text:
The premium rate schedules for all individual and group long-term care insurance policies issued in this state shall be filed with and receive the prior approval of the commissioner before the policy may be offered, sold, issued, or delivered to a resident of this state.

All initial rate filings shall be subject to the following:

(a) An approval for an initial premium schedule shall not be granted unless the actuary performing the review for the commissioner certifies that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated. The certification may rely on supporting data in the filing. The actuary performing the review may request an actuarial demonstration that the assumptions the insurer has used are reasonable. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and creditable data from other studies, or both.

(b) The insurer shall submit to the commissioner for approval a rate filing for each policy form that includes at least all of the following information:

(1) An actuarial memorandum that describes the assumptions the insurer used to develop the premium rate schedule. The actuarial assumptions shall include, but not be limited to, a sufficiently detailed description of morbidity assumptions, voluntary lapse rates, mortality assumptions, asset investment yield rates, a description of all expense components, and plan and option mix assumptions. The memorandum shall also include the expected lifetime loss ratio and projections of yearly earned premiums, incurred claims, incurred claim loss ratios, and changes in contract reserves.

(2) An actuarial certification consisting of at least all of the following:

(A) A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated.

(B) A statement that the policy design and coverage provided have been reviewed and taken into consideration.

(C) A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration.

(D) A complete description of the basis for contract reserves that are anticipated to be held under the form, to include all of the following:

(i) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held.

(ii) A statement that the assumptions used for reserves contain reasonable margins for adverse experience.

(iii) A statement that the net valuation premium for renewal years does not increase.

(iv) A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses, or if that statement cannot be made, a complete description of the situations in which this does not occur and the type and level of change in the reserve assumptions that would be necessary for the difference to be sufficient. An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship. If the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under subdivision (a) based on a standard age distribution.

(E) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits or a comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

(c) Premium rate schedules and new policy forms shall be filed by January 1, 2002, for all group long-term care insurance policies that an insurer will offer, sell, issue, or deliver on or after January 1, 2003, and for all previously approved individual long-term care insurance policies that an insurer will offer, sell, issue, or deliver on or after January 1, 2003, unless the January 1, 2002, deadline is extended by the commissioner. Insurers may continue to offer and market long-term care insurance policies approved before January 1, 2002, until the earlier of (1) 90 days after approval of both the premium rate schedules and new policy forms filed pursuant to this section or (2) January 1, 2003. Insurers that have filed premium rate schedules and new policy forms by March 1, 2002, may continue to offer and market long-term care insurance policies approved before January 1, 2002, until the earlier of (1) 90 days after approval of both the premium rate schedules and new policy forms filed pursuant to this section or (2) June 30, 2003.

(d) This section shall not be construed as prohibiting an insurer from filing new group and individual policy forms, or from relieving an insurer of the obligation to file these forms, with the commissioner after January 1, 2003, if the policy form meets all the requirements of this chapter.

(e) (1) The commissioner shall not approve an initial premium rate schedule that includes scheduled rate increases based on the attained age of the insured or the duration of the policy.

(2) On and after January 1, 2021, a long-term care policy shall not be issued using a premium rate schedule that includes scheduled rate increases based on the attained age of the insured or the duration of the policy.

(3) Notwithstanding paragraphs (1) and (2), this subdivision does not prohibit or impact the pricing of benefits that allow for the purchase of additional coverage if the cost of the additional coverage is based on the insured’s attained age at the time the additional coverage is added.

history: (History: Amended by Stats. 2019, Ch. 625, Sec. 3. (AB 1209) Effective January 1, 2020.)

article: 4. Implementation


kind: section

code: INS

text:
All actuaries used by the commissioner to review rate applications submitted by insurers pursuant to this chapter who are employees of the department shall be members of the American Academy of Actuaries, with at least five years’ relevant experience in long-term care insurance industry pricing or alternatively shall meet the professional requirements to issue a “statement of actuarial opinion” as required by subdivision (a) of Section 10236.13.

If the department does not have sufficient employees who are actuaries meeting the requirements of this section to perform the volume of work required by this chapter, the commissioner may contract, as necessary, with independent actuaries who shall be members of the American Academy of Actuaries with at least five years’ relevant experience in long-term care insurance industry pricing.

If the department has employees who are actuaries, and independent actuaries under contract to the department, both meeting the requirements of this section to review rate applications, an insurer may generally choose between having the rate application reviewed by either employees or independent actuaries under contract to the department. The costs and expenses of reviews by independent actuaries under contract to the department shall be charged to the insurer. However, the department shall have the discretion to require a review by independent actuaries.

Employees of the department who are actuaries and who are otherwise qualified to review rate applications but who do not meet the requirements of this section may assist an independent actuary under contract to the department.

If the commissioner contracts with independent actuaries for purposes of this section, the commissioner shall promulgate regulations to maintain the confidentiality of rate filings and proprietary insurer information and to avoid conflicts of interest.

history: (History: Repealed and added by Stats. 2009, Ch. 101, Sec. 3. (AB 389) Effective January 1, 2010.)

division: 2. CLASSES OF INSURANCE

part: 2. LIFE AND DISABILITY INSURANCE

chapter: 2.6. Long-Term Care Insurance

article: 4. Implementation

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 2.6. Long-Term Care Insurance > 4. Implementation


text:
No insurer may increase the premium for an individual or group long-term care insurance policy or certificate approved for sale under this chapter unless the insurer has received prior approval for the increase from the commissioner.

The insurer shall submit to the commissioner for approval all proposed premium rate schedule increases, including at least all of the following information:

(a) Certification by an actuary, who is a member of the American Academy of Actuaries and who meets the qualification standards of that organization, that:

(1) If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated.

(2) The premium rate filing is in compliance with the provisions of this section.

(b) An actuarial memorandum justifying the rate schedule change request that includes all of the following:

(1) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase, and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale.

(A) Annual values for the five years preceding and the three years following the valuation date shall be provided separately.

(B) The projections shall include the development of the lifetime loss ratio. The lifetime expected loss ratio shall be calculated using the discount rate provided by subdivision (c) of Section 10236.14.

(C) For policies issued with premium rate schedules approved under Section 10236.11, the projections shall demonstrate compliance with subdivision (a) of Section 10236.14. For all other policies, the projections shall demonstrate compliance with Section 10236.1.

(D) If the commissioner determines that a premium rate increase is justified due to changes in laws or regulations that are retroactively applicable to long-term care insurance previously sold in this state, then:

(i) The projected experience should be limited to the increases in claims expenses attributable to the changes in law or regulations.

(ii) If the commissioner determines that potential offsets to higher claims costs may exist, the insurer shall be required to use appropriate net projected experience.

(2) Disclosure of how reserves have been incorporated in this rate increase.

(3) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary.

(4) A statement that policy design, underwriting, and claims adjudication practices have been taken into consideration.

(5) A statement that asset investment yield rate changes have not been used to justify the rate increase unless the insurer can demonstrate that its return on investments is lower than the maximum valuation interest rate for contract reserves for those policies or the commissioner determines that a change in interest rates is justified due to changes in laws or regulations that are retroactively applicable to long-term care insurance previously sold in this state.

(6) If it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer shall file composite rates reflecting projections of new certificates.

(c) A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the commissioner.

(d) Sufficient information for approval of the premium rate schedule increase by the commissioner.

