Insurance Code — Part 1 | INS — United States — California law | Esheria

Insurance Code

Part 1 of 23 · provisions 1–200

This section says the act is known as the Insurance Code.

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This section defines “underwriters’ corps” for this chapter. This chapter must not impair or interfere with the powers or duties of a municipality’s regular fire department. An owner of property cannot treat an underwriters’ corps act as a justification for abandoning the property. Certain domestic insurance-underwriter corporations may maintain an underwriter’s corps at their own expense if they meet the stated fire-prevention and local-business conditions. An underwriter’s corps may enter certain burning or fire-exposed buildings and may remove or protect property from fire or water damage while a fire is happening and immediately after.

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Provisions of Insurance Code

Showing 200 of 4,461

  1. 1.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    This section says the act is known as the Insurance Code.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 1. This act shall be known as the Insurance Code. (Enacted by Stats. 1935, Ch. 145.)
  2. 10.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    This section defines “section,” “subdivision,” and “subsection” for this code, unless another statute or section is specifically mentioned.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 10. “Section” means a section of this code unless some other statute is specifically mentioned and “subdivision” or “subsection” means a subdivision or subsection of the section in which that term occurs unless some other section is expressly mentioned. (Amended by Stats. 1955, Ch. 471.)
  3. 100.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    This section divides insurance in this state into listed classes such as life, fire, marine, liability, workers’ compensation, and automobile.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 100. Insurance in this state is divided into the following classes: (1) Life. (2) Fire. (3) Marine. (4) Title. (5) Surety. (6) Disability. (7) Plate glass. (8) Liability. (9) Workers’ compensation. (10) Common carrier liability. (11) Boiler and machinery. (12) Burglary. (13) Credit. (14) Sprinkler. (15) Team and vehicle. (16) Automobile. (17) [Reserved] (18) Aircraft. (19) Mortgage guaranty. (19.5) Insolvency. (19.6) Legal insurance. (20) Miscellaneous. (Amended by Stats. 2012, Ch. 786, Sec. 3. (AB 2303) Effective January 1, 2013.)
  4. 10020.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Scope of Chapter and Definitions [10020 - 10022] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines “underwriters’ corps” for this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Scope of Chapter and Definitions [10020 - 10022] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10020. As used in this chapter, an underwriters’ corps means a corps of men with proper officers and equipment, maintained to discover and prevent fires and save life and property from fire. (Enacted by Stats. 1935, Ch. 145.)
  5. 10021.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Scope of Chapter and Definitions [10020 - 10022] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This chapter must not impair or interfere with the powers or duties of a municipality’s regular fire department.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Scope of Chapter and Definitions [10020 - 10022] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10021. This chapter shall not impair or interfere with the powers or duties of the regular fire department of any municipality. (Enacted by Stats. 1935, Ch. 145.)
  6. 10022.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Scope of Chapter and Definitions [10020 - 10022] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An owner of property cannot treat an underwriters’ corps act as a justification for abandoning the property.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Scope of Chapter and Definitions [10020 - 10022] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10022. Any act of an underwriters’ corps shall not justify any owner of any property in abandoning such property. (Enacted by Stats. 1935, Ch. 145.)
  7. 10040.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Formation and Organization [10040- 10040.] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Certain domestic insurance-underwriter corporations may maintain an underwriter’s corps at their own expense if they meet the stated fire-prevention and local-business conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Formation and Organization [10040- 10040.] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10040. Any domestic corporation of insurance underwriters, organized to discover and prevent fires and save life and property from fire and doing business within any municipal corporation of this State, may at its own expense maintain an underwriter’s corps. (Enacted by Stats. 1935, Ch. 145.)
  8. 10050.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Powers [10050 - 10052] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An underwriter’s corps may enter certain burning or fire-exposed buildings and may remove or protect property from fire or water damage while a fire is happening and immediately after.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Powers [10050 - 10052] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10050. For the effective discharge of such duties, an underwriter’s corps may enter any burning building or any building in which property is burning, or any building such corps or any officer thereof deems to be immediately exposed to an existing fire or in danger of taking fire from a burning building, and may remove or otherwise protect any property from fire or damage by water during and immediately after such fire. (Enacted by Stats. 1935, Ch. 145.)
  9. 10051.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Powers [10050 - 10052] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A corporation, with its officers and corps, has the same right of way as the municipality’s regular fire department when going to a fire with its equipment, except as against that fire department.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Powers [10050 - 10052] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10051. Such corporation, with its officers and corps, when going to a fire with its equipment, has the same right of way as the regular fire department of the municipality in which such corporation is operating, except as to such fire department. (Enacted by Stats. 1935, Ch. 145.)
  10. 10052.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Powers [10050 - 10052] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A corporation covered by this section is subject to the same local ordinances, state laws, and penalties that protect fire department equipment and property.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Powers [10050 - 10052] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10052. All ordinances passed by the municipal authorities of any city or town wherein such a corporation carries on business, and all laws of this State applicable to such municipality which provide for the punishment of any person or persons wilfully or carelessly obstructing the progress of the apparatus of the fire department of such municipality while going to a fire, or of any person or persons wilfully or carelessly injuring any animal or property of said fire department, shall likewise apply to such corporation to the same extent as to such fire department. Such laws and ordinances and their penalties, may be enforced in the same courts and in the same manner, and with equal force and effect in the case of such corporation as in the case of the fire department. (Enacted by Stats. 1935, Ch. 145.)
  11. 10070.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Every corporation created for the purpose specified in this chapter must hold a meeting each July.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10070. In July of every year, there shall be held a meeting of every corporation created for the purpose specified in this chapter. (Enacted by Stats. 1935, Ch. 145.)
  12. 10071.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The corporation must publish ten days’ notice of the meeting in at least one daily newspaper in the municipality where it is established.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10071. Ten days’ notice of the meeting shall be inserted in at least one daily newspaper published in the municipality in which the corporation is established. (Enacted by Stats. 1935, Ch. 145.)
  13. 10072.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    At the meeting, each qualifying insurer or insurance agent has a right to be represented and gets one vote.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10072. At such meeting each insurer or insurance agent, doing a fire insurance business in the municipality, whether a member of the corporation or not, has a right to be represented and is entitled to one vote. (Enacted by Stats. 1935, Ch. 145.)
  14. 10073.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A majority of those represented may decide whether to sustain the fire patrol and set the maximum expenses for the next fiscal year.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10073. A majority of the whole number so represented may decide the question of sustaining the fire patrol organized by the corporation and may fix the maximum amount of expenses to be incurred therefor during the ensuing fiscal year. (Enacted by Stats. 1935, Ch. 145.)
  15. 10074.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Assessment expenses for fire insurance underwriters cannot exceed 2% of aggregate premiums, and the necessary amount may be assessed on insurers or insurance agents in the municipality.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10074. The amount of expense so fixed shall not exceed two per cent of the aggregate premiums returned as received, as provided in section 10076. The whole of such amount, or so much thereof as is necessary, may be assessed upon all insurers or insurance agents who assume risks or accept premiums for fire insurance in said municipality. Such assessment shall be made in proportion to the several amounts of premiums returned as received by each in the statement required by section 10076. (Enacted by Stats. 1935, Ch. 145.)
  16. 10075.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The corporation may collect the assessment in court in its own name.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10075. Such assessment is collectible by and in the name of the corporation, in any court of competent jurisdiction, in such manner and at such time or times as the corporation determines. (Enacted by Stats. 1935, Ch. 145.)
  17. 10076.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The corporation may require certain persons to provide a semiannual statement of premiums received for insuring property in the municipality.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10076. In order to pay persons employed by the corporation, and to maintain apparatus for saving life and property and suitable quarters the corporation may require a statement to be furnished, semiannually, by all persons mentioned in section 10074, setting forth the aggregate amount of premiums received for insuring property in the municipality during the six months next preceding July first and January first, respectively, of each year. (Enacted by Stats. 1935, Ch. 145.)
  18. 10077.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Statements must be sworn to and delivered to the corporation’s secretary within ten days after July 1 and January 1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10077. Each statement shall be under oath and shall be handed to the secretary of the corporation within ten days after each first day of July and each first day of January. A statement covering the receipts of a natural person shall be sworn to by the person whose receipts it covers. Otherwise the statement shall be sworn to by the president, secretary or agent of the person whose receipts it covers. (Enacted by Stats. 1935, Ch. 145.)
  19. 10078.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The corporation’s secretary must, within ten days, send a written demand for statements from every person assessable under this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10078. The secretary of such corporation shall, within the prescribed ten days, by written demand signed by him, require the statement from every person assessable under this chapter. (Enacted by Stats. 1935, Ch. 145.)
  20. 10079.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A person required to provide the statement, or that person’s officer, can be fined if they do not render the statement within 15 days after demand.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10079. The demand may be delivered personally at the office of every person required to furnish the statement. Every such person, or officer thereof, who, for fifteen days after said demand, neglects to render the statement forfeits fifty dollars for the use of the corporation, and also forfeits for its use twenty-five dollars in addition for every day such neglect is continued after the expiration of the fifteen days. Such additional penalty may be computed and collected up to the time of the trial of any action brought for its recovery. (Enacted by Stats. 1935, Ch. 145.)
  21. 10080.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The corporation may file an action in a court of competent jurisdiction to recover the penalty and costs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Underwriters Fire Patrols [10020 - 10080] ( Chapter 8 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Meetings and Assessments [10070 - 10080] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10080. The corporation may bring action to recover such penalty, with costs, in any court of competent jurisdiction. (Enacted by Stats. 1935, Ch. 145.)
  22. 10081.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    An insurer may not issue, deliver, or initially renew a residential property insurance policy in this state unless the named insured is offered earthquake coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10081. No policy of residential property insurance may be issued or delivered or, with respect to policies in effect on the effective date of this chapter, initially renewed in this state by any insurer unless the named insured is offered coverage for loss or damage caused by the peril of earthquake as provided in this chapter. That coverage may be provided in the policy of residential property insurance itself, either by specific policy provision or endorsement, or in a separate policy or certificate of insurance which specifically provides coverage for loss or damage caused by the peril of earthquake alone or in combination with other perils. (Added by Stats. 1984, Ch. 916, Sec. 1.)
  23. 10082.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    An insurer must include earthquake coverage in the required offer, and that coverage must follow the insurer’s rules and rating plan and the minimum coverages in Section 10089.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10082. (a) The offer required by Section 10081 shall include coverage against risk of loss or damage from the peril of earthquake, in accordance with the minimum coverages required by subdivisions (a) and (b) of Section 10089. (b) The earthquake coverage shall be in accordance with the insurer’s rules and rating plan, provided, however, that nothing contained in this chapter shall require an insurer to issue a policy of residential property insurance except in accordance with the insurer’s usual underwriting standards. However, those standards shall not permit an insurer to provide a policy of residential property insurance unless the offer of coverage required by this chapter is made. (Amended by Stats. 1996, Ch. 124, Sec. 77. Effective January 1, 1997.)
  24. 10082.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    This section sets claim-handling rules for covered property and earthquake insurance policies, including notice, proof of loss, document access, appraisal, and adjuster status reports.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10082.3. Notwithstanding any other provision of law, the following provisions regarding loss requirements, appraisals, and adjusters shall apply to the following types of policies originated or renewed on and after January 1, 2002: all policies of residential property insurance, as defined in Section 10087, all policies, endorsements, or certificates of insurance providing coverage for loss or damage caused by the peril of earthquake issued pursuant to this chapter; and all policies of basic residential earthquake insurance issued pursuant to Chapter 8.6 (commencing with Section 10089.5). Requirements in case loss occurs The insured shall give written notice to this company of any loss without unnecessary delay, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, furnish a complete inventory of the destroyed, damaged and undamaged property, showing in detail quantities, costs, actual cash value and amount of loss claimed; and within 60 days after the loss, unless the time is extended in writing by this company, the insured shall render to this company a proof of loss, signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: the time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereto, all encumbrances thereon, all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this policy, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of loss and whether or not it then stood on leased ground, and shall furnish a copy of all the descriptions and schedules in all policies and, if required and obtainable, verified plans and specifications of any building, fixtures or machinery destroyed or damaged. The insured, as often as may be reasonably required and subject to the provisions of Section 2071.1, shall exhibit to any person designated by this company all that remains of any property herein described, and submit to examinations under oath by any person named by this company, and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by this company or its representative, and shall permit extracts and copies thereof to be made. The insurer shall inform the insured that tax returns are privileged against disclosure under applicable state law but may be necessary to process or determine the claim. The insurer shall notify every claimant that they may obtain, upon request, copies of claim-related documents. For purposes of this section, “claim-related documents” means all documents that relate to the evaluation of damages, including, but not limited to, repair and replacement estimates and bids, appraisals, scopes of loss, drawings, plans, reports, third party findings on the amount of loss, covered damages, and cost of repairs, and all other valuation, measurement, and loss adjustment calculations of the amount of loss, covered damage, and cost of repairs. However, attorney work product and attorney-client privileged documents, and documents that indicate fraud by the insured or that contain medically privileged information, are excluded from the documents an insurer is required to provide pursuant to this section to a claimant. Within 15 calendar days after receiving a request from an insured for claim-related documents, the insurer shall provide the insured with copies of all claim-related documents, except those excluded by this section. Nothing in this section shall be construed to affect existing litigation discovery rights. Appraisal In case the insured and this company shall fail to agree as to the actual cash value or the amount of loss, then, on the written request of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of the request. Where the request is accepted, the appraisers shall first select a competent and disinterested umpire; and failing for 15 days to agree upon the umpire, then, on request of the insured or this company, the umpire shall be selected by a judge of a court of record in the state in which the property covered is located. Appraisal proceedings are informal unless the insured and this company mutually agree otherwise. For purposes of this section, “informal” means that no formal discovery shall be conducted, including depositions, interrogatories, requests for admission, or other forms of formal civil discovery, no formal rules of evidence shall be applied, and no court reporter shall be used for the proceedings. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him or her and the expenses of appraisal and umpire shall be paid by the parties equally. In the event of a government-declared disaster, as defined in the Government Code, appraisal may be requested by either the insured or this company but shall not be compelled. Adjusters If, within a six-month period, the company assigns a third or subsequent adjuster to be primarily responsible for a claim, the insurer, in a timely manner, shall provide the insured with a written status report. For purposes of this section, a written status report shall include a summary of any decisions or actions that are substantially related to the disposition of a claim, including, but not limited to, the amount of losses to structures or contents, the retention or consultation of design or construction professionals, the amount of coverage for losses to structures or contents and all items of dispute. (Added by Stats. 2001, Ch. 583, Sec. 6. Effective January 1, 2002.)
