured needs “substantial assistance” either in the form of “hands-on assistance” or “standby assistance,” due to a loss of functional capacity to perform the activity; “impairment of cognitive ability” means the insured needs substantial supervision due to severe cognitive impairment; “licensed health care practitioner” means a physician, registered nurse, licensed social worker, or other individual whom the United States Secretary of the Treasury may prescribe by regulation; and “plan of care” means a written description of the insured’s needs and a specification of the type, frequency, and providers of all formal and informal long-term care services required by the insured, and the cost, if any.

(e) Until the time that these definitions may be superseded by federal law or regulation, the terms “substantial assistance,” “hands-on assistance,” “standby assistance,” “severe cognitive impairment,” and “substantial supervision” shall be defined according to the safe-harbor definitions contained in Internal Revenue Service Notice 97-31, issued May 6, 1997.

(f) The definitions of “activities of daily living” to be used in policies and certificates that are intended to be federally qualified long-term care insurance shall be the following until the time that these definitions may be superseded by federal law or regulations:

(1) Eating, which shall mean feeding oneself by getting food in the body from a receptacle (such as a plate, cup, or table) or by a feeding tube or intravenously.

(2) Bathing, which shall mean washing oneself by sponge bath or in either a tub or shower, including the act of getting into or out of a tub or shower.

(3) Continence, which shall mean the ability to maintain control of bowel and bladder function; or when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for a catheter or colostomy bag).

(4) Dressing, which shall mean putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs.

(5) Toileting, which shall mean getting to and from the toilet, getting on or off the toilet, and performing associated personal hygiene.

(6) Transferring, which shall mean the ability to move into or out of bed, a chair, or wheelchair.

The commissioner may approve the use of definitions of “activities of daily living” that differ from the verbatim definitions of this subdivision if these definitions would result in more policy or certificate holders qualifying for long-term care benefits than would occur by the use of the verbatim definitions of this subdivision. In addition, the following definitions may be used without the approval of the commissioner: (1) the verbatim definitions of eating, bathing, dressing, toileting, transferring, and continence in subdivision (g); or (2) the verbatim definitions of eating, bathing, dressing, toileting, and continence in this subdivision and a substitute, verbatim definition of “transferring” as follows: “transferring,” which shall mean the ability to move into and out of a bed, a chair, or wheelchair, or ability to walk or move around inside or outside the home, regardless of the use of a cane, crutches, or braces.

The definitions to be used in policies and certificates for impairment in activities of daily living, “impairment in cognitive ability,” and any third eligibility criterion adopted by regulation pursuant to subdivision (b) shall be the verbatim definitions of these benefit eligibility triggers allowed by federal regulations. In addition to the verbatim definitions, the commissioner may approve additional descriptive language to be added to the definitions, if the additional language is (1) warranted based on federal or state laws, federal or state regulations, or other relevant federal decision, and (2) strictly limited to that language that is necessary to ensure that the definitions required by this section are not misleading to the insured.

(g) The definitions of “activities of daily living” to be used verbatim in policies and certificates that are not intended to qualify for favorable tax treatment under Public Law 104-191 shall be the following:

(1) Eating, which shall mean reaching for, picking up, and grasping a utensil and cup; getting food on a utensil, and bringing food, utensil, and cup to mouth; manipulating food on plate; and cleaning face and hands as necessary following meals.

(2) Bathing, which shall mean cleaning the body using a tub, shower, or sponge bath, including getting a basin of water, managing faucets, getting in and out of tub or shower, and reaching head and body parts for soaping, rinsing, and drying.

(3) Dressing, which shall mean putting on, taking off, fastening, and unfastening garments and undergarments and special devices such as back or leg braces, corsets, elastic stockings or garments, and artificial limbs or splints.

(4) Toileting, which shall mean getting on and off a toilet or commode and emptying a commode, managing clothing and wiping and cleaning the body after toileting, and using and emptying a bedpan and urinal.

(5) Transferring, which shall mean moving from one sitting or lying position to another sitting or lying position; for example, from bed to or from a wheelchair or sofa, coming to a standing position, or repositioning to promote circulation and prevent skin breakdown.