(e) (1) The insurer, at its discretion, may request a premium rate schedule increase that is lower than the rate increase necessary to provide the certification required by subdivision (a) or a series of premium rate schedule increases with a present value of not more than the rate increase necessary to provide the certification required by subdivision (a). The commissioner may accept the premium rate schedule increase or series of increases without submission of the certification required by subdivision (a) if all of the following apply:

(A) In the opinion of the commissioner, accepting the lower premium rate schedule increase or increases is in the best interest of California policyholders.

(B) The actuarial memorandum discloses to the commissioner the rate increase necessary to provide the certification required by subdivision (a).

(C) The rate increase filing satisfies all other requirements of this section.

(D) The insurer discloses to policyholders affected by the approved increases the filed increase, the approved premium rate schedule increase or increases, and the amount and timing of any subsequent rate schedule increases included in the rate increase filing whether those subsequent rate schedule increases are approved or not approved by the commissioner.

(2) The commissioner may approve a lower requested premium rate schedule increase and may approve the initial increase or more than just the initial increase requested pursuant to paragraph (1).

(3) If the amount of increase after all increases disclosed pursuant to subparagraph (D) of paragraph (1), whether the increase or increases are approved or not approved by the commissioner, triggers the contingent benefit upon lapse, the commissioner shall require the administration by an insurer of the contingent benefit upon lapse as a condition of approval of a premium rate schedule increase that is lower than the amount necessary to provide the certification required by paragraph (1) of subdivision (a) or with the initial increase and each subsequent increase in a series of premium rate schedule increases. The commissioner may waive this condition of approval if an insurer demonstrates that the waiver is necessary to protect the financial condition of the insurer, including avoidance of further reductions in capital and surplus.

(4) For purposes of paragraph (2) of subdivision (a) of Section 10236.14, the loss ratio calculation shall assume future premiums are based on the total filed rate schedule increase or series of increases disclosed pursuant to subparagraph (D) of paragraph (1), whether the increase or increases are approved or not approved by the commissioner.

(5) Premium rate schedule increases requested pursuant to paragraph (1) or approved as described in paragraph (2) shall comply with the provisions of Sections 10234.6 and 10234.95.

(f) The provisions of this section are applicable to all individual and group policies issued in this state on or after July 1, 2002.

history: (History: Amended by Stats. 2016, Ch. 304, Sec. 15. (AB 2884) Effective January 1, 2017.)

article: 4. Implementation


text:
Approval of all premium rate schedule increases shall be subject to the following requirements:

(a) (1) Premium rate schedule increases shall demonstrate that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:

(A) The accumulated value of the initial earned premium times the maximum of both of the following:

(i) 58 percent.

(ii) The lifetime expected loss ratio calculated using the initial pricing assumption, actual distribution of policies issued, and the discount rate provided by subdivision (c).

(B) Eighty-five percent of the accumulated value of prior premium rate schedule increases on an earned basis.

(C) The present value of future projected initial earned premiums times the maximum of both of the following:

(i) 58 percent.

(ii) The lifetime expected loss ratio calculated using the initial pricing assumption, actual distribution of policies issued, and the discount rate provided by subdivision (c).

(D) Eighty-five percent of the present value of future projected premiums not in subparagraph (C) on an earned basis.

(2) However, if the premiums in any rate revision filing calculated in this manner produce a lifetime expected loss ratio that is less than the highest lifetime expected loss ratio for this policy form in the initial filing or that for requested premium rates in any filing made after January 1, 2013, the insurer shall reduce the premiums in the filing so that the current lifetime expected loss ratio is equal to or greater than the highest initially filed loss ratio or that for requested premium rates filed after January 1, 2013. In the determination of a lifetime expected loss ratio, the margin for moderately adverse experience shall be reflected and shall not be increased unless the manner in which risks are shared between the insurer and block of policies has been changed by this law or any future law or regulation. The determination of the lifetime expected loss ratio shall be based on the actual distribution of policies issued and not any assumed distribution prior to actual sales.

(b) In the event the commissioner determines that a premium rate increase is justified due to changes in laws or regulations that are retroactively applicable to long-term care insurance previously sold in this state, a premium rate schedule increase may be approved if the increase provides that 70 percent of the present value of projected additional premiums shall be returned to policyholders in benefits and the other requirements applicable to other premium rate schedule increases are met.

(c) All present and accumulated values used to determine rate increases should use the maximum valuation interest rate for contract reserves. If one rate increase filing includes policy forms with different discount rates, separate projections for each discount rate should be prepared and then combined to create the total projection for the filing.

(d) No request for a rate increase on any policy form approved under Section 10236.11 shall be approved by the commissioner except as follows: the experience on all similar long-term care policy forms issued in this state by the insurer and its affiliates and retained by the affiliated group that have been approved either prior to approval under, or pursuant to, Section 10236.11 shall be pooled together and the combined experience shall be used as the basis for assumptions that satisfy the requirements in subdivision (a). Those assumptions and requested rate increases may vary by policy form if actuarially appropriate. Similar long-term care policy forms shall be classified into one of the following benefit classifications: nursing facility and residential care facility only, home care only, or comprehensive long-term care benefits. An insurer is not precluded from filing requests for premium rate schedule increases on all of its policy forms if the combined experiences after pooling all applicable policy forms satisfies the requirements of subdivision (a).

(e) Notwithstanding any other provision of this section, for applications for rate revisions filed on or after January 1, 2013, the commissioner may approve the application if an insurer demonstrates that the rates are necessary to protect the financial condition of the insurer, including avoidance of further reductions in capital and surplus.

(f) The provisions of this section are applicable to all individual and group policies issued in this state on or after July 1, 2002.

history: (History: Amended by Stats. 2016, Ch. 304, Sec. 16. (AB 2884) Effective January 1, 2017.)

article: 4. Implementation


text:
Premium rate schedule increases that have been approved shall be subject to the following:

(a) For each rate increase that is implemented, the insurer shall file for approval by the commissioner updated projections, as defined in paragraph (1) of subdivision (b) of Section 10236.13, annually for the next three years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than three years.

(b) (1) If the commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in subdivision (a), the commissioner may require the insurer to implement any of the following:

(A) Premium rate schedule adjustments.

(B) Other measures to reduce the difference between the projected and actual experience.

(2) In determining whether the actual experience adequately matches the projected experience, consideration should be given to paragraph (6) of subdivision (b) of Section 10236.13, if applicable.

(c) If the commissioner demonstrates, based upon credible evidence, that an insurer has engaged in a persistent practice of filing inadequate premium schedules, the commissioner may, in addition to any other authority of the commissioner under this chapter, and after the insurer is afforded proper notice and due process, prohibit the insurer from filing and marketing comparable coverage for a period of up to five years or from offering all other similar coverages, and may limit marketing of new applications to the products subject to recent premium rate schedule increases.

(d) This section shall not apply to life insurance policies and certificates that accelerate benefits for long-term care.

(e) The provisions of this section are applicable to all individual and group policies issued in this state on or after July 1, 2002.

history: (History: Amended by Stats. 2016, Ch. 304, Sec. 17. (AB 2884) Effective January 1, 2017.)

article: 4. Implementation


text: This article applies to all long-term care insurance policies delivered or issued for delivery in this state on or after January 1, 1991.

history: (History: Added by Stats. 1990, Ch. 530, Sec. 3.)