  25. 10082.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    If a dwelling is later brought into compliance with the listed earthquake retrofit requirements, the insurer may not keep charging the related additional earthquake premium or deductible, and the insured must submit an approved inspection record to verify the retrofit work.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10082.5. (a) If an insurer subject to this chapter charges an additional earthquake insurance premium or deductible because a dwelling fails to comply with paragraph (1), (2), or (3) and the dwelling is subsequently brought into compliance with any one of these paragraphs, then the additional premium or deductible attributed to noncompliance shall not be charged. (1) Compliance with Section 19215 of the Health and Safety Code for the bracing, anchoring, or strapping of all water heaters to resist falling or horizontal displacement due to earthquake motion. (2) Compliance with the foundation anchor bolt requirements of the 2007 edition of the California Building Standards Code as specified in Title 24 of the California Code of Regulations, or a successor edition of that code, or with any local government modifications to those requirements. (3) Compliance with the bracing requirements for cripple walls of the 2007 edition of the California Building Standards Code as specified in Title 24 of the California Code of Regulations, or a successor edition of that code, or with any local government modifications to those requirements. (b) A copy of the approved inspection record for the building permit for work performed pursuant to this section shall be submitted by the insured to the insurer in order to verify that retrofits performed pursuant to this section have been performed. The additional premium or deductible paid shall be refunded to the insured and prorated as of the date the approved inspection record is received by the insurer. (Amended by Stats. 2016, Ch. 86, Sec. 202. (SB 1171) Effective January 1, 2017.)
  26. 10083.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    Insurers must offer earthquake coverage for residential property insurance and follow specified notice, timing, and content rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10083. (a) The offer of coverage required by Section 10081 may be made prior to, concurrent with, or within 60 days following the issuance or renewal of a residential property insurance policy. If the offer of coverage is mailed to the named insured or applicant, it shall be mailed to the mailing address shown on the policy of residential property insurance or on the application. (1) If the offer is made by a nonparticipating insurer as defined in Section 10089.5, the offer of earthquake coverage shall contain all of the following language in at least 10-point boldface type: “Your residential property insurance policy does not cover earthquake damage to your home or its contents. To cover earthquake damage to your home and its contents you need to purchase a separate earthquake insurance policy. The coverage provided by an earthquake insurance policy is different from, and typically more limited than, the coverage provided by your residential property insurance policy. California law requires insurance companies to offer earthquake insurance in conjunction with a residential property insurance policy. If you do not accept the offer of earthquake insurance below within 30 days of the mailing of this notice, your insurance company shall presume that you have not accepted this offer of earthquake insurance. You may purchase earthquake insurance coverage on the following terms: (A) Amount of Dwelling/Building Coverage Limit: _______________ (B) Deductible: ______________ (C) Contents Coverage Limit: _______________ (D) Additional Living Expenses Coverage Limit: _____________ (E) Estimated Annual Premium:_______________ The deductible represents the amount of damage your covered property must incur before the earthquake insurance coverage begins. If your covered loss is less than the applicable deductible, you may not receive any payment. Contact your insurance agent or your insurance company to obtain details regarding this offer of earthquake insurance and other coverage options.” (2) If the offer is made by a participating insurer as defined by Section 10089.5, the offer of earthquake coverage shall contain all of the following language in at least 10-point boldface type: “Your residential property insurance policy does not cover earthquake damage to your home or its contents. To cover earthquake damage to your home and its contents you need to purchase a separate earthquake insurance policy. The coverage provided by an earthquake insurance policy is different from, and typically more limited than, the coverage provided by your residential property insurance policy. California law requires insurance companies to offer earthquake insurance in conjunction with a residential property insurance policy. If you do not accept the offer of earthquake insurance below within 30 days of the mailing of this notice, your insurance company shall presume that you have not accepted this offer of earthquake insurance. You may purchase earthquake insurance coverage on the following terms: (A) Amount of Dwelling/Building Coverage Limit: _______________ (B) Deductible: ______________ (C) Contents Coverage Limit: _______________ (D) Additional Living Expenses Coverage Limit: _____________ (E) Estimated Annual Premium:_______________ The deductible represents the amount of damage your covered property must incur before the earthquake insurance coverage begins. If your covered loss is less than the applicable deductible, you may not receive any payment. If you choose not to accept this offer within the 30-day period, you may apply for earthquake coverage at a later date. Your insurance company contracts with the California Earthquake Authority (CEA) to offer earthquake insurance to its customers. For an additional premium, you can choose CEA coverage options such as higher limits for Contents or Additional Living Expenses, increased building code upgrade limits, or a lower deductible. You can also choose to buy certain CEA coverages separately. Contact your insurance agent or your insurance company to obtain details regarding this offer of earthquake insurance and other coverage options.” (b) If the offer of earthquake coverage made pursuant to Section 10081 is not accepted, the insurer or any affiliated insurer shall be required on an every other year basis to offer earthquake coverage in connection with any continuation, renewal, or reinstatement of the policy following any lapse thereof, or with respect to any other policy that extends, changes, supersedes, or replaces the policy of residential property insurance. (c) The offer may contain additional provisions not in conflict with or in derogation of this section. (d) The commissioner may approve modifications to the language prescribed in subdivision (a) only if all of the following conditions are met: (1) The modifications are not in conflict with or in derogation of any provision of this section or Section 10089. (2) The modifications accurately describe the coverage provided by the policy being offered. (3) The modifications are strictly limited to necessary changes so that the modified offer is otherwise identical to the offer prescribed in subdivision (a). (e) Use of the language prescribed by this section, or modified language approved pursuant to subdivision (d), shall constitute compliance with the requirements of Section 10081 by an insurer subject thereto. (f) (1) If an insurer issues or causes to be issued a policy with earthquake coverages other than the coverages specified in subdivisions (a) and (b) of Section 10089, pursuant to a rate application approved by the commissioner in accordance with subdivision (c) of Section 10089, no further or other offer of earthquake coverage as specified in subdivisions (a) and (b) of Section 10089 and no further or other notice of noncoverage is required by the insurer if both of the following apply: (A) A renewal of that policy is offered. (B) A written notice is provided with that renewal regarding additional earthquake coverage that is available. (2) The form of the written notice in paragraph (1) shall be filed with the commissioner at least 30 days before its first use. The form shall not be used if the commissioner disapproves the form of the written notice within that period for being misleading or incomplete. (g) This section shall become operative on January 1, 2019. (Amended (as amended by Stats. 2014, Ch. 427, Sec. 2.5) by Stats. 2016, Ch. 549, Sec. 2. (AB 499) Effective January 1, 2017. Section operative January 1, 2019, by its own provisions.)
  27. 10084.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    An insurer that issues or delivers residential property insurance in this state may comply with Section 10081 by using one of three earthquake-coverage arrangements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10084. An insurer which issues or delivers a policy of residential property insurance in this state may comply with the provisions of Section 10081 in any of the following ways: (a) By offering to underwrite directly the risk of loss or damage caused by peril of earthquake. (b) By arranging for earthquake coverage to be offered by an affiliated insurer. (c) By arranging for the coverage to be offered through an insurance agent or broker under a policy or certificate of insurance issued by a nonaffiliated insurer. (Added by Stats. 1984, Ch. 916, Sec. 1.)
  28. 10085.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    If the insurer proves the required offer was mailed or delivered, and the named insured does not accept earthquake coverage within 30 days, the law treats that as a conclusive election not to accept the coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10085. If the insurer establishes proof of mailing or delivery of the required offer and the offer of earthquake coverage is not accepted by the named insured within 30 days from the date of mailing or delivery of the offer, there shall be a conclusive presumption that the named insured elected not to accept the coverage. An election, actual or presumed, by any named insured shall be binding upon any other person insured or any other party having an insurable interest in the insured property. (Added by Stats. 1984, Ch. 916, Sec. 1.)
  29. 10086.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    If earthquake coverage is accepted, the insurer must continue it under the applicable rates and conditions for the policy term unless the residential policy is terminated. On renewal, the insurer may change the policy if minimum earthquake coverages are still met, but reduced or substantially different coverage triggers extra renewal notice documents. The commissioner must approve the renewal-offer form, and the named insured may terminate earthquake coverage at any time.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10086. (a) If an offer of earthquake coverage, made pursuant to Section 10081, is accepted, the coverage shall be continued at the applicable rates and conditions for the policy term, provided the policy of residential property insurance is not terminated by the named insured or insurer. (1) At any renewal, an insurer may modify the terms and conditions of an existing policy, rider, or endorsement providing coverage against loss or damage caused by the peril of earthquake if the modified terms and conditions provide the minimum coverages required by Section 10089. (2) If the modification referenced in paragraph (1) reduces or substantially differs from the coverage previously provided, an insurer shall provide the insured with the renewal offer required by Section 10083 and a stand-alone document stating the changes in the terms and conditions of the insured’s existing policy, rider, or endorsement. (A) Before July 1, 2020, the stand-alone document shall include the following statement in 14-point boldface type: “THE COVERAGE IN THE POLICY WE ARE OFFERING YOU WITH THIS RENEWAL HAS BEEN REDUCED, AND SUBSTANTIALLY DIFFERS FROM THE COVERAGES PROVIDED BY YOUR HOMEOWNERS’ POLICY. INSURANCE COMPANIES ARE ALLOWED TO RENEW EARTHQUAKE INSURANCE POLICIES WITH COVERAGE THAT IS REDUCED FROM THE COVERAGE YOU PREVIOUSLY PURCHASED. YOU MAY REQUEST A SAMPLE COPY OF THIS NEW POLICY TO REVIEW PRIOR TO MAKING A DECISION TO ACCEPT THIS RENEWAL, AND WE WILL MAIL OR DELIVER IT TO YOU WITHIN 14 DAYS OF YOUR REQUEST. A REQUEST FOR THE SAMPLE COPY SHALL NOT CHANGE OR EXTEND THE POLICY EXPIRATION DATE SPECIFIED IN THE RENEWAL NOTICE. A SUMMARY OF THE CHANGES IS INCLUDED WITH THIS NOTICE.” (B) On and after July 1, 2020, the stand-alone document shall include the following statement in 14-point boldface type: ## “IMPORTANT NOTICE: • The extent of the coverage for earthquake damage has been reduced or substantially changed in this renewal. • You may request a sample copy of this renewal policy for your review prior to making your decision to renew. • We will mail or deliver that sample copy to you within 14 days. However, your renewal date will not be extended or changed. • A summary of the changes to your coverage is included with this notice. • Be aware that your earthquake coverage may have different limits, deductibles, and other limitations than your homeowners’ policy.” (3) The commissioner shall approve the form of the offer of renewal at the time the commissioner approves the policy. The offer of renewal shall include the information contained in subdivision (a) of Section 10083, and may be included with the renewal notice in standard type. (4) The commissioner may approve a substantially similar form of the offer of renewal if necessary to accurately disclose relevant information to the policyholder. (b) This section does not preclude the named insured from terminating the earthquake coverage at any time. (Amended by Stats. 2019, Ch. 201, Sec. 10. (AB 1813) Effective January 1, 2020.)
  30. 10086.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    If earthquake coverage was offered but not accepted, the insurer must tell the named insured that the policy does not cover earthquake damage, and the notice must be given before or with renewal of residential property insurance on an every-other-year basis.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10086.1. (a) Where the offer of earthquake coverage has not been accepted, the insurer shall notify the named insured that the policy does not provide that coverage. After the offer on an every other year basis, the notice of noncoverage shall be provided prior to or concurrent with the renewal of the policy of residential property insurance. This section shall not affect any other provisions of this chapter nor shall it affect coverage under the policy of residential property insurance. (b) No further or other notice of noncoverage is required pursuant to subdivision (a) for policies subject to subdivision (f) of Section 10083, and the insurer has complied with the conditions of subdivision (f) of Section 10083. (Amended by Stats. 2014, Ch. 427, Sec. 3. (AB 2735) Effective January 1, 2015.)