(6) Continence, which shall mean the ability to control bowel and bladder as well as use ostomy or catheter receptacles, and apply diapers and disposable barrier pads.

(7) Ambulating, which shall mean walking or moving around inside or outside the home regardless of the use of a cane, crutches, or braces.

history: (History: Amended by Stats. 2018, Ch. 98, Sec. 3. (AB 2180) Effective January 1, 2019.)

article: 3. General Provisions


text:
(a) Every long-term care policy or certificate that purports to provide benefits of home care or community-based services, shall provide at least the following:

(1) Home health care.

(2) Adult day care.

(3) Personal care.

(4) Homemaker services.

(5) Hospice services.

(6) Respite care.

(b) For purposes of this section, policy definitions of these benefits may be no more restrictive than the following:

(1) “Home health care” is skilled nursing or other professional services in the residence, including, but not limited to, part-time and intermittent skilled nursing services, home health aid services, physical therapy, occupational therapy, or speech therapy and audiology services, and medical social services by a social worker.

(2) “Adult day care” is medical or nonmedical care on a less than 24-hour basis, provided in a licensed facility outside the residence, for persons in need of personal services, supervision, protection, or assistance in sustaining daily needs, including eating, bathing, dressing, ambulating, transferring, toileting, and taking medications.

(3) “Personal care” is assistance with the activities of daily living, including the instrumental activities of daily living, provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction. “Instrumental activities of daily living” include using the telephone, managing medications, moving about outside, shopping for essentials, preparing meals, laundry, and light housekeeping.

(4) “Homemaker services” is assistance with activities necessary to or consistent with the insured’s ability to remain in his or her residence, that is provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction.

(5) “Hospice services” are outpatient services not paid by Medicare, that are designed to provide palliative care, alleviate the physical, emotional, social, and spiritual discomforts of an individual who is experiencing the last phases of life due to the existence of a terminal disease, and to provide supportive care to the primary care giver and the family. Care may be provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction.

(6) “Respite care” is short-term care provided in an institution, in the home, or in a community-based program, that is designed to relieve a primary care giver in the home. This is a separate benefit with its own conditions for eligibility and maximum benefit levels.

(c) Home care benefits shall not be limited or excluded by any of the following:

(1) Requiring a need for care in a nursing home if home care services are not provided.

(2) Requiring that skilled nursing or therapeutic services be used before or with unskilled services.

(3) Requiring the existence of an acute condition.

(4) Limiting benefits to services provided by Medicare-certified providers or agencies.

(5) Limiting benefits to those provided by licensed or skilled personnel when other providers could provide the service, except where prior certification or licensure is required by state law.

(6) Defining an eligible provider in a manner that is more restrictive than that used to license that provider by the state where the service is provided.

(7) Requiring “medical necessity” or similar standard as a criteria for benefits.

(d) Every comprehensive long-term care policy or certificate that provides for both institutional care and home care and that sets a daily, weekly, or monthly benefit payment maximum, shall pay a maximum benefit payment for home care that is at least 50 percent of the maximum benefit payment for institutional care, and in no event shall home care benefits be paid at a rate less than fifty dollars ($50) per day. Insurance products approved for residents in continuing care retirement communities are exempt from this provision.

Every such comprehensive long-term care policy or certificate that sets a durational maximum for institutional care, limiting the length of time that benefits may be received during the life of the policy or certificate, shall allow a similar durational maximum for home care that is at least one-half of the length of time allowed for institutional care.

history: (History: Added by renumbering Section 10232.8 by Stats. 1997, Ch. 699, Sec. 4. Effective October 6, 1997.)

article: 3. General Provisions


text:
In addition to any other requirements of law, the following shall apply to a long-term care insurance policy:

(a) The insurer shall not require an amount greater than one month’s premium to be submitted with an application for the policy of insurance if interim coverage is not provided. If interim coverage is provided, the insurer shall not require an amount greater than two months’ premium for that purpose. No further premiums may be collected until the policy is delivered to the applicant.