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 2.6. Long-Term Care Insurance > 5. Inflation Escalator and Benefit Increases


text:
No insurer may deliver or issue for delivery a long-term care insurance policy or certificate in this state unless the insurer offers to each policyholder and certificate holder, in addition to any other inflation protection, the option to purchase a long-term care insurance policy or certificate that provides for benefit levels and benefit maximums to increase to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. Insurers shall offer to each policyholder and certificate holder, at the time of purchase, the option to purchase a long-term care insurance policy or certificate containing an inflation protection feature which is no less favorable than one that does one or more of the following:

(a) Increases benefit levels annually in a manner so that the increases are compounded annually at a rate of not less than 5 percent.

(b) Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status and without regard to claim status or history so long as the option for the previous period has not been declined. The amount of the additional benefit shall be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least 5 percent for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made.

(c) Covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount limit.

(d) The insurer of a group long-term care insurance policy as defined in subdivision (a), (b), or (c) of Section 10231.6, shall offer the holder of the group policy the opportunity to have the inflation protection pursuant to this section extended to existing certificate holders, but the insurer is relieved of the obligations imposed by this section if the holder of the group policy declines the insurer’s offer.

history: (History: Amended by Stats. 1999, Ch. 947, Sec. 16. Effective January 1, 2000.)

article: 5. Inflation Escalator and Benefit Increases


text: If the policy is issued to a group, the required offering in Section 10237.1 shall be made to the group policyholder; except that if the policy is issued to a group as defined in subdivision (d) of Section 10231.6, other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.


text:
The offer in Section 10237.1 shall not be required of any of the following:

(a) Life insurance policies or riders containing accelerated long-term care benefits.

(b) Expense incurred long-term care insurance policies. For purposes of this subdivision, “expense incurred” does not include policies paying a certain percentage of reasonable and customary charges up to a specified, indemnity-type maximum amount.


text:
(a) Inflation protection benefit increases under a policy that contains these benefits shall continue without regard to an insured’s age, claim status or claim history, or the length of time the person has been insured under the policy.

(b) An offer of inflation protection that provides for automatic benefit increases shall include an offer of a premium which the insurer expects to remain constant. The offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

(c) The inflation protection benefit increases under a policy or certificate that contains an inflation protection feature shall not be reduced due to the payment of claims.

history: (History: Amended by Stats. 1999, Ch. 947, Sec. 17. Effective January 1, 2000.)


text:
(a) An inflation protection provision that increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than 5 percent shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder.

(b) The rejection, to be included in the application or on a separate form, shall state: “I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed the plan, and I reject 5 percent annual compound inflation protection.Signature of ApplicantDate”

history: (History: Amended by Stats. 1999, Ch. 947, Sec. 18. Effective January 1, 2000.)


text:
(a) An insurer shall include the following information in or with the outline of coverage:

(1) A graphic comparison of the benefit levels of a policy that increases benefits at a compounded annual rate of not less than 5 percent over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a 20-year period.

(2) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases.

(b) An insurer may use a reasonable hypothetical or graphic demonstration for purposes of this disclosure.

history: (History: Added by Stats. 1997, Ch. 699, Sec. 22. Effective October 6, 1997.)


text: A “funeral insurance contract” is a life policy embodying an agreement, for a valuable consideration, to embalm or dispose of, or expressly to procure or pay or to provide funds for, in whole or in part, the embalming or disposal of the remains of any person living at the time of the issuance of such policy.

history: (History: Repealed and added by Stats. 1947, Ch. 557.)

chapter: 3. Burial Contracts

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 3. Burial Contracts


text: The provisions of this chapter shall apply to all funeral insurance contracts issued or delivered in this State upon the life of any person in this State and to any insurer issuing or delivering such contracts in this State upon the life of any person in this State.


text:
Anything in this code or elsewhere to the contrary notwithstanding, no funeral insurance contract shall be issued or delivered in this State upon the life of any person in this State unless it contains in substance the following provisions:

(1) A provision that the insured, after three months’ premiums have been paid, is entitled to a period of grace not less than 30 days within which to make payment of any subsequent premium, subject to the option of the insurer to make an interest charge, not in excess of 6 percent per annum, for the number of days of grace elapsing before the payment of the premium; during said period of grace the policy shall continue in full force. But in case the policy becomes a claim during the said period, the amount of such unpaid premiums, with interest thereon, may be deducted from the amount payable under the policy in settlement thereof.

(2) A provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue or from the date of any reinstatement thereof except for suicide, nonpayment of premiums or the violation of the conditions of the policy relating to military or naval service in time of war.

(3) A provision that the policy, the application therefor and any rider attached to the policy, shall constitute the entire contract between the parties; a copy of such application shall be endorsed upon or attached to the policy when issued. An application for reinstatement, if any, shall be a part of said contract even though not attached thereto. Such policy shall not incorporate therein, by reference or otherwise, the constitution, by-laws, or rules or regulations of any organization whatsoever. No insurer or society, including any society operating under Chapter 10 of Part 2 of Division 2 of this code, operating under any law which requires such incorporation shall issue or deliver funeral insurance contracts in this State.

(4) A provision that all statements made by the insured in his application for the policy or reinstatement thereof, shall, in the absence of fraud, be deemed representations and not warranties.

(5) A provision that if the age of the insured has been misstated in the policy or application thereof, the amount payable under the policy shall be such as the premium provided for therein would have purchased at the correct age.

(6) A provision that before the insurer may pay the proceeds of such policy or any portion thereof to any undertaker or funeral director designated in the policy for funeral services or miscellaneous expenses in connection therewith, the insurer shall require proof satisfactory to it that the services and expenses have been rendered and if proof of rendition of services and expenses is not furnished within 30 days after demand is made upon the insurer for such payment and in any event within one year from the date of the insured’s death, the insurer shall pay the proceeds of such insurance to the beneficiary designated in the policy, and if no beneficiary is so designated, to the estate of the insured or to any person, other than to such undertaker or funeral director, appearing to the insurer to be equitably entitled to all or any portion of the proceeds by reason of having incurred expense or furnished funeral services for the insured, to the extent of the expense incurred or services furnished.

(7) A provision granting the insured the right at any time during his lifetime to change the funeral director designated in the policy, if one be designated.

(8) If an insurer issuing any such funeral insurance contract is subject to a provision in the laws under which it operates or in its constitution or charter, to the effect that any person purchasing such contract would be subject to additional assessments, premiums or calls other than the premium stated in the contract, then that fact shall be prominently displayed on the application for, and in such contract when issued.

history: (History: Added by Stats. 1947, Ch. 557.)


text: All funeral insurance contracts shall be subject in all respects to the provisions of Sections 10150 to 10167 inclusive, and of Sections 10478 to 10489.6 inclusive of this code.


text: Limited death benefit insurance contracts may be issued and delivered in this state upon the life of any person in this state who makes premium payments over a period of time to purchase a funeral insurance policy. Those policies shall be subject to the disclosure requirements of this chapter.

history: (History: Added by Stats. 1995, Ch. 340, Sec. 1. Effective January 1, 1996.)


text:
(a) Except as permitted in Section 10247, no funeral insurance contract issued or delivered in this state upon the life of any person in this state shall contain any provision scaling down or reducing the benefits payable below the face amount of the policy. The provisions of this section, however, shall not apply to a reduction of the benefit payable because of a misstatement of the age in the policy or application therefor, nor to the suicide, military or naval service or war provisions of the policy, if any, nor to contestability of the policy, nor to a policy issued on the life of a juvenile.