  31. 10086.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    Insurers may not refuse, reject, or cancel residential property insurance solely because an insured accepted earthquake coverage, except if the named insured terminates the policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10086.5. (a) The Legislature hereby finds and declares that the continued regulation of the business practices of insurers and their products is in the interest of the citizens of the state and that the control and limitation of unlawful nonrenewal, rejection, or cancellation of residential property insurance after an offer of earthquake coverage is accepted is an essential component of that regulation which is necessary to effectuate an adequate and complete system and regulation of insurer and producer business practices. The Legislature finds that this chapter continues to provide critical protection to insureds in this state from the numerous consequences that would occur in the absence of that regulation. (b) An insurer shall not refuse to renew, reject, or cancel a policy of residential property insurance after an offer of earthquake coverage is accepted solely because the insured has accepted that offer of earthquake coverage, except in cases in which the policy is terminated by the named insured. (c) Underwriting standards applicable to residential property insurance shall not be applied in a discriminatory fashion against any person who accepts or elects to continue earthquake coverage. (Amended by Stats. 1990, Ch. 1526, Sec. 1.)
  32. 10087.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    This section defines “policy of residential property insurance” and says certain policies are excluded. It also creates conclusive presumptions for mailing or hand delivery of required offers, disclosures, or documents.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10087. (a) (1) As used in this chapter, “policy of residential property insurance” means a policy insuring individually owned residential structures of not more than four dwelling units, individually owned condominium units, or individually owned mobilehomes, and their contents, located in this state and used exclusively for residential purposes or a tenant’s policy insuring personal contents of a residential unit located in this state. (2) “Policy of residential property insurance,” does not include any of the following: (A) Insurance for real property or its contents used for any commercial, industrial, or business purpose, except a structure of not more than four dwelling units rented for individual residential purposes. (B) A policy that does not include any of the perils insured against in a standard fire policy. (C) A policy that provides, or is construed to provide, any coverage or indemnity for the payment of any fine, penalty, or restitution in any criminal, civil, or administrative action or proceeding, or any coverage or indemnity for the payment of any loss or liability, arising from the operation of either a recovery residence, as defined in Section 11833.05 of the Health and Safety Code, or an alcoholism or drug abuse recovery or treatment facility, as defined in Section 11834.02 of the Health and Safety Code. This subparagraph shall apply to policies issued, renewed, or amended on or after January 1, 2022. (3) (A) Subparagraph (C) of paragraph (2) does not prohibit a recovery residence that is managed by its residents and operates on a not-for-profit basis from obtaining coverage under a policy of residential property insurance. (B) For purposes of subparagraph (A), a recovery residence operates on a not-for-profit basis if it satisfies all of the following: (i) It does not accept or require valuable consideration from or on behalf of residents other than a pro rata share of living expenses. (ii) It is not owned by, or under contract with, an alcoholism or drug abuse recovery or treatment facility, as defined in Section 11834.02 of the Health and Safety Code. (iii) It is not owned by, or under contract with, an affiliate, contractor, or intermediary of an alcoholism or drug abuse recovery or treatment facility, as defined in Section 11834.02 of the Health and Safety Code. (b) Proof of mailing of any offer, disclosure, or document required to be delivered by this chapter by first-class mail addressed to a named insured or applicant at the mailing address shown on the policy or application shall create a conclusive presumption that the offer was made or that the disclosure or document was delivered as required. If an offer, disclosure, or document required to be delivered by this chapter is not mailed, but is hand delivered to the insured, the insured’s signed receipt creates a conclusive presumption that the offer was provided or that the disclosure or document was delivered as required. (Amended by Stats. 2021, Ch. 443, Sec. 3. (AB 1158) Effective January 1, 2022.)
  33. 10087.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    This section requires certain earthquake-insurance policy and advertisement disclosures, and directs the commissioner to issue a bulletin on the disclosure language.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10087.5. (a) Every policy of residential property insurance which provides coverage for loss or damage to a structure from the peril of earthquake, but that provides for an uninsured deductible amount computed as a percentage, shall clearly disclose on the page setting forth the policy declarations the basis upon which the percentage is computed. This disclosure shall be printed in at least 10-point bold typeface. (b) Every advertisement for a policy subject to subdivision (a) shall clearly disclose the deductible by stating the applicable percentage and the basis upon which the percentage is computed. (c) Every policy of residential property insurance or policy endorsement covering an individual condominium unit for loss or damage from the peril of earthquake shall disclose on the policy declarations page, in at least 10-point bold typeface, if the policy or endorsement provides no coverage for loss assessment. If the policy or endorsement provides that loss assessment coverage is limited or changed as a result of any provision of the insurance policy or policy endorsement purchased by the corporation or association of property owners, or as a result of an assessment to pay a deductible amount under the corporation or association policy, the nature of the limitation or change shall also be disclosed on the policy declarations page. If because of lack of space or other practical limitations the policy declarations page cannot contain the disclosure required by this subdivision, the disclosure may be placed on the page immediately following the policy declarations page and shall be printed in at least 12-point bold typeface. Nothing in this subdivision shall be construed to require an insurer to provide a disclosure for loss assessment if the only limitations on loss assessment coverage are the policy limits. (d) The commissioner shall issue a bulletin that specifies the language of the disclosure required by subdivision (c). The commissioner may specify different disclosures to explain more accurately different coverages offered by insurers. (Amended by Stats. 1994, Ch. 658, Sec. 1. Effective January 1, 1995.)
  34. 10088.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    A policy that does not cover earthquake risk cannot be treated as covering earthquake-related loss or damage when earthquake is the proximate cause.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10088. Notwithstanding the provisions of Section 530, 532, or any other provision of law, and in the absence of an endorsement or an additional policy provision specifically covering the peril of earthquake, no policy which by its terms does not cover the peril of earthquake shall provide or shall be held to provide coverage for any loss or damage when earthquake is a proximate cause regardless of whether the loss or damage also directly or indirectly results from, or is contributed to, concurrently or in any sequence by any other proximate or remote cause, whether or not covered by the policy. The term “policy” as used in this section includes all policies of any nature, including, but not limited to, business and commercial forms providing coverage against loss due to damage to the property of the insured. Nothing in this section shall operate to affect the provisions of Section 2071 or preclude an insurer from specifically providing coverage for direct loss caused by explosion, theft, or glass breakage resulting from an earthquake. (Added by Stats. 1984, Ch. 916, Sec. 1.)
  35. 10088.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    An insurer is still obligated to cover fire losses caused by or following an earthquake under a fire insurance policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10088.5. Notwithstanding Section 2081, nothing in Section 10088 exempts an insurer from its obligation under a fire insurance policy to cover the losses of a fire which is caused by or follows an earthquake. (Amended by Stats. 1990, Ch. 1166, Sec. 4.)
  36. 10089.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    This section sets minimum earthquake insurance coverage terms, limits deductibles, and lets the commissioner approve certain alternative rate applications.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10089. (a) At a minimum, an offer of coverage of loss or damage caused by the peril of earthquake pursuant to Section 10081 shall include the following coverages: (1) dwelling, not including outbuildings, appurtenant structures, swimming pools, masonry fences and walls not necessary for the structural integrity of the dwelling, walkways and patios not necessary for regular ingress or egress from the dwelling, awnings or other patio coverings, decorative or artistic features including plaster if other covering would be more cost-effective, landscaping, or masonry chimneys, provided that the policy covers replacement of a damaged masonry chimney with a nonmasonry, earthquake resistant chimney. An insurer that provides earthquake coverage for the dwelling that is narrower than coverage provided under the policy of residential property insurance shall, upon approval of the commissioner, establish the premium for the earthquake coverage in a manner that reflects the exclusion of those items not covered by the earthquake policy, rider, or endorsement; (2) contents coverage either in an amount not less than 10 percent of the amount of the covered dwelling loss, or in an amount not less than five thousand dollars ($5,000), provided that if the underlying policy of residential property insurance does not cover structural loss, the amount of contents coverage after deductible shall be not less than five thousand dollars ($5,000). The insurer shall elect at the time the insurer files its rate application with the commissioner which of the two contents coverages it will use to satisfy the requirements of this chapter. Upon election, the option shall be required to be offered to every policyholder who receives an offer of earthquake coverage pursuant to this chapter. In the case of either coverage, the insurer may exclude from coverage glassware, china, porcelain, or ceramic items, artwork, or other decorative items; and (3) additional living expenses of an amount no less than one thousand five hundred dollars ($1,500) to cover expenses while the residential dwelling remains uninhabitable due to physical loss or damage from the peril of earthquake. (b) Coverages provided in paragraphs (1) and (2) of subdivision (a) shall not contain a deductible of more than 15 percent of coverage provided for the dwelling. (c) The commissioner may approve rate applications that allow the insurer to offer policies providing coverage other than the coverage specified in this section provided that at least one coverage offered meets the criteria provided in this section. (d) In the case of a residential dwelling which is not owner occupied, the minimum coverage for additional living expenses may be waived by the applicant or policyholder, provided the insurer gives notice to the applicant or policyholder that coverage for additional living expenses is offered but may be waived, and the waiver is in writing. (Amended by Stats. 1995, Ch. 939, Sec. 4. Effective January 1, 1996.)
  37. 10089.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    Insurers must offer a $10,000 optional coverage package, but only after the insured has finished and the insurer has verified required retrofitting of the residential dwelling, and only if that coverage is not already in the minimum offer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10089.1. To the extent that the coverage is not already provided in the minimum offer of coverage, every insurer shall offer the following optional coverage as part of the offer of coverage as required by Section 10081 only after the insured has completed and the insurer has verified retrofitting of the residential dwelling as described in subdivision (a) of Section 10089.2: Coverage in the amount of ten thousand dollars ($10,000) for the purpose of reconstruction costs required to bring the residential dwelling on the residential property up to required current local residential dwelling building code standards as required by the local entity as part of the approval of the reconstruction permit process after an earthquake. (Added by renumbering Section 10089.15 (as added by Stats. 1990, Ch. 1166) by Stats. 1996, Ch. 967, Sec. 10. Effective September 27, 1996.)
  38. 10089.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority may buy reinsurance and enter capital market contracts only with prior commissioner approval, and its annual spending on those contracts must stay within a reasonable percentage of collected earthquake insurance premiums.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.10. To expand the capacity of the authority and achieve maximum capacity for writing earthquake coverage, the authority shall do both of the following acts, on prior approval of the commissioner: (a) The authority shall purchase contracts of reinsurance at rates and on terms the board considers reasonable and appropriate. (b) The authority, through the Treasurer, shall enter capital market contracts on terms as the board and Treasurer may consider reasonable and appropriate. The Treasurer shall not withhold approval except for good cause related to the purposes of the authority. Such terms may include indemnification and contribution provisions protecting parties to the capital market contracts of the authority against material misstatements in or material omissions from the authority’s official statements and other authority documents referred to in the capital markets contracts. (c) The total annual expenditure for reinsurance contracts and capital market contracts pursuant to this section shall not exceed a reasonable and appropriate percentage of the annual earthquake insurance premiums collected by the authority. (Amended by Stats. 1996, Ch. 967, Sec. 7. Effective September 27, 1996.)
  39. 10089.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The commissioner must adopt emergency regulations to implement this chapter within 60 days, and the authority must make certain ratemaking documents available to the public, with a limited exception for third-party proprietary materials.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.11. (a) The commissioner shall adopt regulations to implement the provisions of this chapter within 60 days of its effective date. The regulations shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (b) Regulations shall specify procedures for ratemaking and forms approval, define the type and quality of investments the authority is authorized to make, define coverage types and limits, set forth producer compensation rates, and specify the procedures to be followed by the authority following any earthquake event where the magnitude of earthquake losses make it likely that prorated benefits may be paid. The regulations shall be consistent with the requirements of Proposition 103. (c) The rights provided by Section 1861.10 shall apply to proceedings under this chapter relating to establishing rates and regulations for earthquake insurance sold by the authority. (d) All materials and documents prepared or used by the authority to determine its rates other than proprietary materials and documents owned or licensed by third parties shall be considered public documents, and copies of the public documents shall be made available to the public for inspection at no charge. Members of the public may purchase public ratemaking related documents from the authority at actual cost. (Amended by Stats. 1996, Ch. 967, Sec. 8. Effective September 27, 1996.)