(b) The insurer shall notify the applicant within 60 days from the date the insurer or insurer’s authorized representative or producer receives the application and the amount as to whether or not the applicant will be issued a policy of insurance. If the applicant is not so notified, the insurer or insurer’s authorized representative or producer shall pay interest to the applicant on the funds that the applicant submitted with the application, at the legal rate of interest on judgments as provided in Section 685.010 of the Code of Civil Procedure, from the date the insurer or insurer’s authorized representative or producer received those funds until they are refunded to the applicant or are applied toward the premium.

history: (History: Added by Stats. 2001, Ch. 328, Sec. 5. Effective January 1, 2002.)

article: 3. General Provisions


text:
Every long-term care policy, certificate, or rider that purports to provide benefits of home care, community-based services, and residential care facility services under the California Partnership for Long-Term Care Program established by Section 22000 of the Welfare and Institutions Code shall provide at least the following:

(a) Care in a residential care facility.

(b) Home health care.

(c) Adult day care.

(d) Personal care.

(e) Homemaker services.

(f) Hospice services.

(g) Respite care.

history: (History: Amended by Stats. 2018, Ch. 565, Sec. 2. (SB 1248) Effective January 1, 2019.)

article: 3. General Provisions


text:
Every long-term care policy or certificate covering confinement in a nursing facility shall also include a provision with the following features:

(a) Care in a residential care facility must be covered. “Residential care facility” means a facility licensed as a residential care facility for the elderly or a residential care facility as defined in the Health and Safety Code. Outside California, eligible providers are facilities that meet applicable licensure standards, if any, and are engaged primarily in providing ongoing care and related services sufficient to support needs resulting from impairment in activities of daily living or impairment in cognitive ability and which also provide care and services on a 24-hour basis, have a trained and ready-to-respond employee on duty in the facility at all times to provide care and services, provide three meals a day and accommodate special dietary needs, have agreements to ensure that residents receive the medical care services of a physician or nurse in case of emergency, and, have appropriate methods and procedures to provide necessary assistance to residents in the management of prescribed medications.

(b) The benefit amount payable for care in a residential care facility shall be no less than 70 percent of the benefit amount payable for institutional confinement.

(c) All expenses incurred by the insured while confined in a residential care facility, for long-term care services that are necessary diagnostic, preventative, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, needed to assist the insured with the disabling conditions that cause the insured to be a chronically ill individual as authorized by Public Law 104-191 and regulations adopted pursuant thereto, shall be covered and payable, up to but not to exceed the maximum daily residential care facility benefit of the policy or certificate. There shall be no restriction on who may provide the service or the requirement that services be provided by the residential care facility, as long as the expenses are incurred while the insured is confined in a residential care facility, the reimbursement does not exceed the maximum daily residential care facility benefit of the policy or certificate, and the services do not conflict with federal law or regulation for purposes of qualifying for favorable tax consideration provided by Public Law 104-191.

(d) In policies or certificates that are not intended to be federally qualified, the threshold establishing eligibility for care in a residential care facility shall be no more restrictive than that for home care benefits, as defined in subdivision (a) of Section 10232.8, and the definitions of impairment in activities of daily living and impairment of cognitive ability shall be the same as for home care benefits, as defined in subdivisions (a) and (g) of Section 10232.8. In policies or certificates that are intended to be federally qualified, the threshold establishing eligibility for care in a residential care facility shall be no more restrictive than that for home care benefits, as defined in subdivision (b) of Section 10232.8, and the definitions of impairment in activities of daily living and impairment in cognitive ability shall be the same as those for home care benefits as defined in subdivisions (b), (c), (d), (e), and (f) of Section 10232.8.

history: (History: Repealed and added by Stats. 1999, Ch. 947, Sec. 6. Effective January 1, 2000.)

article: 3. General Provisions


text: Every long-term care policy or certificate shall define the maximum lifetime benefit as a single dollar amount that may be used interchangeably for any home- and community-based services defined in Section 10232.9, assisted living benefit defined in Section 10232.92, or institutional care covered by the policy or certificate. There shall be no limit on any specific covered benefit except for a daily, weekly, or monthly limit set for home- and community-based care and for assisted living care, and for the limits for institutional care. Nothing in this section shall be construed as prohibiting limitations for reimbursement of actual expenses and incurred expenses up to daily, weekly, and monthly limits.

history: (History: Added by Stats. 1997, Ch. 699, Sec. 6. Effective October 6, 1997.)