(b) If a limited death benefit insurance contract is issued under Section 10247, the limited death benefit period shall not exceed two years.

history: (History: Amended by Stats. 1995, Ch. 340, Sec. 2. Effective January 1, 1996.)


text: No funeral insurance contract shall be issued or delivered in this State except by an admitted insurer issuing policies on a legal reserve basis.


text: No person shall sell or offer for sale any such funeral insurance contract in this state unless he or she is licensed as a life agent pursuant to the provisions of Chapter 5 (commencing with Section 1621).

history: (History: Amended by Stats. 1982, Ch. 454, Sec. 106.)


text:
(a) This chapter shall not apply to workers’ compensation insurance, any policy of liability insurance with or without supplementary coverage, or any policy or contract of reinsurance.

(b) This chapter shall apply to selected group disability insurance as defined in Section 10270.97, except insofar as it is exempted from Section 10401.

(c) This chapter shall apply to each of the types of insurance enumerated in this subdivision that insure more than one person, except to the extent that the type of insurance may be exempted from compliance with particular portions of this chapter by the provisions of this chapter relating to that type of insurance.

The types of insurance that insure more than one person and that are hereby exempted from subdivision (c) of Section 10320 (but family expense disability insurance only to the extent therein provided), and Section 10401 (but only to the extent in this chapter provided) are:

(1) Blanket insurance, as defined in subdivision (a) of Section 10270.2.

(2) Tuition refund insurance, as defined in Section 10270.1.

(3) Group disability insurance, as defined in Sections 10270.5, 10270.505, and 10270.57.

(4) Family expense disability insurance, as defined in Section 10270.7.

(5) Unemployment compensation disability insurance, as defined in paragraph (6) of subdivision (a) of Section 10270.2.

history: (History: Amended by Stats. 2018, Ch. 231, Sec. 15. (AB 2045) Effective January 1, 2019.)

article: 1. Scope of Chapter and Definitions

path: 2. CLASSES OF INSURANCE > 2. LIFE AND DISABILITY INSURANCE > 4. Standard Provisions in Disability Policies > 1. Scope of Chapter and Definitions


text:
(a) As used in this section:

(1) “Institution” means any school, college or other institution of learning or the principal or head thereof.

“Camp” means one or more tents, vehicles, buildings or structures together with the tract of land appertaining thereto, established or maintained as living quarters for temporary occupancy by 10 or more people, and shall include the principal or head thereof.

(2) “Student” means any student or pupil or his parent, guardian or other person who pays or becomes obligated to pay the tuition or fee required for registration or attendance at the institution.

“Camper” means any person or his parent, guardian or other person who pays or becomes obligated to pay the tuition or fee required for registration or attendance at the camp.

(3) “Tuition refund insurance” means any policy which, because of a student’s or camper’s absence from, or inability to register at or attend, an institution or camp, as the case may be, provides for the indemnification of the student or camper for his loss of tuition or fee, or if he has been previously indemnified therefor by the institution or camp, for its reimbursement.

(b) Except to the extent provided herein, the other sections of this chapter shall not apply to tuition refund insurance providing coverage for ten (10) or more students or campers.

(c) No policy of tuition refund insurance shall be delivered or issued for delivery to any person in this State unless approved as to substance and form by the commissioner. The commissioner may, after notice and hearing, promulgate such reasonable rules and regulations, relating to the substance, form and issuance of such policies, as are necessary or desirable to preserve, insofar as applicable, standards as respects substance, form and issuance comparable to the standards in such respects prescribed by this chapter and applicable to disability policies, and to further the purpose or purposes for which such policies are to be issued.

(d) Tuition refund insurance may be issued only to an institution or camp which does not have a similar policy in effect, but its cost may be borne by the student or camper, as the case may be, in which event he may, upon request, obtain from the insurer a copy of the policy.

history: (History: Amended by Stats. 1957, Ch. 1558.)

chapter: 4. Standard Provisions in Disability Policies

article: 1. Scope of Chapter and Definitions


text:
(a) Blanket insurance is that form of insurance providing coverage for specified circumstances and insuring by description all or nearly all persons within a class of persons defined in a policy issued to a master policyholder, and not by specifically naming the persons covered, by certificate or otherwise, although a statement of the coverage provided may be given, or required by the policy to be given, to eligible persons. The permitted types of blanket insurance are those where the blanket policy is issued to any of the following:

(1) A volunteer or governmental fire department, emergency medical services company, or similar volunteer or governmental organization providing benefits to members or participants only in the event of accident incurred while performing actions incident to an activity or operation sponsored or supervised by the department, company, or organization.

(2) A college, school, or other institution of learning, a school district or districts or school jurisdictional unit, or to the head, principal, or governing board of an educational unit who or which shall be deemed the policyholder; providing benefits to students without necessarily any restriction as to activity, time, or place, or to teachers, employees, or volunteers, while performing actions incident to special duties, such as at camps, at summer playgrounds, or during tours or excursions; and providing benefits to students, teachers, employees, or volunteers, and spouses and dependents of students, teachers, and employees, for death or dismemberment resulting from accident, or for hospital, medical, surgical, drug, or nursing expenses resulting from accident or sickness.

(3) A sports team, camp, sponsor, or proprietor thereof, who shall be deemed the policyholder, providing benefits to sports team participants, campers, employees, officials, supervisors, volunteers, or persons responsible for their support, for death or dismemberment resulting from accident, or for hospital, medical, surgical, or nursing expenses resulting from accident, to those participants, campers, employees, officials, supervisors, volunteers, or persons responsible for their support, or arising out of sickness of those participants, campers, employees, officials, supervisors, volunteers, or persons responsible for their support, provided the accident or the first manifestation of sickness occurs while those participants, campers, employees, officials, supervisors, volunteers, or persons responsible for their support are in or on the buildings or premises of the sports team or camp, being transported between their homes and the sports team or camp, or while at any other place as an incident to sports team- or camp-sponsored activities or while being transported to, from, or between those places.

(4) (A) A newspaper, farm paper, magazine, or other periodical publication, which shall be deemed the policyholder, providing benefits for independent contractors, such as carriers, newsboys, dealers, distributors, wholesalers, or others engaged in the sale, distribution, collecting for, or other activities pertaining to the marketing and delivery of the publication, including attendance at a coaching school or participation as a member of a trip organized, supervised, and sponsored as a reward for meritorious service, on account of loss resulting from accident or sickness, the benefit to be payable to the independent contractors or to their parents, guardians, or other persons responsible for their support.

(B) When the premium for the insurance is paid by the person insured, the person may, upon request, obtain from the insurer in certificate form a copy of the policy.

(5) Any religious, charitable, recreational, educational, athletic, civic organization, or branch thereof, which shall be deemed the policyholder, providing benefits to any group of members, employees, or participants for death or dismemberment or for hospital, medical, surgical, or nursing expenses resulting from accident incurred incident to specific hazards pertaining to any activity or activities or operations sponsored or supervised by, or on the premises of, the policyholder.

(6) An employer, a majority of the employees in this state of an employer, or both, upon application, to pay the benefits afforded by a voluntary plan of unemployment compensation disability insurance. Notwithstanding the provisions of Section 10113, the policy may incorporate by reference any of the appropriate provisions of Part 2 (commencing with Section 2601) of Division 1 of the Unemployment Insurance Code and the authorized regulations of the Director of Employment Development.