  40. 10089.12.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The commissioner may examine the authority’s books and records at any time.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.12. The commissioner shall have full power and authority to examine the books and records of the authority at any time, and in connection with the operations and function of the authority, the commissioner shall have the duties and powers set forth in Article 14.5 (commencing with Section 1065.1) of Chapter 1 of Part 2 of Division 1 and in Division 3 (commencing with Section 12900). (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  41. 10089.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must file regular reports about its operations and finances, make them public, and submit extra reports after seismic events.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.13. (a) One year following its commencement of operations, and annually thereafter by each August 1, the authority shall report to the Legislature and the commissioner on program operations in a format prescribed by the commissioner. The report shall include, but shall not be limited to, the financial condition of the authority, a description of all rates and rating plans approved for use in the authority, an evaluation of the functioning of the authority in light of its stated purpose of making residential property insurance and residential earthquake insurance more available. The report shall also include an analysis of the growth by market share of residential property insurance of participating insurers compared to nonparticipating insurers, any adverse consequences on the various insurance distribution systems resulting from the operation of the authority or alterations in the growth of the residential property insurance market share between participating insurers and nonparticipating insurers, any adverse consequences of the various insurance distribution systems resulting from the operation of the authority or alterations in the growth of homeowners’ insurance market share between participating insurers and nonparticipating insurers, and an analysis of any recommended program changes to permit the authority to better fulfill its stated purpose. In making this determination the board shall be mindful of the competitive nature of the market and how any decision can negatively impact insurers who are currently competing in the marketplace. The report shall be posted on the authority’s official Internet Web site. (b) The annual report shall include full information describing the following matters relating to the authority’s condition and affairs: (1) The property or assets held by the authority, including the amount of cash on hand and deposited in banks to its credit, the amount of cash in the hands of servicing insurance companies, the amount of any stocks or bonds owned by the authority, specifying the amount, number of shares, and the par and market value of each kind of stock or bond, and all other assets, specifying each. (2) The liabilities of the authority, including the amount of losses due and unpaid, the amount of claims for losses resisted by the authority and the amount of losses in the process of adjustment or in suspense, including all reported and supposed losses, the amount of revenue bonds or other debt financing issues under Section 10089.29 or Section 10089.50, and all other liabilities. (3) Income of the authority during the preceding year, specifying premiums received, interest money received, and income from all other sources, specifying the source. (4) Expenditures of the authority during the preceding year, specifying the amount of losses paid, the amount of expenses paid by category, and the amount of all other payments and expenditures. (5) The costs and scope of all reinsurance and capital market contracts entered into by the authority under Section 10089.10. (c) As part of the annual report, the authority shall make a separate, summary report on the financial capacity of the authority to pay claims made against the authority. Copies of this report shall also be made available to the public. The report shall include, but shall not be limited to, the following information, valued as of 30 days prior to the date of the report: (1) The available capital of the authority. (2) The liabilities of the authority. (3) The amount of all assessments previously made and the amount of assessments that may be made in the future under Section 10089.23. (4) The amount of the reinsurance under contract and actually available to the authority. (5) The amount of all revenue bonds or other debt financing previously issued or contracted for and the amount of all revenue bonds or other debt financing that may be issued or contracted for in the future under Section 10089.29. (6) The amount of surcharges previously assessed against policyholders and the amount of surcharges that are currently outstanding against policyholders under Section 10089.29. (7) The amount of capital committed and actually available by contract from private capital markets that is available to pay claims against the authority. (8) The amount of all assessments previously made and the amount of all assessments that may be made in the future under Section 10089.30. (9) The amount of all assessments previously made and the amount of all assessments that may be made in the future under Section 10089.31. (d) In verification of the matters set forth in the annual report provided for in subdivision (a), the Department of Finance shall approve independent qualified auditors selected by the commissioner to examine the books and accounts relating to all matters concerning the financial and program operations of the authority. The commissioner shall file a certified report of the examination with the President pro Tempore of the Senate, the Speaker of the Assembly, the Chairpersons of the Senate and Assembly Insurance Committees, and the Chairperson of the Senate Committee on Judiciary within 10 days of its receipt. Copies of this report shall also be made available to the public. The expense of examining the books and accounts of the authority shall be paid out of the operating funds of the authority. (e) The authority shall, within 120 days following a seismic event that results in the payment of claims by the authority, and within one year of a major seismic event that results in the payment of claims by the authority, submit to the President pro Tempore of the Senate, the Speaker of the Assembly, the Chairpersons of the Senate and Assembly Insurance Committees, the Chairperson of the Senate Committee on Judiciary, and the commissioner a concise written report of program operations related to that seismic event. The reports shall include, but not be limited to, progress on payment of claims, claims payments made and anticipated, and the functioning of the authority in response to the seismic event. Copies of this report shall also be made available to the public. (Amended by Stats. 2009, Ch. 480, Sec. 1. (AB 866) Effective January 1, 2010.)
  42. 10089.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority may not issue earthquake policies, and insurers may not transfer earthquake risk to the authority, until listed conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.14. (a) The authority shall not issue any earthquake policy and no insurer shall transfer any earthquake risk to the authority until all of the following conditions have been met: (1) The Internal Revenue Service has determined that the authority will be or is exempt from federal income tax. (2) Insurers whose cumulative residential property insurance market share is more than 70 percent of the total residential property insurance market in California, measured as of January 1, 1995, have filed letters of intent, with binding contractual obligation, to participate in the authority. (3) The authority has obtained letters of intent, with binding contractual obligation, for capital contributions in the amounts set forth in Section 10089.15. (4) The authority has obtained appropriate risk transfer ability in the form of firm reinsurance commitments in an aggregate amount of not less than 200 percent of the total capital contributions committed by all participating insurers. (b) Except as permitted by subdivision (e) of Section 10089.15 and subdivision (b) of Section 10089.16, insurers shall not be entitled to transfer any earthquake risk to the authority until they have met the capital contribution requirements set forth in Section 10089.15, and no insurer shall be entitled to transfer any earthquake risk to the authority pursuant to Section 10089.27 unless the insurer has signed a contract to participate in the authority, is in compliance with the capital contribution requirements set forth in Section 10089.15, and has complied with any related requirements set by the board. (Amended by Stats. 1996, Ch. 968, Sec. 3. Effective September 27, 1996.)
  43. 10089.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Insurers that participate in the authority must contribute operating capital, with contributions based on market share and some insurers allowed to pay in installments.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.15. (a) Initial operating capital shall be contributed by insurance companies admitted to write residential property insurance in the state. Each insurer that elects to participate in the authority shall contribute as its share of operating capital an amount equal to one billion dollars ($1,000,000,000) multiplied by the percentage representing that insurer’s residential earthquake insurance market share as of January 1, 1994, as determined by the board. A minimum of seven hundred million dollars ($700,000,000) in commitments shall be required before the authority may become operational. (b) Until the authority becomes operational, contributions of initial operating capital shall be held by the commissioner in trust for the contributing insurers in the California Earthquake Authority Fund. (c) Because insurers will retain the risk of earthquake losses on individual earthquake policies until they are renewed into the authority, participating insurers may elect to contribute operating capital in 12 installments payable on the first day of each successive calendar month after the insurer elects to participate. Each insurer shall compute its monthly installment based on the portion of the insurer’s earthquake coverage that will be renewed into the authority during the next month. The final installment shall be equal to the excess of the participating insurer’s required contribution over the sum of the previous 11 installments. Those insurers that elect to participate in the authority after the beginning operating date of the authority shall make initial capital contributions calculated using their residential earthquake insurance market share as of January 1, 1994, or the date of their election to participate in the authority, whichever contribution amount is greater. (d) An insurer or insurer group that represents 1.25 percent or less of the residential property insurance market, as measured by premium volume, or that has a surplus of less than one billion dollars ($1,000,000,000), may elect to become a participating insurer with the full rights and responsibilities of participating insurers of the authority, pursuant to the provisions of this section. (e) The insurer or insurer groups defined in subdivision (d) may elect to contribute their operating capital, as required by subdivision (a) of Section 10089.15, in 60 equal monthly installments, payable on the first day of each successive calendar month after the insurer elects to participate. In the event that earthquake losses result in the authority’s payment of claims while the authority’s available funds are inadequate to meet claims liabilities, and insurers participating under this section have operating capital contributions outstanding, the operating capital contributions necessary to meet any unfunded claims liabilities will become due and payable within 30 days of a request for such accelerated payment by the board, not to exceed the maximum contribution owed by each insurer. (f) No insurer may elect to contribute operating capital pursuant to subdivision (e) unless the aggregate premium or aggregate surplus of all affiliated insurers in its group meets the eligibility standards established by subdivision (d). (Amended (as added by Stats. 1995, Ch. 944) by Stats. 1996, Ch. 968, Sec. 4. Effective September 27, 1996.)
  44. 10089.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section lets nonparticipating insurers join the authority if they apply, pay required assessments and fees, and meet board requirements, and it gives the board power to open participation, set conditions, and require risk capital surcharges in some cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.16. (a) On application to the board, payment of any assessments and fees calculated by the board, and fulfillment of any additional requirements imposed by the board, nonparticipating insurers may become participants in the authority with all rights and privileges attendant to that participation. (b) In order to act upon any findings and recommendations reported to the Legislature pursuant to Section 10089.13, or to implement a specific finding by the commissioner or the board that modification of requirements for entry into the authority is necessary to broaden the availability of residential property or residential earthquake insurance, the board is authorized to open the authority to participation by insurers who have not elected to participate in compliance with Section 10089.15. In implementing the authority granted by this section, the board may: (1) Offer incentives for insurers to participate in the authority. (2) Allow any insurer or insurer group that has not elected to become a participating insurer to become an associate participating insurer without complying with the capital contribution requirements of Section 10089.15 if it has maintained or exceeded its number of policies of residential property insurance written as of January 1, 1996. (c) Any action by the board pursuant to subdivision (b) shall be subject to the following conditions and limitations: (1) Any deliberation and action by the board shall be conducted at a public meeting of the board. (2) No action may be taken within one year of the date upon which the authority begins writing policies of basic residential earthquake insurance. (3) The board shall have no authority to modify the requirements of Section 10089.23, 10089.30, or 10089.31, or to provide, in any other manner, for reduction of the liability of an insurer or insurer group to comply with the assessments placed upon participating insurers in the event of a loss. (4) Notwithstanding Section 10089.11, any action of the board pursuant to subdivision (b) shall be by regulation promulgated by the board. Notwithstanding any other provision of law, there shall be no authority by the board to promulgate emergency regulations to implement subdivision (b). No regulations may be proposed within one year of the date upon which the authority begins writing policies of basic residential earthquake insurance. Notwithstanding any exception provided in Section 11343 of the Government Code, any regulation adopted pursuant to subdivision (b) shall be submitted to the Office of Administrative Law for approval pursuant to the Administrative Procedure Act. (5) Any action by the board to establish an incentive pursuant to subdivision (b) that is available to a single insurer or insurer group shall be based upon standards adopted by the board that are not arbitrary or discriminatory. Notwithstanding Section 10089.11, these standards shall be established by regulation promulgated by the board. (6) A finding of necessity pursuant to subdivision (b) shall state the specific facts and conditions that establish the necessity and justify the actions to implement subdivision (b). All materials and documents prepared or used by the authority to determine the necessity to implement subdivision (b), other than proprietary materials and documents owned or licensed by third parties, shall be considered public documents, and copies of the public documents shall be made available to the public for inspection at no charge. Members of the public may purchase copies of these documents from the authority at actual cost. (d) (1) A nonparticipating insurer that applies to the board to become an authority participant must submit to the authority, in connection with its application, earthquake insurance policy data sufficient for the authority to ascertain through computer modeling the current likelihood and magnitude of earthquake insurance losses that would be attributable to that insurer’s book of earthquake insurance business during its first full year of authority participation. The authority’s modeled representation of such insured earthquake losses shall be termed the “earthquake insurance risk profile” of that insurer. (2) If in the board’s sole judgment the earthquake insurance risk profile the nonparticipating insurer would bring to the authority would be more likely to produce losses for the authority, or would be likely to produce greater losses for the authority, than would a book of existing authority business of similar size, the board may require as a condition for approving the insurer’s application that the insurer pay up to five annual risk capital surcharges into the authority in addition to any capital contribution required by Section 10089.15 and any assessment obligations required by Sections 10089.23, 10089.30, and 10089.31. (3) The board shall first calculate the nonparticipating insurer’s risk capital surcharge as of the first anniversary of the date the insurer first placed or renewed into the authority earthquake insurance policies. The board shall recalculate the risk capital surcharge for each of up to four years after the first year of calculation and shall impose the resulting surcharge; if the insurer’s earthquake insurance risk profile becomes substantially similar to the authority’s average risk profile for a book of authority earthquake insurance business of similar size, the board shall relieve the insurer of any further obligation to pay risk capital surcharges. (4) Each annual risk capital surcharge shall be in an amount that, in the board’s determination, is equal to the authority’s increased cost of providing capacity to insure that insurer’s excess earthquake insurance risk. The authority shall cause to be sent to each such insurer a notice of that insurer’s annual risk capital surcharge. (5) Full payment of a noticed risk capital surcharge shall be due within 30 days and shall be overdue after 30 days. Penalties and interest shall be assessed for late payments in the same manner as provided for late payments of the insurer gross premium tax provided for in Section 12258 of the Revenue and Taxation Code. The board may waive the penalties and interest for good cause shown. (e) Associate participating insurers shall place all new policies of residential earthquake insurance, when writing new policies of residential property insurance, into the authority. Insurers placing policies with the authority under this section shall be subject to the assessments provided for in Sections 10089.23, 10089.30, and 10089.31. Notwithstanding subdivision (m) of Section 10089.5, “residential earthquake insurance market share” for purposes of any assessments pursuant to Sections 10089.23, 10089.30, and 10089.31 levied on an associate participating insurer shall mean an individual associate participating insurer’s total direct premium received for residential earthquake policies written or renewed by the authority for which the insurer has written or renewed an underlying policy of residential property insurance, divided by the total gross premiums received by all admitted insurers and the authority for their basic residential earthquake insurance in California. (f) (1) An associate participating insurer shall not cancel or refuse to renew a residential property insurance policy existing on the date it elected to become an associate participating insurer after an offer of earthquake coverage is accepted solely because the insured has accepted that offer of earthquake coverage. (2) An associate participating insurer shall maintain in force any policy of residential property insurance existing on the date it elected to become an associate participating insurer after an offer of earthquake insurance has been accepted, unless the policy is properly canceled pursuant to Section 676 or the associate participating insurer has grounds for nonrenewal pursuant to subdivision (g). (g) An associate participating insurer may refuse to renew a policy of residential property insurance after an offer of earthquake coverage has been accepted if one of the following exceptions applies: (1) The policy is terminated by the named insured. (2) The policy is refused renewal on the basis of sound underwriting principles that relate to the coverages provided by the underlying policy of residential property insurance and that are consistent with the approved rating plan and related documents filed with the department as required by existing law. (3) The commissioner finds that the exposure to potential losses will threaten the solvency of the associate participating insurer or place the associate participating insurer in a hazardous condition. “Hazardous condition” has the same meaning as in Section 1065.1 and includes, but is not limited to, a condition in which an associate participating insurer makes claims payments for losses resulting from an earthquake that occurred within the preceding two years and that required a reduction in policyholder surplus of at least 25 percent for payment of those claims. (4) There is cancellation under Section 676. (5) The associate participating insurer has lost or experienced a substantial reduction in the availability or scope of reinsurance coverage or a substantial increase in the premium charged for reinsurance coverage for its residential property insurance policies, and the commissioner has approved a plan for the nonrenewals that is fair and equitable, and that is responsive to the changes in the associate participating insurer’s reinsurance position. (6) The named insured is insured based upon membership in a motor club, as defined in Section 12142, and the membership in that organization is terminated as provided in paragraph (2) of subdivision (c) of Section 1861.03. (h) For associate participating insurers, underwriting standards applicable to residential property insurance shall not be applied in an unfairly discriminatory fashion against any person who accepts or elects to continue earthquake coverage. (i) Associate participating insurers shall be subject to the following requirements: (1) Associate participating insurers shall conform to all provisions of the authority’s plan of operation applicable to participating insurers. (2) No property that has previously been covered by a policy of residential earthquake insurance written by the associate participating insurer or associate participating insurer group, absent at least one full policy year with an insurer not affiliated with the associate participating insurer or its group, may be placed into the authority by an associate participating insurer. (3) Any associate participating insurer or associate participating insurer group defined in paragraph (2) of subdivision (b) that has failed to maintain or exceed the number of policies of residential property insurance in force on January 1, 1996, may become an associate participating insurer by contributing additional capital into the authority at a rate to be established by the board, which shall be a per policy rate comparable to the average cost per policy paid by a participating insurer that joins the authority pursuant to Section 10089.15. (j) Any associate participating insurer shall be required to establish procedures to verify compliance with this section. The procedures shall require verification that each basic residential earthquake policy written by the authority complies with paragraph (2) of subdivision (i). (k) Any violation of this section may be enforced as a violation of the Unfair Trade Practices Act (Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1). Each policy of basic residential earthquake insurance written in the authority by an associate participating insurer in violation of this section shall be deemed to be a separate violation of the Unfair Trade Practices Act. (l) For purposes of this section, no insurer or associate participating insurer may participate in the authority unless all affiliated insurers participate in the authority. (m) Policies of basic residential earthquake insurance written by associate participating insurers shall be subject to assessment by the California Insurance Guarantee Association and shall be covered to the extent provided in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1. Except as provided in Section 10089.34, insurance policies written by participating insurers that are not associate participating insurers shall not be subject to assessment by the California Insurance Guarantee Association if the assessment is imposed to pay claims covered by policies of basic residential earthquake insurance written by an associate participating insurer. (Amended by Stats. 2007, Ch. 303, Sec. 4. Effective January 1, 2008. Operative July 1, 2008, by second Sec. 8 of Ch. 303.)