article: 3. General Provisions


text: Every long-term care policy or certificate that provides reimbursement for care in a nursing facility shall cover and reimburse for per diem expenses, as well as the costs of ancillary supplies and services, up to but not to exceed the maximum lifetime daily facility benefit of the policy or certificate.

history: (History: Added by Stats. 1997, Ch. 699, Sec. 6.3. Effective October 6, 1997.)

article: 3. General Provisions


text: When a policy or certificate holder of an insurance contract issued prior to December 31, 1996, requests a material modification to the contract as defined by federal law or regulations, the insurer, prior to approving such a request, shall provide written notice to the policy or certificate holder that the contract change requested may constitute a material modification that jeopardizes the federal tax status of the contract and appropriate tax advice should therefore be sought.

history: (History: Added by Stats. 1997, Ch. 699, Sec. 6.5. Effective October 6, 1997.)

article: 3. General Provisions


text:
In every long-term care policy or certificate that covers care in a nursing facility, the threshold establishing eligibility for nursing facility care shall be no more restrictive than a provision that the insured will qualify if either one of two criteria are met:

(a) Impairment in two activities of daily living.

(b) Impairment in cognitive ability.

history: (History: Added by Stats. 1999, Ch. 947, Sec. 7. Effective January 1, 2000.)

article: 3. General Provisions


text: Precedent to the payment of benefits for any care covered by the terms of the policy, any insurer offering long-term care insurance as described in Section 10231.2 may obtain a written declaration by a physician, independent needs assessment agency, or any other source of independent judgment suitable to the insurer that services are necessary.

history: (History: Added by Stats. 1989, Ch. 1273, Sec. 7.)

article: 3. General Provisions


text:
Long-term care insurance may not:

(a) Be canceled, nonrenewed, or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder.

(b) Contain a provision establishing a new waiting period in the event existing coverage is converted to, or replaced by, a new or other form within the same insurer, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.

(c) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care.

(d) Provide for payment of benefits based on a standard described as “usual and customary,” “reasonable and customary,” or words of similar import.

(e) Terminate a policy, certificate, or rider, or contain a provision that allows the premium for an in-force policy, certificate, or rider, to be increased due to the divorce of a policyholder or certificate holder.

(f) Include an additional benefit for a service with a known market value other than the statutorily required home- and community-based service benefits in Section 10232.9, the assisted living benefit in Section 10232.92, or a nursing facility benefit, unless the additional benefit provides for the payment of at least five times the daily benefit and the dollar value of the additional benefit is disclosed in the schedule page of the policy.

history: (History: Amended by Stats. 1999, Ch. 947, Sec. 8. Effective January 1, 2000.)

article: 3. General Provisions


text: If a policy or certificate replaces another long-term care policy or certificate, the replacing insurer shall waive any time periods applicable to preexisting conditions and probationary periods to the extent that similar exclusions have been satisfied under the original policy or certificate.

history: (History: Added by Stats. 1992, Ch. 1132, Sec. 14. Effective January 1, 1993.)

article: 3. General Provisions


text: No long-term care insurance benefits may be reduced because of out-of-pocket expenditures by the insured or on behalf of the insured by a family member of the insured or by any other individual.

history: (History: Added by Stats. 1989, Ch. 1273, Sec. 9.)

article: 3. General Provisions


text:
(a) An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means which prominently direct the attention of the recipient to the document and its purpose.

(b) In the case of agent solicitations, an agent shall deliver the outline of coverage prior to the presentation of an application or enrollment form.

(c) In the case of direct response solicitations, the outline of coverage shall be presented in conjunction with any application or enrollment form.

(d) The outline of coverage shall be a freestanding document, using no smaller than 10-point type.

(e) The outline of coverage shall contain no material of an advertising nature.

(f) Use of the text and sequence of the text of the outline of coverage set forth in this section is mandatory, unless otherwise specifically indicated.

(g) Text which is capitalized or underscored in the outline of coverage may be emphasized by other means which provide prominence equivalent to capitalization or underscoring.