(7) An employer, who shall be deemed the policyholder, providing benefits to any group of workers, dependents, or guests, limited by reference to specified hazards incident to activities or operations of the policyholder, for death or dismemberment, or for hospital, medical, surgical, or nursing expenses, resulting from accident. When the premium for the insurance is paid by the person insured, the person may, upon request, obtain from the insurer in certificate form a copy of the policy.

(8) Any common carrier or any operator, owner, or lessor of a means of transportation, who shall be deemed the policyholder, providing benefits to any group of persons who may become lessees or passengers, limited by reference to their travel status on that common carrier or that means of transportation, for death or dismemberment, or for hospital, medical, surgical, or nursing expenses, resulting from accident. When the premium for the insurance is paid by the person insured, the person may, upon request, obtain from the insurer in certificate form a copy of the policy.

(9) An entertainment production company, who shall be deemed the policyholder, providing benefits to any group of participants, volunteers, audience members, contestants, or workers for death or dismemberment, or for hospital, medical, surgical, or nursing expenses, resulting from accident while engaged in any activity or operation of the policyholder. When the premium for the insurance is paid by the person insured, the person may, upon request, obtain from the insurer in certificate form a copy of the policy.

(b) A “blanket policy” is any disability policy of the nature herein described sold to any of the entities described in paragraphs (1) to (9), inclusive, of subdivision (a) that provides coverage for any group of persons within permitted categories defined in the policy. Policies referred to in paragraph (6) of subdivision (a) shall comply with the provisions of this section specifically referring thereto. Policies referred to in paragraphs (1) to (5), inclusive, or (7) to (9), inclusive, of subdivision (a) may provide that the cost of the insurance coverage shall be borne by either the policyholder, or the individuals insured or their parents or guardians, payable through the policyholder. In the absence of a policy provision excluding coverage for otherwise covered individuals who have not individually enrolled with the policyholder and undertaken to pay all or a specified portion of the premium allocable to the individual, the policy shall provide the described insurance for all who fall within the categories of covered individuals defined in the policy. The policy may, but is not required to, contain provisions requiring a minimum number of participating persons or a minimum percentage of participation before the policy is effective. In the absence of such a provision, coverage shall not be denied any individual otherwise eligible on those grounds.

(c) A policy described in paragraphs (1) to (5), inclusive, or (7) to (9), inclusive, of subdivision (a) shall not be issued until approved as to substance and form by the commissioner. The commissioner may, after notice and hearing, promulgate reasonable rules and regulations relating to the substance, form, and issuance of the policies that are necessary or desirable to preserve, insofar as applicable, standards of substance, form, and issuance comparable to the standards prescribed by this chapter that are applicable to other types of disability policies, and to further the purposes for which the policies are issued.

(d) A policy described in paragraph (6) of subdivision (a) shall not be issued until approved as to form by the commissioner. The commissioner may, after notice and hearing, promulgate reasonable rules and regulations relating to the form and issuance of the policies that do not affect the substance of the coverage, and that are necessary or desirable to preserve, insofar as applicable, standards of form and issuance comparable to the standards prescribed by this chapter that are applicable to other types of disability policies, and to further the purposes for which the policies are issued. Notwithstanding the provisions of Section 10113, the policy may incorporate by reference any of the appropriate provisions of Part 2 (commencing with Section 2601) of Division 1 of the Unemployment Insurance Code and the authorized regulations of the Director of Employment Development.

(e) A policy described in this section shall not constitute workers’ compensation insurance, as defined in Section 109. A policy described in paragraphs (3), (5), (7), (8), or (9) of subdivision (a) shall not be marketed or sold as a substitute for health insurance coverage compliant with the requirements of the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152).

(f) (1) An insurer that intends to issue a policy of blanket insurance authorized by the amendments to this section pursuant to the act adding this subdivision, or authorized pursuant to Section 10270.2.5, using a policy form previously approved by the commissioner, where the only new language in the policy is the specification of the policyholder, covered persons, or the hazards or activities insured, shall file that new language with the commissioner prior to issuance of the policy. Submissions of documents containing variable text or blanks shall include complete lists of the variable wording or accurate descriptions of the material to be inserted in lieu of the variable wording or in the blanks of these documents.

(2) A policy using the new language shall not be issued until either 30 days expires without notice from the commissioner after the new language is filed, or the commissioner gives their written approval prior to that time. If the commissioner at any time notifies the insurer, in writing and specifying the reasons for the opinion, that the filed new language does not comply with the requirements of law, the insurer shall not issue any policy containing that language.

(3) This subdivision shall not be construed to provide separate authority for the commissioner to reopen review of previously approved policy forms.

history: (History: Amended by Stats. 2025, Ch. 558, Sec. 20. (AB 487) Effective January 1, 2026.)

article: 1. Scope of Chapter and Definitions


text:
(a) In addition to the permitted types of blanket insurance issued to entities described in Section 10270.2, the commissioner may, in his or her discretion, add other entities that may be eligible to purchase blanket insurance for any class of risks relating to benefits for death or dismemberment, or for hospital, medical, surgical, or nursing expenses, resulting from accident which may be properly eligible for blanket insurance.

(b) (1) The commissioner may issue a letter order, and shall post the letter order on the Internet Web site of the Department of Insurance, any time he or she exercises discretion pursuant to subdivision (a) to add other entities that may be eligible to purchase blanket insurance. These letter orders shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(2) The commissioner may withdraw a letter order issued pursuant to this section in the manner described in subdivision (f) of Section 10291.5. A proceeding under this subdivision shall not be subject to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Added by Stats. 2012, Ch. 321, Sec. 3. (AB 2084) Effective January 1, 2013.)

article: 1. Scope of Chapter and Definitions


text:
(a) A blanket disability policy of a type permitted under paragraph (2) or (5) of subdivision (a) of Section 10270.2 may include either a coordination of benefits policy provision or a nonduplication of benefits policy provision, at the option of the policyholder.

(b) The essential features of any policy under paragraph (2) or (5) of subdivision (a) of Section 10270.2 shall be disclosed to the insured, or the parent or legal guardian of the insured, prior to enrollment in that policy. All disclosures shall state whether or not the benefits payable under the blanket insurance policy are subject to reduction, to the extent provided in the policy, if an individual insured thereunder is entitled to benefits, whether on an indemnity basis or on a provision-of-service basis, for hospital, medical, dental, or surgical expenses under any other valid and collectible individual, group, or blanket insurance policy or contract, hospital or medical service program, or group-practice prepayment plan, except for automobile medical payments insurance.