  45. 10089.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must follow the Political Reform Act of 1974, even though subdivision (h) of Section 10089.7 would otherwise apply.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.17. Notwithstanding subdivision (h) of Section 10089.7, the authority shall be subject to the provisions of the Political Reform Act of 1974 (Title 9 (commencing with Section 81000) of the Government Code). (Added by Stats. 1996, Ch. 967, Sec. 11. Effective September 27, 1996.)
  46. 10089.19.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Participating insurers may withdraw from the authority only after 12 months’ written notice, and withdrawn insurers must offer residential earthquake coverage at the first renewal and lose entitlement to certain refunds or reductions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.19. (a) Participating insurers that want to withdraw from the authority may do so on 12 months’ written notice to the authority. Insurers that withdraw shall not be entitled to any refund, reimbursement, or reduction of any initial capital contribution obligation or earthquake loss assessments previously paid or accrued with respect to losses incurred prior to the withdrawal. Insurers that withdraw shall offer residential earthquake insurance coverage pursuant to Chapter 8.5 (commencing with Section 10081) to those policyholders for whom they write the underlying residential property insurance upon the first renewal following the insurer’s notice to the authority. The authority shall nonrenew all policies of basic residential earthquake insurance issued to policyholders whose provider of residential earthquake insurance has withdrawn from the authority. No participating insurer may withdraw unless every insurer affiliated with that insurer, as defined in subdivision (a) of Section 1215, or under common control with that insurer, defined in subdivision (c) of Section 1215, simultaneously withdraws from the authority. (b) If a noticed withdrawal would result in participation by insurers whose cumulative residential property insurance market share is less than 65 percent of the total residential property insurance market in California, the commissioner shall make recommendations to the Legislature for the continuation or termination of the authority. (Amended by Stats. 2017, Ch. 417, Sec. 25. (AB 1696) Effective January 1, 2018.)
  47. 10089.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    Insurers in this chapter must disclose available discounts and surcharges for earthquake coverage, and insurers using licensed agents or brokers must also give the disclosure documents to those intermediaries and require them to pass on the disclosures.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10089.2. (a) (1) Subject to the approval of the commissioner, every insurer subject to this chapter shall, at the time of offering to issue or offer to renew coverage as part of the offer of coverage required by Section 10081, disclose to the applicant, in writing as a freestanding document or in the same document containing the offer of coverage required by Section 10081, which brings attention to the applicant, all discounts or surcharges, if any that are available from the insurer for that insurance and for any related insurance provided under that coverage as part of the offer of coverage required by Section 10081. (2) The insurer shall provide and disclose in writing any discounts or surcharges, if any, for earthquake hazard reductions, which shall include, but not be limited to, retrofitting of the residential dwelling by tying the structure to the foundation or bracing the structure to the foundation, reinforcement of the fireplace chimney, or securing of the hot water heater, and any other discounts that are available from the insurer. (b) Each insurer that offers earthquake insurance through licensed agents or brokers shall provide in writing the document required in subdivision (a) and any documents required by subdivision (a) of Section 10083 to the agents and brokers listing all of the discounts or surcharges, if any, that are required to be disclosed to the applicant under this section, and shall require its agents and brokers to make the disclosures required by this section. (c) An insurer is not subject to this section where an insured has completed earthquake hazard reductions and the insurer has provided discounts or surcharges for the specific policy in the form of premium rate changes. (Amended by Stats. 2011, Ch. 240, Sec. 2. (SB 596) Effective January 1, 2012.)
  48. 10089.20.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must renew basic residential earthquake insurance policies if the renewal premium is paid on time, and may nonrenew, rescind, or cancel when there is no underlying residential property insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.20. The authority shall renew any policy of basic residential earthquake insurance, provided the authority receives payment of the applicable renewal premium on or before the expiration date stated in the policy. The authority shall nonrenew, rescind, or cancel a policy if the property is no longer covered by an underlying policy of residential property insurance. The policy issued by the authority shall not provide coverage in the event that there is no underlying policy of property insurance at the time of loss. In that case, any unearned premiums shall be returned to the policyholder on a pro rata basis. (Amended by Stats. 1996, Ch. 967, Sec. 12. Effective September 27, 1996.)
  49. 10089.21.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority is treated as a public instrumentality of California, and the commissioner must not interfere with specified bond and revenue payment protections.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.21. The authority is a public instrumentality of the State of California and the exercise of its powers is an essential state governmental function. No provision of law, including, but not limited to, subdivision (h) of Section 10089.7 and subdivision (e) of Section 10089.22, shall be construed to affect the status of the authority as a public instrumentality of the State of California. Notwithstanding any other provision of law, the authority is not and shall never be authorized to become a debtor in a case under the United States Bankruptcy Code (Title 11 of the United States Code) or to make an assignment for the benefit of creditors or to become the subject of any similar case or proceeding, nor is the authority subject to Article 14 (commencing with Section 1010) and Article 14.3 (commencing with Section 1064.1) of Chapter 1 of Part 2 of Division 1. Notwithstanding any other provision of law, the commissioner shall not, directly or indirectly, when exercising the power and authority contained or referred to in or arising from Section 10089.6, paragraph (5) of subdivision (e) of Section 10089.7, Section 10089.12, subdivision (e) of Section 10089.22, subdivision (b) of Section 10089.35, or any other statute, rule, or regulation, impede or in any manner interfere with, but shall affirmatively take all necessary steps to effect, and no person acting under subdivision (c) of Section 10089.11, or any other provision of law or principle of equity shall be permitted in any way to impede or in any manner interfere with: (a) the full and timely payment of principal, interest, and premiums on revenue bonds of the authority and amounts due those bond insurers and providers of credit support and letters of credit; and (b) any pledge or assignment of revenues as security for those payments or amounts due, and the full and timely application of those pledged or assigned revenues to those payments and amounts due, in each or either case, (a) or (b), as and when due in accordance with and subject to the limitations contained in Section 10089.22 and the terms of the constituent instruments defining the rights of the holders of the bonds and the providers of bond insurance, credit support, and letters of credit. Division 3.6 (commencing with Section 810) of Title 1 of the Government Code shall not apply to acts of the authority. (Added by Stats. 1996, Ch. 967, Sec. 13. Effective September 27, 1996.)
  50. 10089.22.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must stay in existence while its bonds are outstanding, and its revenue and fund are managed for bond payments, claims, expenses, reserves, and related investment and custody rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.22. (a) The authority shall be continued in existence for so long as its bonds are outstanding. Unless and until the authority is terminated pursuant to Section 10089.43, the commissioner and the authority shall execute assignments and contracts and take all necessary steps to assure that all revenue of the authority is paid to a trustee appointed by the Treasurer, which trustee may be the treasurer. The revenue of the authority shall be pledged and assigned to and held in trust by the trustee and invested and disbursed by the trustee, to pay, or to set aside funds to pay, principal, interest, and premiums on bonds and amounts due bond insurers and providers of credit support and letters of credit for those bonds, but only in the manner and in accordance with the terms of the constituent instruments defining the rights of the holders of bonds of the authority and the providers of bond insurance, credit support and letters of credit for those bonds. Amounts held by the trustee from time to time after provisions for those payments may be disbursed free of trust to the California Earthquake Authority Fund. Notwithstanding the foregoing provisions of this section, (1) debt service payments on bonds of the authority secured by or payable from securities described in Section 16430 of the Government Code shall not be secured by a pledge or assignment of revenue of the authority other than revenue of the authority from (A) the proceeds of sale of such bonds, (B) the securities described in Section 16430 of the Government Code, and (C) principal and interest payments on such securities described in Government Code Section 16430, but debt service payments on such bonds of the authority may also be made payable from revenue of the authority in the California Earthquake Authority Fund, and (2) the constituent instruments defining the rights of the holders of bonds of the authority referred to in paragraph (1) shall specify that payment of a portion of the interest on such bonds is contingent upon payment of policyholder claims for which the bonds are responsible and that the obligation of the authority is to first apply such assigned or pledged revenue to the payment of such policyholder claims instead of paying that contingent interest. (b) There is hereby created the California Earthquake Authority Fund, which is not a fund in the State Treasury. Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated without regard to fiscal years for the purposes of this chapter. The fund shall be administered by the commissioner, subject to the direction of the board, to pay all costs arising from this chapter, including, but not limited to, premiums payable by the authority under contracts of reinsurance, claims arising under policies of basic residential earthquake insurance issued by the authority, operating and other expenses of the authority, and to establish reserves. At the discretion of the commissioner, segregated, dedicated accounts within the fund may be established for those payments. (c) The board may cause moneys in the fund to be invested and reinvested, from time to time, in accordance with paragraph (4) of subdivision (c) of Section 10089.7 and subject to subdivision (b) of Section 10089.6. Moneys in the fund and not so invested may be deposited from time to time in (1) financial institutions authorized by law to receive deposits of public moneys, or (2) with the approval of the Treasurer, the Surplus Money Investment Fund as provided in Article 4 (commencing with Section 16470) of Division 4 of Title 2 of the Government Code. (d) A national bank shall be custodian of all securities belonging to the fund, except as otherwise provided in this chapter and except as otherwise provided in the constituent instruments that define the rights of the holders of bonds of the authority and the providers of bond insurance, credit support, and letters of credit for those bonds. (e) The board may, in cooperation with the Treasurer, authorize the establishment of an account or fund in the State Treasury in the name of the authority, but money deposited with the Treasurer in that account or fund is not state money within the intent of Section 16305.2 of the Government Code, and Sections 16305.3 to 16305.7, inclusive, of the Government Code shall not apply to money drawn or collected by the authority. (Added by Stats. 1996, Ch. 967, Sec. 14. Effective September 27, 1996.)