(h) The outline of coverage shall be in the following form:

“(COMPANY NAME) (ADDRESS—CITY AND STATE) (TELEPHONE NUMBER) LONG-TERM CARE INSURANCE OUTLINE OF COVERAGE (Policy Number or Group Master Policy and Certificate Number)

1.This policy is (an individual policy of insurance) ((a group policy) which was issued in the (indicate jurisdiction in which group policy was issued)).

2.PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY!

3.TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.

(a) Provide a brief description of the right to return—“free look” provision of the policy.

(b) Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains those provisions, include a description of them.

4.THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer’s Guide available from the insurance company.

(a) (For agents) Neither (insert company name) nor its agents represent Medicare, the federal government or any state government.

(b) (For direct response) (insert company name) is not representing Medicare, the federal government or any state government.

5.LONG-TERM CARE COVERAGE. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community, or in the home.

This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to policy (limitations) (waiting periods) and (coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity policy.)

6.BENEFITS PROVIDED BY THIS POLICY.

(a) (Covered services, related deductible(s), waiting periods, elimination periods, and benefit maximums.)

(b) (Institutional benefits, by skill level.)

(c) (Noninstitutional benefits, by skill level.)

(Any benefit screens must be explained in this section. If these screens differ for different benefits, explanation of the screen should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too must be specified. If activities of daily living (ADLs) are used to measure an insured’s need for long-term care, then these qualifying criteria or screens must be explained.)

7.LIMITATIONS AND EXCLUSIONS.

(Describe:

(a) Preexisting conditions.

(b) Noneligible facilities/provider.

(c) Noneligible levels of care (e.g., unlicensed providers, care or treatments provided by a family member, etc.).

(d) Exclusions/exceptions.

(e) Limitations.)

(This section should provide a brief specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in (6) above.)

THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG-TERM CARE NEEDS.

8.RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of long-term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. (As applicable, indicate the following:

(a) That the benefit level will NOT increase over time.

(b) Any automatic benefit adjustment provisions.

(c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage.

(d) If there is a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations.

(e) And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated.)

9.TERMS UNDER WHICH THE POLICY (OR CERTIFICATE) MAY BE CONTINUED IN FORCE OR DISCONTINUED.

(a) Describe the policy renewability provisions.

(b) For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy.

(c) Describe waiver of premium provisions or state that there are no waiver of premium provisions.

(d) State whether or not the company has a right to change premium, and if that right exists, describe clearly and concisely each circumstance under which the premium may change.

10.ALZHEIMER’S DISEASE, ORGANIC DISORDERS, AND RELATED MENTAL DISEASES.

(State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer’s Disease, organic disorders, or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision that provides preconditions to the availability of policy benefits for that insured.)

11.PREMIUM.

(a) State the total annual premium for the policy.

(b) If the premium varies with an applicant’s choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.

12.ADDITIONAL FEATURES.

(a) Indicate if medical underwriting is used.

(b) Describe other important features.

13.INFORMATION AND COUNSELING. The California Department of Insurance has prepared a Consumer Guide to Long-Term Care Insurance. This guide can be obtained by calling the Department of Insurance toll-free telephone number. This number is 1-800-927-HELP. Additionally, the Health Insurance Counseling and Advocacy Program (HICAP) administered by the California Department of Aging, provides long-term care insurance counseling to California senior citizens. Call the HICAP toll-free telephone number 1-800-434-0222 for a referral to your local HICAP office.”

history: (History: Amended by Stats. 1999, Ch. 947, Sec. 9. Effective January 1, 2000.)

article: 3. General Provisions


text:
A certificate issued pursuant to a group long-term care insurance policy, which policy is delivered or issued for delivery in this state, shall include all of the following:

(a) A description of the principal benefits and coverage provided in the policy.

(b) A statement of the principal exclusions, reductions, and limitations contained in the policy.

(c) A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premiums.

(d) A statement that the group master policy determines governing contractual provisions.

(e) An explanation of the insured’s rights regarding continuation, conversion, and replacement.

history: (History: Amended by Stats. 1992, Ch. 1132, Sec. 16. Effective January 1, 1993.)

article: 3. General Provisions


text: No policy may be advertised, marketed, or offered as long-term care or nursing home insurance unless it complies with this chapter.

history: (History: Added by Stats. 1989, Ch. 1273, Sec. 12.)

article: 3. General Provisions