(c) The disclosure material shall be submitted to the commissioner for review with the blanket insurance policy.

history: (History: Amended by Stats. 2012, Ch. 321, Sec. 4. (AB 2084) Effective January 1, 2013.)

article: 1. Scope of Chapter and Definitions


text: Any disability insurer may issue policies of group disability insurance and family expense disability insurance as defined in this article but shall not issue any form of policy of group disability insurance, or family expense disability insurance except as prescribed in this article and except as provided in Article 6.7 of Chapter 1 of Part 2 of Division 1. Provided, however, that during the calendar years of 1952 to 1956, inclusive, a policy of family expense disability insurance as defined in Section 10270.7 may either (1) contain the provisions required by Section 10270.8 and those promulgated by the commissioner pursuant to Sections 10270.9 and 10270.93 and be subject to this article and to Section 10291.5 or (2) be filed and approved under Article 2 of this chapter and be subject to such article and to Articles 3a, 4a and 5a of this chapter and contain the provision required by Section 10270.8(b). On and after January 1, 1957 the provisions of this article shall no longer relate to such policies except Section 10270.7 and subdivision (b) of Section 10270.8 and all of such policies shall be subject to the provisions set forth in alternative (2) above, except that such policies need not comply with subsection (c) of Section 10320 if they comply with Section 10270.7.

history: (History: Amended by Stats. 1963, Ch. 2055.)

article: 1. Scope of Chapter and Definitions


text:
Group disability insurance is that form of disability insurance which conforms to all of the following conditions:

(a) Written under a master policy, issued to any of the following:

(1) The federal or state government, any federal or state agency, political subdivision or district, any public, governmental, or municipal corporation, any unit, agency, or department thereof, any corporation, copartnership or individual employer, or to the trustee of any association of employers, offering insurance to all the employees of the employer or of the employer members of the association or to all of any class or classes thereof determined by conditions pertaining to employment and covering not less than two such employees or those employees together with their dependents or spouses for amounts of insurance based upon some plan which will preclude individual selection by the employee as to the amount of his or her insurance coverage thereunder.

(2) A principal eligible to have issued to him or her a policy of group life insurance under the provisions of Section 10203.7 and insuring not less than two agents as defined in that section and eligible thereunder to be insured, or those agents together with their dependents or spouses.

(3) Any association having a constitution and bylaws and formed and continuously maintained in good faith for purposes other than that of obtaining insurance, offering insurance to all the eligible members, or class of members, of the association and covering not less than two such members or those members together with their dependents or spouses and not less than 25 percent of all eligible members, or class of members, for amounts of insurance based upon some plan which will preclude individual selection by the member as to the amount of his or her insurance coverage thereunder. If the master policy is to be issued to cover members of labor unions, it may be issued to more than one such union.

(4) 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. The association or associations shall have at the outset a minimum membership of 100 persons, and shall be organized and maintained in good faith for purposes other than that of obtaining insurance. The association or associations shall have been in active existence for at least two years, and shall have a constitution and bylaws which require regular meetings not less than annually to further purposes of the members. The members shall have voting privileges and representation on the governing board or boards and committees. The policy shall be subject to the following requirements:

(A) The policy may insure members of the association or associations, and employees thereof.

(B) The premium for the policy shall be paid from funds contributed by the association or associations, or by members, or by both, or from funds contributed by the covered persons, or from both the covered persons and the association.

(C) A policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for the insurance shall insure all eligible persons, except those who, in writing, reject the coverage.

(5) Any trustees eligible to have issued to them a policy of group life insurance under the provisions of Section 10202.8 and insuring not less than two employees or members eligible thereunder to be insured or those employees or members together with their dependents or spouses.

(6) A school district or districts, the governing board of any school district or districts, a private or parochial school or schools, or the governing board or person in charge of the operation of any private or parochial school or schools, insuring not less than 50 pupils of the school or district and providing benefits to pupils or persons responsible for their support for death or dismemberment resulting from accident or for hospital, medical and surgical expenses resulting from accident to those pupils while they are in or on buildings or premises of the schools or districts during the time the pupils are required to be therein or thereon by reason of their attendance upon a college or a regular day school or any regular day school of a school district or districts or while being transported by the school or schools or district or districts to and from school or other place of instruction or while at any other place as an incident to school-sponsored activities and while being transported to, from and between these places.

(b) Transmission or collection of all premiums or premium contributions shall be performed by the policyholder, except where the policy specifies the persons other than the policyholder by whom the transmission or collection shall be made, and in one of the following situations:

(1) If the 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 these collections. If the employees of more than 100 such employers are covered under that 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 the collection.

(2) If the policy covers a group of governmental employees and the governmental unit paying those employees will not transmit their premium contribution after payroll deduction, the insurer may collect from the individual employees. If more than 100 of these employees are covered under that 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 the collection.

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

(4) If the policy covers the members of an association, the insurer may collect premium contributions from individual members or may assist the policyholder in making these collections. If more than 100 such members are covered under that policy, it shall state as a part of the premium to be charged for the policy the amount to be charged by the insurer for the collection.

(c) There is issued and delivered in accordance with the policy provision required by subdivision (b) of Section 10270.6 an individual certificate setting forth the benefits and the exceptions under, and referring to, the master policy under which the certificate is issued.

Those certificates are not subject to the provisions of this chapter relating to the master policy, but the forms thereof shall be submitted to the commissioner for his or her approval and shall not be issued without approval of the forms in the manner provided in the case of the master policy.

history: (History: Amended by Stats. 2007, Ch. 78, Sec. 4. Effective January 1, 2008.)

article: 1. Scope of Chapter and Definitions


text:
Every group disability master policy shall contain the following provisions:

(a) A provision that the policy, the application of the policyholder, and the individual applications, if any, of the individuals insured shall constitute the entire contract between the parties, and that all statements made by the policyholder, or by the individuals insured shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement shall be used in defense to a claim under the policy, unless it is contained in a written application;

(b) A provision that the insurer will issue to the policyholder for delivery to the individuals insured under such policy, an individual certificate setting forth a statement as to the insurance protection to which he or she is entitled and to whom payable;

(c) A provision that to the group or class thereof originally insured shall be added from time to time all new employees, members, or pupils of the policyholder eligible to and applying for insurance in such group or class;

(d) A statement that such policy is not in lieu of and does not affect any requirement for coverage by workers’ compensation insurance.

history: (History: Amended by Stats. 2018, Ch. 231, Sec. 16. (AB 2045) Effective January 1, 2019.)

article: 1. Scope of Chapter and Definitions


text:
Family expense disability insurance is that form of disability insurance insuring more than one person and issued to the head of a family or his spouse indemnifying him, or his spouse, or both, against loss due to disability of one or more persons dependent at the time of issuance upon him, or his spouse, or both, and may include indemnification on account of his own disability and disability of his spouse whether or not either is dependent on the other.

Where such a policy provides for payment for expenses incurred, expenses incurred by or upon behalf of any person covered by the policy shall be deemed incurred by the person to whom or at whose direction benefits are payable under the policy.

No question as to whether or not any person is the head of the family or his spouse, or is a child or dependent of either shall relieve the insurer of any liability it otherwise would have under the policy.

Where such a policy indemnifies a spouse alone or a spouse and the head of the family, references in the policy to the head of the family shall be deemed to refer to or include the spouse.

history: (History: Amended by Stats. 1951, Ch. 887.)

article: 1. Scope of Chapter and Definitions


text:
Family expense disability policies shall also contain the following provisions:

(a) A provision that the policy and the application, if any, of the head of the family shall constitute the entire contract between the parties, and that all statements made by the head of the family shall, in the absence of fraud, be deemed representations and not warranties, and that no statement shall be used in defense to a claim under the policy, unless it is contained in a written application;

(b) A provision that to the family originally insured may be added from time to time all new members of the family eligible for insurance in such family; and that the head of the family shall give the insurer notice of the addition to the family of any person eligible for coverage under the policy.

history: (History: Amended by Stats. 1955, Ch. 1596.)

article: 1. Scope of Chapter and Definitions


text:
No group disability policy shall be issued or delivered in this state nor, except as otherwise provided in Sections 10270.91 and 10270.98, shall an insurer provide or agree to provide group disability coverage until a copy of the form of the policy is filed with the commissioner and approved by him in accordance with Article 2 of this chapter as meeting in substance the reasonably applicable provisions and requirements of either Articles 3, 4 and 5 of this chapter or Articles 3a, 4a and 5a of this chapter; provided, however, that the insurer may, at its option, substitute for one or more of such provisions of Articles 4a and 5a corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the policyholder, the certificate holder or the beneficiary. On and after January 1, 1957, no group disability policy shall be issued or delivered in this state unless the form thereof has been approved, as required by this section, as meeting in substance the provisions and requirements of Articles 3a, 4a and 5a of this chapter which are reasonably applicable; provided, however, that the insurer may, at its option, substitute for one or more of such provisions of Articles 4a and 5a corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the policyholder, the certificate holder or the beneficiary.