  51. 10089.23.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority may assess participating insurers when its capital falls below the stated level or it cannot keep operating, but the total assessments are capped and extra assessments stop once an insurer reaches its limit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.23. (a) (1) If at any time following the payment of earthquake claims and claim expenses the authority’s available capital is reduced to less than three hundred fifty million dollars ($350,000,000), or if at any time the authority’s available capital is insufficient to pay benefits and continue operations, the authority shall have the power to assess participating insurance companies subject to the maximum limits as set forth in this section and Section 10089.30. The assessment shall be limited to the amount necessary to pay the outstanding or expected claims and claim expenses of the authority and to return the authority’s available capital to three hundred fifty million dollars ($350,000,000), as determined by the board, subject to approval by the commissioner. (2) Each participating insurer’s assessment shall be determined by multiplying the percentage share of the authority’s total gross written premium that is attributable to that participating insurer’s sales of authority insurance policies, as of April 30 of the immediately preceding year or the most recent year for which premium data not more than one year old are available, by the amount of the total assessment sought by the authority. (3) The maximum permissible insurer assessments pursuant to this section and Sections 10089.30 and 10089.31 shall be reduced uniformly by multiplication of the maximum assessments and other amounts provided in those sections by the percentage of the total residential property insurance market share participation attained by the authority. The total amount of all assessments levied on participating insurance companies by the authority pursuant to this section shall not exceed three billion dollars ($3,000,000,000), regardless of the frequency or severity of earthquake losses at any and all times subsequent to the creation of the authority. Once a participating insurer has paid, pursuant to this section, amounts equal to the percentage share of the authority’s total gross written premium attributable to that participating insurer’s sales of authority insurance policies, as of April 30 of the immediately preceding year or the most recent full year for which premium data not more than one year old are available, multiplied by three billion dollars ($3,000,000,000) reduced as provided in this paragraph from the maximum assessment, the authority’s power to assess that insurer under this section shall cease and the authority shall be prohibited from levying additional assessments on that insurer pursuant to this section. (4) Beginning December 31 of the first year of operations, and each December 31 thereafter, the board shall adjust the maximum permissible insurer assessments pursuant to this section, the maximum permissible insurer assessments pursuant to Sections 10089.30 and 10089.31, the maximum permissible authority policyholder assessment pursuant to Section 10089.29, and the maximum permissible bond issuances or other debt financing issued or secured by the Treasurer pursuant to Section 10089.29 to reflect the market share of new insurers entering into the authority as authorized by Sections 10089.15 and 10089.16 and participating insurers withdrawing from the authority as authorized by Section 10089.19. The adjustments shall be made in the same manner as authorized by paragraph (3). (b) In the case of any insurer assessment, the authority shall cause to be sent to each participating insurer a notice of that insurer’s assessment, and full payment shall be due within 30 days and shall be overdue after 30 days. Penalties and interest shall be assessed for late payments in the same manner as provided for late payments of the insurer gross premium tax pursuant to Section 12258 of the Revenue and Taxation Code. The board may waive the penalties and interest for good cause shown. The board shall make every effort to assess insurers only for funds reasonably anticipated to be necessary for claims payments and claim expenses and to return the authority’s available capital to three hundred fifty million dollars ($350,000,000). (c) Notwithstanding the other provisions of this section, the aggregate assessment the authority is authorized by this section to impose shall be reduced to zero on December 1, 2008, with respect to earthquake events that commence on or after December 1, 2008. (d) The authority shall not assess a participating insurer under this section based on any insurance business that is attributable to the insurer selling the insurer’s insurance products that supplement or augment the basic residential earthquake insurance provided by the authority. (Amended by Stats. 2019, Ch. 497, Sec. 178. (AB 991) Effective January 1, 2020.)
  52. 10089.24.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section sets how certain maximum assessments are calculated for participating insurers after a new insurer begins renewing business into the authority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.24. (a) Notwithstanding any other provision of this chapter, the maximum permissible assessment pursuant to Section 10089.23 of a participating insurer that began renewing business into the authority less than 12 months prior to the date of the assessment shall be based on the residential earthquake market share of business actually placed into the authority by the insurer as of the date of the assessment. (b) Notwithstanding any other provision of this chapter, the maximum permissible assessments pursuant to Section 10089.23 that are permitted for all participating insurers not covered by subdivision (a) shall not be modified to reflect the addition of a new participating insurer until 12 months after that insurer has begun renewing business into the authority. (Added by Stats. 1998, Ch. 264, Sec. 4. Effective August 6, 1998.)
  53. 10089.25.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The board must notify each participating insurer of the maximum earthquake loss funding assessment level it may have to meet.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.25. Beginning December 31, 1997, and annually thereafter on the 30th of April, the board shall notify each participating insurer of the maximum earthquake loss funding assessment level that it may be required to meet. (Amended by Stats. 1998, Ch. 264, Sec. 5. Effective August 6, 1998.)
  54. 10089.26.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must issue basic residential earthquake insurance policies to qualifying residential property owners who already have residential property insurance from a participating insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.26. (a) The authority shall issue policies of basic residential earthquake insurance, including an option for earthquake loss assessment policies for individual condominium unit properties, to any owner of a qualifying residential property, as long as the owner has secured a policy of residential property insurance from a participating insurer. (1) For purposes of this section, earthquake loss assessment coverage shall be issued in a minimum amount of fifty thousand dollars ($50,000) for individual condominium units valued at more than one hundred thirty-five thousand dollars ($135,000). Earthquake loss assessment coverage shall be issued in a minimum amount of twenty-five thousand dollars ($25,000) for individual condominium units of one hundred thirty-five thousand dollars ($135,000) in value or less. The value of the land shall be excluded when determining the value of the condominium, as it relates to the earthquake loss assessment coverage offered by the authority. (2) The panel shall submit to the board, and the board shall approve, rates for earthquake loss assessment coverage that reasonably balance the earthquake loss assessment coverages offered and the potential exposure to earthquake loss resulting from an earthquake loss assessment policy as compared to the coverages offered and the potential exposure to earthquake loss resulting from residential property other than individual condominium policies. It is the intent of the Legislature, to the extent practicable, that rates charged by the authority to condominium loss assessment policyholders and residential property owner policyholders are treated equitably, and that a proportionate share of premiums is paid for potential exposure to loss, to the authority. (b) Nothing in this section shall prohibit a participating or nonparticipating insurer from offering a condominium earthquake loss assessment policy for different amounts of coverage other than those offered by the authority. (Amended by Stats. 2014, Ch. 419, Sec. 8. (AB 2064) Effective January 1, 2015.)
  55. 10089.27.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Participating insurers must renew covered residential earthquake policies into the authority, and after the transition period they may not keep writing basic residential earthquake coverage for qualifying properties.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.27. (a) Every participating insurer that has in-force residential earthquake insurance policies in the state as of the date of commencement of authority operations shall renew each in-force residential earthquake insurance policy or earthquake coverage provided by endorsement into the authority at the time the policy or endorsement comes up for renewal. The effective date of each policy renewal into the authority shall be the renewal date of the policy as recorded in the records of the insurer and disclosed to the policyholder. The risk of loss under the insurance policy does not transfer to the authority until 12:01 a.m. of the policy renewal date. (b) (1) All policies of residential earthquake insurance written by any participating insurer shall have been renewed into the authority within one year of the commencement of operations of the authority or the date an insurer elects to participate in the authority, whichever is later, and after that date, no participating insurer shall be permitted to write a policy of insurance that provides coverage within the terms and limits of a policy of basic residential earthquake insurance for any qualifying residential property in the state. Participating insurers may sell residential earthquake insurance products that supplement or augment the basic residential earthquake insurance provided by the authority. (2) Upon application to the authority demonstrating good cause and approval of the commissioner, a participating insurer may take up to 60 days beyond that one-year period to complete its renewal of earthquake policies into the authority. No extension of time to complete earthquake policy renewals into the authority shall serve to extend the due date by which an insurer is to make its initial capital contribution, as set forth in Section 10089.15. The commissioner shall not approve any extension if the effect of the extension would allow an insurer to selectively transfer earthquake policies with high risks to the authority while retaining policies with lower risks during that interim period. (3) After policies of residential earthquake insurance are renewed in the authority, insurers shall have no responsibilities or liabilities regarding those policies for losses incurred after the date of renewal of those policies, except for duties and responsibilities to the authority and policyholders under the terms of this chapter. (4) No insurer may participate in the authority unless every insurer affiliated with that insurer, as defined in subdivision (a) of Section 1215, or under common control with that insurer, as defined in subdivision (c) of Section 1215, also participates in the authority. (Amended by Stats. 2017, Ch. 417, Sec. 26. (AB 1696) Effective January 1, 2018.)
  56. 10089.28.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must write residential earthquake policies, provide required disclosures, keep records, and supply forms; participating insurers must market and service policies and follow the authority’s procedures when applicable.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.28. (a) All policies of residential earthquake insurance provided by the authority shall be written by the authority. Authority policies shall be marketed and policyholders serviced by the participating insurer that writes the underlying policy of residential property insurance, and participating insurers shall be reasonably compensated for the claims and policyholder services they provide on behalf of the authority. Authority services may be performed on behalf of the authority in any reasonable manner by the participating insurer that is in compliance with statutory, regulatory, and case law regarding claims handling practices; provided, however, where the authority has promulgated specific procedures to govern its operations, the participating insurer shall conform its practices to those procedures. The authority procedures shall comply with statutory, regulatory, and case law governing claims handling practices. Nothing in this provision shall be deemed or construed to affect any duty or liability of the authority or participating carrier as set forth in paragraphs (2) and (3) of subdivision (e) of Section 10089.7. (b) Concurrent with the issuance or renewal by the authority of a residential earthquake insurance policy, the following disclosure shall be provided to the insured in 14-point boldface type: “California Earthquake Authority Policy Disclosure You have purchased a California Earthquake Authority (CEA) earthquake insurance policy, which can help you cover the cost of repairing damage to your property and possessions caused by an earthquake. The CEA is not part of your homeowners’ insurance company. Please keep in mind these important things about your CEA insurance policy: 1. CEA policy coverages are different from the coverages provided in your homeowners’ insurance policy. For example, this policy does not cover earthquake damage to swimming pools, and it may provide more limited coverage for chimneys, outbuildings, and masonry fences. These are examples of possible differences between your CEA policy and your homeowners’ policy, and you should consult your CEA policy to understand the types of losses that are limited or excluded and those that are covered. 2. If CEA’s liability for earthquake losses exceeds the CEA’s available resources the CEA may reduce its payment to you or pay you in installments. This policy is not covered by the California Insurance Guarantee Association, and therefore, the California Insurance Guarantee Association will not pay your claims if the CEA becomes insolvent and is unable to make payments as promised. 3. In certain cases, your CEA policy premium may be subject to future surcharges if the CEA’s obligations to pay earthquake losses rise to a predefined level. In that case, in addition to your annual premium you may be charged up to an additional 20% of that premium.” (c) The authority shall provide to participating insurers appropriate applications and forms and shall maintain records of all policies written, moneys received, and claims paid. (d) The duty of an agent or broker to investigate the financial condition of the authority before placement of insurance shall be the same as the duty of an agent or broker to investigate the financial condition of an admitted insurer before placement of a policy of insurance. (e) This section shall become operative on January 1, 2016. (Repealed (in Sec. 9) and added by Stats. 2014, Ch. 419, Sec. 10. (AB 2064) Effective January 1, 2015. Section operative January 1, 2016, by its own provisions.)
  57. 10089.29.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section lets the California Earthquake Authority raise money through bonds and surcharges, sets limits on those amounts, and requires notice and cancellation rules if policy surcharges are added.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.29. (a) (1) Notwithstanding the prior approval requirement of Section 10089.10, the authority shall issue and sell investment grade revenue bonds or secure other debt financing of the authority, or both, in amounts determined by the board pursuant to Section 10089.32, but not to exceed one billion dollars ($1,000,000,000) plus costs of issuance and sale of those revenue bonds, costs of securing that debt financing, and amounts paid or payable to bond issuers and providers of credit support and letters of credit for, and interest on, those revenue bonds or other debt, if claims and claim expenses incurred by the authority from an earthquake event exhaust the total of the following: (A) The authority’s available capital. (B) The maximum amount of all contributions of initial operating capital made by participating insurers pursuant to Section 10089.15, and assessments levied and paid pursuant to Section 10089.23. (C) All reinsurance actually available and under contract to the authority. (D) All risk transfer provided and any other capital committed through capital market contracts that is actually under contract to the authority from private capital markets. (2) The Treasurer shall act as agent for sale of the revenue bonds described in paragraph (1), and shall make available the net proceeds of those revenue bonds as funding for the authority. Failure of the authority to sell those revenue bonds or obtain that debt financing for any reason shall not obligate the State of California to provide or arrange replacement funding for the authority. The Treasurer may sell revenue bonds for the purpose of refunding the revenue bonds or other debt financing when authorized to do so by the board, and the surcharge authorized by this section may be used to repay that refunding, plus costs of issuance and sale of those revenue bonds or other debt financing being refunded, and amounts paid or payable to bond issuers and providers of credit support and letters of credit for, and interest on, those revenue bonds or other debt being refunded. (b) (1) In the event of a revenue bond sale or debt financing arrangement pursuant to this section, the authority shall have the power to surcharge annually all authority policies to secure funds, which the authority may use solely to repay the bonded indebtedness or other debt, plus costs of issuance and sale of those revenue bonds or other debt, and amounts paid or payable to bond issuers and providers of credit support and letters of credit for, and interest on, those revenue bonds or other debt. Notwithstanding paragraph (3) of subdivision (a) of Section 10089.23, the total net surcharge collected shall not exceed one billion dollars ($1,000,000,000), plus costs of issuance and sale of those revenue bonds or other debt and amounts paid or payable to bond issuers and providers of credit support and letters of credit for, and interest on, those revenue bonds or other debt. The surcharge on an authority policy shall not exceed 20 percent of the annual authority residential earthquake insurance policy premium in any one year. A surcharge levied and collected pursuant to this section shall not be considered revenue, notwithstanding subdivision (o) of Section 10089.5, including for purposes of the calculation of rates filed with the commissioner pursuant to subdivision (e) of Section 10089.40. A surcharge levied and collected pursuant to this section also shall not be considered basic residential earthquake premium for any purpose, including the calculation of producer commission. (2) If a policy issued by the authority includes a premium surcharge pursuant to this subdivision, the participating insurer shall provide the insured a notice in a stand-alone document stating that the policyholder may cancel or nonrenew the earthquake policy. The notice shall specify that cancellation or nonrenewal of the earthquake policy will not affect the underlying residential property insurance policy. The statement shall be provided with the premium billing and shall include the following statement in 14-point boldface type: ## NOTICE OF SURCHARGE ON CEA EARTHQUAKE INSURANCE POLICY AND RIGHT TO CANCEL THE CEA IS IMPOSING A SURCHARGE ON THE PREMIUM OF ALL CEA EARTHQUAKE INSURANCE POLICIES. You may choose to renew, to cancel, or not to renew (“nonrenew”) your CEA earthquake insurance policy. If you choose to cancel or nonrenew your CEA earthquake insurance policy, your CEA earthquake insurance policy will be canceled and that cancellation will have no effect on your policy of residential property insurance. If you fail to cancel or to nonrenew your CEA earthquake insurance policy, and if you also fail to pay the CEA earthquake insurance policy premium and surcharge by the payment deadline, both your CEA earthquake insurance policy and your policy of residential property insurance will be canceled. IF YOU WANT EARTHQUAKE INSURANCE PROVIDED BY THE CEA, YOU MUST PAY THE PREMIUM FOR THE CEA EARTHQUAKE INSURANCE POLICY AND THE SURCHARGE. (c) The total amount of indebtedness and policy surcharges authorized under this section shall not exceed one billion dollars ($1,000,000,000) plus costs of issuance and sale of those revenue bonds or other debt and amounts paid or payable to bond issuers and providers of credit support and letters of credit for, and interest on, those revenue bonds or other debt, regardless of the frequency or severity of earthquake losses incurred after the creation of the authority. Once the authority has levied policy surcharges in a total amount of one billion dollars ($1,000,000,000) plus costs of issuance and sale of those revenue bonds or securing other debt financing and amounts paid or payable to bond issuers and providers of credit support and letters of credit for, and interest on, those revenue bonds or other debt financing, the authority’s power to surcharge authority policies shall cease and the authority shall be prohibited from levying additional surcharges pursuant to this section. (d) Consistent with Section 676, the authority shall cancel the policy of basic residential earthquake insurance if the policyholder fails to pay the earthquake policy surcharge authorized by the authority, and the insurer shall cancel the policy of residential property insurance if the policyholder fails to pay the policy surcharge authorized by the authority. (Amended by Stats. 2018, Ch. 828, Sec. 3. (AB 2927) Effective January 1, 2019.)
  58. 10089.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    Insurers must train and accredit earthquake claims adjusters by December 31, 2004, and later report untrained adjusters to the Department of Insurance; some cross-insurer training counts for reuse.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10089.3. (a) The department shall adopt regulations setting forth standards governing the training of insurance adjusters in evaluating damage caused by earthquakes. For purposes of this section, the California Earthquake Authority shall make available to the Department of Insurance the standards used by the authority in order for the department to develop regulations that are consistent with the authority’s standards. On or before December 31, 2004, insurers shall train and accredit adjusters in accordance with these standards. Thereafter, an insurer using one or more adjusters who are not trained and accredited in accordance with those standards shall submit the names of those adjusters to the department, along with the claim number of the claim adjusted by that adjuster. An adjuster trained and accredited by one insurer pursuant to this section shall not be required to receive training and accreditation again in order to adjust claims for a different insurer. An insurer using an adjuster who has been trained and accredited by another insurer pursuant to this section shall not be required to submit the name of that adjuster to the department. (b) For purposes of this section, “insurance adjuster” shall include the following persons: (1) Persons licensed pursuant to Chapter 1 (commencing with Section 14000) of Division 5. (2) Employees of persons licensed pursuant to Chapter 1 (commencing with Section 14000) of Division 5 who perform insurance adjusting activities as defined in Section 14021. (3) Employees of an insurer who perform insurance adjusting activities as defined in Section 14021. (Added by Stats. 2001, Ch. 727, Sec. 1. Effective January 1, 2002.)
  59. 10089.30.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    If earthquake-related claims and expenses exhaust listed funding sources, the board may assess participating insurers, with commissioner approval, up to the section’s limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.30. If claims and claim expenses paid by the authority due to earthquake events exhaust the total of (a) the authority’s available capital, (b) the maximum amount of all insurer capital contributions and assessments pursuant to Sections 10089.15 and 10089.23, (c) all reinsurance actually available and under contract to the authority, (d) the maximum amount of all authority policyholder assessments pursuant to Section 10089.29, and (e) all capital committed and actually available from the private capital markets, the board, subject to the approval of the commissioner, shall have the power to assess participating insurance companies subject to the maximum limits in this section. Each participating insurer’s assessment shall be determined by multiplying the percentage share of the authority’s total gross written premium attributable to that participating insurer’s sales of authority insurance policies, as of April 30 of the immediately preceding year or the most recent year for which premium data not more than one year old are available, by the amount of the total assessment sought by the authority. The total amount of all assessments levied against participating insurance companies by the authority pursuant to this section shall not exceed two billion dollars ($2,000,000,000), regardless of the frequency or severity of earthquake losses at any and all times subsequent to the creation of the authority. Once a participating insurer has paid, pursuant to this section, amounts equal to its percentage share of the authority’s total gross written premium, multiplied by two billion dollars ($2,000,000,000) reduced from the maximum assessment as provided in paragraph (3) of subdivision (a) of Section 10089.23, the authority’s power to assess that insurer under this section shall cease and the authority shall be prohibited from levying additional assessments on that insurer pursuant to this section. The assessment shall be limited to the amount necessary to pay the expected claims and claim expenses of the authority and return the authority’s available capital to three hundred fifty million dollars ($350,000,000), as determined by the board, subject to approval by the commissioner. (Amended by Stats. 2007, Ch. 303, Sec. 6. Effective January 1, 2008. Operative July 1, 2008, by second Sec. 8 of Ch. 303.)
  60. 10089.31.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    If specified earthquake-related funds are exhausted, the board may assess participating insurance companies, but total assessments are capped and no further assessments may be levied on an insurer after it reaches its limit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.31. If claims and claim expenses paid by the authority due to earthquake events that commence on or after December 1, 2008, exhaust the total of all (a) the authority’s available capital, (b) the maximum amount of all insurer capital contributions and assessments pursuant to Sections 10089.15, 10089.23, and 10089.30, (c) all reinsurance actually available and under contract to the authority, (d) the maximum amount of all authority policyholder assessments pursuant to Section 10089.29, and (e) all capital committed and actually available from the private capital markets, the board, beginning December 1, 2008, for earthquake events commencing on or after December 1, 2008, shall have the power to assess participating insurance companies subject to the maximum limits in this section. Each participating insurer’s assessment shall be determined by multiplying the percentage share of the authority’s total gross written premium attributable to that participating insurer’s sales of authority insurance policies as of April 30 of the immediately preceding year, or the most recent year for which premium data not more than one year old are available, by the amount of the total assessment sought by the authority. The total amount of all assessments levied against participating insurance companies by the authority pursuant to this section shall not exceed one billion seven hundred eighty million dollars ($1,780,000,000), regardless of the frequency or severity of earthquake losses at any and all times subsequent to the creation of the authority. Once a participating insurer has paid pursuant to this section amounts equal to its percentage share of the authority’s total gross written premium, multiplied by one billion seven hundred eighty million dollars ($1,780,000,000) reduced as provided in paragraph (3) of subdivision (a) of Section 10089.23 from the maximum assessment, which is to be reduced periodically pursuant to subdivision (b) of Section 10089.33, or upon the earlier occurrence of the effective date stated in paragraph (6) of subdivision (b) of Section 10089.33, the authority’s power to assess that insurer under this section shall cease and the authority shall be prohibited from levying additional assessments on that insurer pursuant to this section. The assessment shall be limited to the amount necessary to pay the expected claims and claim expenses of the authority and return the authority’s available capital to three hundred fifty million dollars ($350,000,000), as determined by the board. (Added by Stats. 2007, Ch. 303, Sec. 7. Effective January 1, 2008. Operative July 1, 2008, by second Sec. 8 of Ch. 303.)
  61. 10089.32.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority and the Treasurer must act only for funds reasonably estimated to be needed for immediate authority operations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.32. The authority shall endeavor at all times to make specific authority earthquake policyholder assessments, and the Treasurer shall endeavor at all times to secure debt financing, only for the actual funds reasonably estimated to be required for immediate authority operations. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  62. 10089.33.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section requires the board to reduce participating insurers’ earthquake assessment obligations when the authority’s capital and assessment conditions are met, and it bars the board from reinstating any assessment it has reduced.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.33. (a) If the average daily balance of the authority’s available capital exceeds six billion dollars ($6,000,000,000) for the last 180 days of any calendar year, the board shall relieve all participating insurers of their obligation to pay additional earthquake loss assessments under Section 10089.30, by an aggregate amount equal to the amount of available capital in excess of six billion dollars ($6,000,000,000). Each December 31 thereafter, the board shall further reduce the aggregate assessment authorized under Section 10089.30 by the net increase in available capital in excess of the previous levels of available capital at which a reduction in the aggregate Section 10089.30 assessment was made. No reduction pursuant to this subdivision shall exceed 15 percent of the original aggregate Section 10089.30 assessment in any year of operation of the authority. (b) Commencing April 1, 2010, and on each April 1 thereafter, but only in years that such relief is authorized by this subdivision, the board shall reduce the combined assessment obligation of all participating insurers under Section 10089.31 by 5 percent of the maximum aggregate Section 10089.31 assessment authorized as of January 1, 2009, as provided in this subdivision. Each year of Section 10089.31 assessment reduction is referred to in this subdivision as an “assessment-reduction year.” Assessment reductions shall take place as follows: (1) Unless the authority has made payments and established appropriate reserves for claims and claim expenses, including for losses incurred but not reported, that in the aggregate exceeded five hundred million dollars ($500,000,000) on account of a single earthquake event commencing in 2009, as certified by the authority’s consulting actuary and accepted by the board, and the authority’s available capital as of January 1, 2010, did not exceed the authority’s available capital as of December 1, 2008, then effective April 1, 2010, the maximum aggregate Section 10089.31 assessment shall be reduced by an amount equal to the sum of an amount equal to 5 percent of the initial maximum aggregate Section 10089.31 assessment amount and an amount equal to the retained earnings differential, and 2009 shall be an assessment-reduction year. (2) Unless the authority has made payments and established appropriate reserves for claims and claim expenses, including for losses incurred but not reported, that in the aggregate exceeded five hundred million dollars ($500,000,000) on account of a single earthquake event commencing in 2010, as certified by the authority’s consulting actuary and accepted by the board and the authority’s available capital as of January 1, 2011, did not exceed the authority’s available capital as of December 1, 2008, then effective April 1, 2011, the maximum aggregate Section 10089.31 assessment shall be reduced by an amount equal to the sum of an amount equal to 5 percent of the initial maximum aggregate Section 10089.31 assessment amount and an amount equal to the retained earnings differential, and 2010 shall be an assessment-reduction year. (3) Beginning in 2012 and each year thereafter, unless the authority made payments and established appropriate reserves for claims and claim expenses, including for losses incurred but not reported, that in the aggregate exceeded five hundred million dollars ($500,000,000) on account of all earthquake events commencing in the preceding year, as certified by the authority’s consulting actuary and accepted by the board and the authority’s available capital as of January 1 of that year did not exceed the authority’s available capital as of December 1, 2008, then effective April 1 of that year, the maximum aggregate Section 10089.31 assessment shall be reduced by an amount equal to the sum of an amount equal to 5 percent of the initial maximum aggregate Section 10089.31 assessment amount and an amount equal to the retained earnings differential, and the preceding year shall be an assessment-reduction year. (4) If through operation of this subdivision a year is not deemed an assessment-reduction year, no subsequent year shall be an assessment reduction year unless and until either the authority’s available capital as of a subsequent April 1 exceeds the authority’s available capital as of December 1, 2008; or the limitation established in paragraph (5), below, occurs. (5) No more than two annual periods may be deemed not to constitute assessment-reduction years. (6) Effective on the day after the last day of the 10th assessment-reduction year authorized by the board, the remaining maximum aggregate Section 10089.31 assessment shall be reduced to zero. (7) As used in this section, “retained earnings differential” means the positive dollar-amount difference between: (A) the authority’s positive one-year retained-earnings growth for the preceding calendar year, minus (B) the authority’s capacity growth for the preceding calendar year, both calculated as of December 31. As used in this paragraph, “one-year retained-earnings growth” means the difference between the authority’s cumulative retained earnings at December 31 of the preceding calendar year and the authority’s cumulative retained earnings at December 31 of the year before the preceding calendar year, calculated in accordance with generally accepted accounting principles as of the preceding December 31. As used in this paragraph, the term “capacity growth” is the one-year amount of purchased risk transfer, such as reinsurance, or borrowed risk transfer such as bonds, put in place in the authority’s financial structure to account for the authority’s aggregate exposure growth over the preceding year ending December 31. The board shall be authorized and entitled, in its sole discretion, to make all final decisions regarding the authority’s level of financial strength and security and the authority’s choice and use of financing and risk-transfer mechanisms. As used in this paragraph, the term “aggregate exposure” means the aggregate of the limits of liability under all coverages of all earthquake insurance policies issued by the authority. (c) In no event shall the board reinstate, in whole or in part, any assessment obligation it has reduced pursuant to this section. (Amended by Stats. 2007, Ch. 303, first Sec. 8. Effective January 1, 2008. Operative July 1, 2008, by second Sec. 8 of Ch. 303.)