Except as provided by Section 10314, no group disability policy shall be issued or delivered to any person in this state nor shall any endorsement for any such policy be issued which contains any provision contradictory, in whole or in part, of any of the provisions promulgated by the commissioner as being required or optional or alternative provisions to be incorporated into such policy in accordance with the rules promulgated by him for their use.

history: (History: Amended by Stats. 1967, Ch. 1548.)

article: 1. Scope of Chapter and Definitions


text:
The state and any political subdivisions thereof and any municipality, may provide for the type of insurance set forth in Section 10270.5 of this code the same as any private employer and may contribute to a fund established under such section the same as any private employer.

A county may include as persons eligible under its master policy issued pursuant to Section 10270.5, employees of a district located wholly or partially within the county. Such inclusion of district employees is subject to Section 53200.4 of the Government Code.

history: (History: Amended by Stats. 1968, Ch. 935.)

article: 1. Scope of Chapter and Definitions


text:
(a) With respect to a policy issued to a corporation, copartnership or individual employer eligible for group insurance pursuant to Section 10270.5, the term “employees” may be deemed to include the officers, managers and employees of subsidiary or affiliated corporations, and the individual proprietors, partners and employees of affiliated individuals and firms, when the business of such subsidiary or affiliated corporations, firms or individuals is controlled by the policyholder through stock ownership, contract or otherwise, or when the policyholder is controlled by affiliated corporations, firms or individuals through stock ownership, contract or otherwise.

(b) With respect to a policy issued to a copartnership or individual employer pursuant to Section 10270.5, the term “employees” may be deemed to include the individual proprietor or partners of the policyholder.

(c) With respect to a policy issued to a trust pursuant to subdivisions (1) or (4) of subsection (a) of Section 10270.5 the term “employees” may be deemed to include (1) the individual proprietors and partners of any employers which are individual proprietors or partnerships, (2) the employees of an association and (3) the trustee, or trustees, or the employees of the trustee, or trustees, or both, if their duties are principally connected with such trusteeship.

(d) With respect to a policy issued to an association pursuant to subdivision (3) of subsection (a) of Section 10270.5 the term “members” may be deemed to include the employees of the association.

(e) Nothing contained herein shall permit a director of a corporate employer to become insured under a group policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director.

(f) Nothing contained herein shall permit an individual proprietor or partner to become insured under a group policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership.

(g) Nothing contained herein shall permit any employee to become insured under a group policy unless he is an officer, manager, or employee for compensation of the employer to whom a group policy is issued, or of one or more of the individuals, firms, or corporations specified in subdivision (a), or of the association or trustee or trustees specified in subdivision (c), or of the association specified in subdivision (d).

(h) Officers, managers, and employees of a public agency who receive no compensation may be insured under a group policy purchased pursuant to the provisions of Article 1 (commencing with Section 53200) of Chapter 2, Part 1, Division 2, Title 5 of the Government Code.

history: (History: Amended by Stats. 1972, Ch. 420.)

article: 1. Scope of Chapter and Definitions


text:
Another form of group disability insurance is that form of disability insurance conforming to the following conditions:

(a) Written under a master policy issued to the trustee of any self-employed individuals, whether or not they have any employees, all of whom have contracts with the same publisher of a newspaper, for the performance of services for such publisher as independent contractors, offering insurance to such self-employed individuals and to all the employees of any such persons and covering not less than 10 such self-employed individuals and their employees or such individuals and their employees together with their dependents or spouses for amounts of insurance based upon some plan which will preclude individual selection by the eligible person as to the amount of his insurance coverage thereunder;

(b) For delivery to each person insured thereunder, other than dependents or spouses of an insured employee or person, there is issued to the holder of the master policy by the insurer an individual certificate setting forth the benefits and the exceptions under, and referring to, the master policy under which the certificate is issued.

Such certificates are not subject to the provisions of this chapter relating to the master policy, but the forms thereof shall be submitted to the commissioner for his approval and shall not be issued without such approval of such forms in the manner provided in the case of the master policy.

history: (History: Added by Stats. 1963, Ch. 1528.)

article: 1. Scope of Chapter and Definitions


text:
An individual certificate shall be individualized, except that in the case of an individual certificate under a group policy which requires no regular contribution toward the payment of the premium to be made by the individuals 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 person covered 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 person covered or some other means of identifying to the individual covered that it is his individual certificate.

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

article: 1. Scope of Chapter and Definitions


text: If hereafter any dividend is paid or any premium refunded under any policy of group disability 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 such insured persons or by union or association to which 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.)

article: 1. Scope of Chapter and Definitions


text:
An insurer is permitted to provide group disability 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.)

article: 1. Scope of Chapter and Definitions


text:
The commissioner may suspend or revoke the permission granted any insurer in Section 10270.91 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 10270.91;

(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 10270.91 or the administration thereof that the policyholder or the persons insured have been misled or exposed to the danger of loss.

article: 1. Scope of Chapter and Definitions


text:
No family expense disability policy shall be issued or delivered in this State unless a copy of the form thereof is filed with the commissioner and approved by him in accordance with Article 2 of this chapter as meeting in substance either the provisions and requirements of Articles 3, 4 and 5 of this chapter which are reasonably applicable, or the provisions and requirements of Articles 3a, 4a and 5a of this chapter which are reasonably applicable; provided, however, that the insurer may, at its option, substitute for one or more of such provisions of Articles 4a and 5a corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary.

Except as provided by Section 10314, no family expense disability policy shall be issued or delivered to any person in this State nor shall any endorsement for any such policy be issued which contains any provision contradictory, in whole or in part, of any of the provisions promulgated by the commissioner as being required or optional or alternative provisions to be incorporated into such policy, except a policy or endorsement which has been approved by the commissioner under Article 2 of this chapter as meeting the applicable requirements of Articles 2, 3a, 4a and 5a of this chapter and as containing the provisions or substitute provisions as required by Articles 4a and 5a of this chapter modified in such manner as to make the provisions consistent with family expense coverage and the coverage provided in the policy and endorsement, if any. On and after January 1, 1957, no family expense disability policy shall be delivered or issued for delivery to any person in this State unless it complies with Articles 2, 3a, 4a and 5a of this chapter.

article: 1. Scope of Chapter and Definitions


text: The commissioner shall promulgate forms of provisions which incorporate in substance the applicable provisions set forth in Articles 4 (commencing with Section 10329), 4a (commencing with Section 10350), 5 (commencing with Section 10359), and 5a (commencing with Section 10369.1), and shall promulgate rules governing the use of those provisions, incorporating the substance, insofar as applicable, of the corresponding rules contained in this chapter for the use of the provisions set forth in Articles 4, 4a, 5, and 5a. However, as of January 1, 1957, the promulgation of provisions and rules governing their use incorporating in substance the applicable provisions of Articles 3 (commencing with Section 10309), 4 (commencing with Section 10329), and 5 (commencing with Section 10359) shall cease to be effective, and on and after January 1, 1957, only the promulgation of provisions and rules governing their use incorporating in substance the applicable provisions of Articles 3a (commencing with Section 10320), 4a (commencing with Section 10350), and 5a (commencing with Section 10369.1) shall be effective. The commissioner may from time to time thereafter change any such provisions or rules governing their use previously promulgated by him or her. The promulgation of any such provisions or rules governing their use and of any changes or amendments thereof shall be in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1985, Ch. 106, Sec. 96.)

article: 1. Scope of Chapter and Definitions


text: Without affecting the applicability or degree of applicability of other sections of this chapter, it is hereby specified that the provisions of Sections 10321, 10325, 10401, of subdivisions (a), (c), (e), (h) and (i) of Section 10320, of subdivision (a) of Section 10290, of paragraphs (2), (3), (4), (5), (6), (7), (8), (9), (10), (11) and (12) of subdivision (b) and subdivisions (e), (f), (g), (h), (i), and (k) of Section 10291.5 and of Section 10291.6, shall not apply to group disability insurance. The provisions of Section 10401 shall not apply to family expense disability insurance; provided, there is no discrimination between families of the same class.

history: (History: Amended by Stats. 1995, Ch. 94, Sec. 1. Effective January 1, 1996.)

article: 1. Scope of Chapter and Definitions


text:
Selected group disability insurance is that form of disability insurance conforming to the following conditions:

(a) Written under individual policies

(1) Issued to not less than three employees of the federal or state government, or of any federal or state agency, political subdivision or district, or of any public, governmental, or municipal corporation, or of any unit, agency, or department thereof, or of any corporation, copartnership or individual employer; or

(2) Issued to not less than three members of any association, which shall have been in existence for at least two years, having a constitution and bylaws and formed and continuously maintained in good faith for purposes other than that of obtaining insurance; and

(3) For amounts of insurance based upon individual selection by the insured employee or member, as the case may be.

(b) Notwithstanding the provisions of Section 10401 insurers may be permitted to file (for use in connection with selected group disability insurance), rate schedules that reflect a differential from the rates charged for identical policies issued on the individual basis, provided they do not make or permit any discrimination between selected groups.

history: (History: Amended by Stats. 1987, Ch. 443, Sec. 2.)

article: 1. Scope of Chapter and Definitions


text:
Group disability policies may provide, among other things, that the benefits payable thereunder are subject to reduction if the individual insured has any other coverage (other than individual policies or contracts) providing hospital, surgical or medical benefits, whether on an indemnity basis or a provision of service basis, resulting in such insured being eligible for more than 100 percent of the covered expenses.

Except as permitted by this section and by Section 10323, 10369.5, 10369.6, or 11515.5, and except in the case of group practice prepayment plan contracts which do not provide for coordination of benefits, to the extent they provide for a reduction of benefits on account of other coverage with respect to emergency services that are not obtained from providers that contract with the plan, no group or individual disability insurance policy or service contract issued by nonprofit hospital service plans operating under Chapter 11A (commencing with Section 11491) of Part 2 of Division 2 shall limit payment of benefits by reason of the existence of other insurance or service coverage.

The policy provisions authorized by this section shall contain a provision that payments of funds may be made directly between insurers and other providers of benefits. Such policy provisions shall also contain a provision that if benefits are provided in the form of services rather than cash payments the reasonable cash value of each service rendered shall be deemed to be both an allowable expense and a benefit paid. The reasonable cash value of any contractual benefit provided to the insured in the form of service rather than cash payment by or through any hospital service organization or medical service organization or group-practice prepayment plan shall be deemed an expense incurred by the insured for such service, whether or not actually incurred, and the liability of the insurer shall be the same as if the insured had not been entitled to any such service benefit, unless the policy contains a provision authorized by Section 10323, 10369.5 or 10369.6 in the case of an individual disability policy, or by this section, in the case of a group disability policy.

This section shall not be construed to require that benefits payable under group disability policies be subject to reduction by the benefit amounts payable under Chapter 3 (commencing with Section 2800) of Part 2 of Division 1 of the Unemployment Insurance Code.

The provisions of this section, and all regulations adopted pursuant thereto pertaining to coordination of benefits with other group disability benefits, shall apply to all employers, labor-management trustee plans, union welfare plans (including those established in conformity with 29 U.S.C. Sec. 186), employer organization plans or employee benefit organization plans, health care service plan contracts, pursuant to regulations adopted by the Director of the Department of Managed Health Care which shall be uniform with those issued under this section for those plans that elect to coordinate benefits, group practice, individual practice, any other prepayment coverage for medical or dental care or treatment, and administrators, within the meaning of Section 1759 not otherwise subject to the provisions of this section whenever such plan, contract or practice provides or administers hospital, surgical, medical or dental benefits to employees or agents who are also covered under one or more additional group disability policies which are subject to this section or health care service plans.

history: (History: Amended by Stats. 2000, Ch. 857, Sec. 66. Effective January 1, 2001.)

article: 1. Scope of Chapter and Definitions


text: The term “individual policies or contracts,” as used in the first paragraph of Section 10270.98, does not include selected group disability policies or contracts, unless those policies or contracts are noncancelable or guaranteed renewable and solely provide hospital confinement indemnity or specified disease coverage.

history: (History: Amended by Stats. 1987, Ch. 336, Sec. 1.)

article: 1. Scope of Chapter and Definitions


text:
Another permitted form of group disability insurance is that which conforms to all of the following conditions.

(1) Covering debtors who are or become obligated to repay an indebtedness in substantially equal installments, or to repay a portion of an indebtedness in substantially equal installments over a year or more and repay a final balance in any amount on a date certain thereafter, to one creditor, as “creditor” is defined in subdivision (3) of Section 779.2.

(2) The group numbers not less than 10 new entrants yearly.

(3) The amounts insured on any one debtor do not exceed those permitted by Section 779.4.

(4) The policy is issued upon application of and made payable to the creditor or his successor in interest and such alternate beneficiaries as are required by Article 5.9 (commencing with Section 779.1) of Chapter 1 of Part 2 of Division 1, and the premiums are paid by or through the creditor.

A policy issued under this section shall conform to all applicable provisions of this code.

history: (History: Amended by Stats. 1969, Ch. 422.)

article: 1. Scope of Chapter and Definitions


text:
Except as provided in Section 10195 with respect to regulation of group Medicare supplemental insurance, and provisions of law regulating group long-term care insurance, no certificate of group disability insurance advertised or marketed to persons in this state shall be issued or delivered on or after January 1, 1989, to any person 55 years of age or older in this state pursuant to a group master insurance policy issued or delivered in another state unless the certificate and master policy have been filed with, and approved by, the commissioner.

This section does not apply to policies issued to one or more employers or labor organizations, or to the trustees of funds established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or combination thereof, or for members or former members, or combination thereof, of the labor organization.

The commissioner shall adopt regulations necessary to interpret and implement this section.

history: (History: Added by Stats. 1988, Ch. 1322, Sec. 1.)

article: 1. Scope of Chapter and Definitions