  63. 10089.34.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Some earthquake insurance policies are subject to California Insurance Guaranty Association assessment, while others are not.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.34. (a) (1) The policies issued by the authority shall not be subject to assessment for, nor shall any authority policyholder be eligible for benefits from, the California Insurance Guaranty Association. (2) Policies of residential earthquake insurance written by participating insurers that supplement, augment, or are in excess of the authority’s policy of basic earthquake insurance shall be subject to assessment by the California Insurance Guaranty Association and shall be covered to the extent provided in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1. (b) (1) Policies of basic residential earthquake insurance written by nonparticipating insurers shall be subject to assessment by the California Insurance Guaranty Association and shall be covered to the extent provided in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1. (2) Participating insurers of the authority shall have no obligation to pay assessments to the California Insurance Guaranty Association for covered claims obligation arising from policies of basic residential earthquake insurance written by nonparticipating insurers. (Amended by Stats. 1996, Ch. 967, Sec. 18. Effective September 27, 1996.)
  64. 10089.35.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    If the authority may run out of capital, the board must propose a pro rata or installment claims plan and keep enough capital to keep the authority operating; the commissioner must then set a reinstatement schedule, order the authority to stop new renewals, and may seek court orders.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.35. (a) If at any time the board determines that all the authority’s available capital may be exhausted and no source of additional funds such as assessments, reinsurance, or private capital market moneys will be available to the authority to pay policyholder claims, the board shall draw up and present to the commissioner a plan to pay policyholder claims on a pro rata basis or in installment payments. The board shall maintain sufficient capital to ensure the continued operation of the authority for the purpose of implementing the proration or installment plan. At this point, the commissioner shall adopt a schedule for reinstitution of an insurer’s statutory obligation to offer earthquake coverage by a means other than placement in the authority. In no event shall the schedule adopted pursuant to this subdivision be for a period longer than six months. (b) Upon presentation of that plan to prorate or pay in installments, the commissioner shall order the authority to cease renewing or accepting new earthquake insurance policies and may apply to the superior court for orders or injunctions as the commissioner deems necessary to prevent any event or occurrence adverse to the authority, including, but not limited to, any or all of the following: (1) Interference with the commissioner’s consideration and implementation of a plan for pro rata or installment payment of policyholder claims under this section. (2) Interference with or attachment of the assets of the authority. (3) Institution or prosecution of any actions or proceedings against the authority. (4) The obtaining of preferences, judgments, attachments, or other liens or levies against the authority or its assets. (5) The withholding by a participating insurer or any other person of any premium, surcharge, assessment, or other amount lawfully due and owing to the authority. (c) Entry of orders or injunctions obtained by the commissioner upon the application permitted by subdivision (a) shall not vest the superior court with general jurisdiction over the business or assets of the authority or any plan for the pro rata or installment payment of policyholder claims under this section, and the superior court’s jurisdiction shall be limited to the entry and enforcement of those orders and injunctions. (d) The State of California shall have no liability for payment of claims in excess of funds available pursuant to this chapter. The State of California, and any of the funds of the State of California, shall have no obligations whatsoever for payment of claims or costs arising from this act, except as specifically provided in this act. (Amended by Stats. 1996, Ch. 968, Sec. 10. Effective September 27, 1996.)
  65. 10089.36.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    If Congress enacts a natural disaster program, the panel must meet, prepare a plan to dissolve the authority or align the act with the federal program, and then recommend a plan of action to the board and the Legislature.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.36. In the event a natural disaster program is enacted by Congress, the panel shall convene and prepare a plan to dissolve the authority or conform this act with the federal program. Following its deliberations, the panel shall recommend a plan of action to the board and the Legislature. (Amended by Stats. 1996, Ch. 968, Sec. 11. Effective September 27, 1996.)
  66. 10089.37.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The board must set aside a capped amount of investment income each year, and the authority must use those funds for an Earthquake Loss Mitigation Fund.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.37. The board shall set aside in each calendar year an amount equal to 5 percent of investment income accruing on the authority’s invested funds, or five million dollars ($5,000,000), whichever is less, if deemed actuarially sound by a consulting actuary employed or hired by the authority, to be maintained as a subaccount in the California Earthquake Authority Fund. The authority shall use those funds to fund the establishment and operation of an Earthquake Loss Mitigation Fund. In the event a set-aside of mitigation-related funds may impair the actuarial soundness of the authority, the board may delay the implementation of this section. Any delay shall be reported to the Legislature and the commissioner and reported publicly. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  67. 10089.38.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    If an economical system satisfactory to the board and the commissioner is developed and implemented to prevent misuse of mitigation funds, the Earthquake Loss Mitigation Fund may be used for grants, loans, or loan guarantees to dwelling owners who want to retrofit homes against earthquake damage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.38. Upon the development and implementation of an economical system satisfactory to the board and the commissioner to prevent misapplication of mitigation funds, the Earthquake Loss Mitigation Fund may be applied to supply grants and loans or loan guarantees to dwelling owners who wish to retrofit their homes to protect against earthquake damage. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  68. 10089.39.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must put the Earthquake Loss Mitigation Fund’s operational rules into its plan of operations and, by July 1, 2000, create a statewide plan to speed up the residential retrofit program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.39. (a) The operational rules of the Earthquake Loss Mitigation Fund shall be part of the authority’s plan of operations. (b) On or before July 1, 2000, the authority shall establish in the operational rules of the Earthquake Loss Mitigation Fund, a plan for the expedited expansion of the residential retrofit program statewide. The program shall include personnel and administrative requirements and all other programmatic specifications necessary to the implementation of the plan. (Amended by Stats. 1999, Ch. 715, Sec. 2. Effective January 1, 2000.)
  69. 10089.395.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The CRMP must run the grant program and may give grants to eligible homeowners for seismic retrofitting, subject to limits and board-adopted procedures.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.395. (a) The Legislature finds and declares that there exists the California Residential Mitigation Program, also known as the CRMP, a joint powers authority created in 2012 by agreement between the California Earthquake Authority and the Office of Emergency Services. (b) Any funds appropriated by the Legislature for the purpose of funding the CRMP’s implementation of the grant program described in this section shall be to the department, which shall provide the funds to the California Earthquake Authority’s Earthquake Loss Mitigation Fund, pursuant to subdivision (k) of Section 10089.7 and according to the terms of an agreement negotiated by the department and the authority. The authority, the prime funder of the CRMP, shall then transfer the funds from its Earthquake Loss Mitigation Fund to the CRMP for further implementation and expansion of the CRMP’s Earthquake Brace and Bolt program, upon actions by the respective governing boards of the authority and the CRMP, authorizing and accepting that transfer. The CRMP shall, pursuant to the requirements of this section, implement the grant program and make grants that assist a qualifying owner of a single-family residential structure by defraying the owner’s costs of seismic retrofitting of the structure. (c) The CRMP may make a grant to an applicant who satisfies all of the following: (1) The applicant is an owner of record of, and lives in, the structure to be retrofitted. (2) The structure is a single-family, detached, residential building composed of one to four dwelling units. (3) The structure meets structural requirements established pursuant to subdivision (e). (4) The structure is located in a high-risk earthquake area, based on criteria established pursuant to subdivision (e). (5) The retrofit work qualifies as work for which the applicant may receive a grant, based on criteria established pursuant to subdivision (e). (d) Subject to the policies, procedures, and criteria adopted pursuant to subdivision (e), a grant shall not exceed the lesser of 75 percent of the cost of the qualifying retrofit work, or three thousand dollars ($3,000). (e) The governing board of the CRMP shall adopt policies and procedures to implement this section, including, but not limited to, establishing structural eligibility requirements for structures that will receive a grant for seismic retrofit work, defining criteria for determining whether a structure is located in a high-earthquake-risk area, and defining criteria for seismic retrofit work that qualifies as work eligible for receipt of a grant, which may be awarded in amounts of greater or lesser than the amounts established by subdivision (d). In adopting those policies and procedures, the governing board shall provide notice and opportunity for public review and comment, publish the policies and procedures on the CRMP’s Internet Web site, and otherwise make the policies and procedures available to the public. (Added by Stats. 2015, Ch. 25, Sec. 41. (SB 84) Effective June 24, 2015.)
  70. 10089.396.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    CRMP must provide outreach to low-income households and set aside at least 10% of yearly program funds for supplemental grants. Eligible low-income homeowners may apply for those grants, which are awarded first-come, first-served until the set-aside is exhausted.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.396. (a) In administering the Earthquake Brace and Bolt program pursuant to Section 10089.395, the California Residential Mitigation Program (CRMP) shall do both of the following: (1) Provide outreach to low-income households to increase awareness of the Earthquake Brace and Bolt program in those communities where the program is offered. (2) Set aside at least 10 percent of the funds available each year for the program pursuant to Section 10089.395 to provide supplemental grants to homeowners in low-income households who were selected to receive grants pursuant to subdivision (c) of Section 10089.395. (A) A homeowner in a low-income household may apply for a supplemental grant, which shall be awarded on a first-come-first-served basis until the funding set aside for supplemental grants is exhausted. (B) The supplemental grant shall be in an amount as necessary to provide the homeowner in the low-income household with 90 percent of the retrofit costs remaining after payment of the grant awarded to that homeowner pursuant to subdivision (c) of Section 10089.395. (C) Any unexpended supplemental grant funding shall be available to provide grants to other eligible applicants on the waiting list. (b) For purposes of this section, “low-income household” means a household that has an income at or below 80 percent of the median household income in California. (Added by Stats. 2019, Ch. 219, Sec. 1. (AB 548) Effective January 1, 2020.)
  71. 10089.397.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section lets the CRMP run a seismic retrofit grant program and requires the department and the CRMP to move and manage funds for it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.397. (a) The Legislature finds and declares that there exists the California Residential Mitigation Program, also known as the CRMP, a joint powers authority created in 2012 by agreement between the California Earthquake Authority and the Office of Emergency Services. (b) Any funds appropriated by the Legislature for the purpose of funding the CRMP’s implementation of the grant program described in this section shall be to the department, which shall provide the funds to the California Earthquake Authority’s Earthquake Loss Mitigation Fund, pursuant to subdivision (k) of Section 10089.7 and according to the terms of an agreement negotiated by the department and the authority. The authority, the prime funder of the CRMP, shall then transfer the funds from its Earthquake Loss Mitigation Fund to the CRMP for further implementation and expansion of the CRMP’s Earthquake Brace and Bolt program, upon actions by the respective governing boards of the authority and the CRMP, authorizing and accepting that transfer. The CRMP may, pursuant to the requirements of this section, implement the grant program and on or after July 1, 2015, make grants that assist a qualifying owner of a multiunit residential structure by defraying the owner’s cost of seismic retrofitting of the structure. (c) The CRMP may make a grant to an applicant who satisfies all of the following: (1) The applicant is an owner of record of the structure to be retrofitted and has secured the written consent of all other owners of the structure to make a grant application. (2) The structure is a residential building of not fewer than two, but not more than 10, dwelling units. (3) The dwelling units in the structure are occupied by tenants who are members of “lower income households,” as defined in subdivision (a) of Section 50079.5 of the Health and Safety Code. (4) The structure meets structural requirements established pursuant to subdivision (d). (5) The structure is located in a high-risk earthquake area, based on criteria established pursuant to subdivision (d). (6) The retrofit work qualifies as work for which the applicant may receive a grant, based on criteria established pursuant to subdivision (d). (d) The governing board of the CRMP shall adopt policies and procedures necessary to implement this section, including, but not limited to, establishing the means by which the applicant may satisfy the tenant-related economic eligibility criteria for the program, establishing structural eligibility requirements for a structure that will receive seismic retrofit work, defining criteria for determining whether a structure is located in a high-risk earthquake area, defining criteria for seismic retrofit work that qualifies as work eligible for receipt of a grant, and defining criteria for the determination of the amount of a grant awarded pursuant to the program created by this section. In adopting those policies and procedures, the governing board shall provide notice and opportunity for public review and comment, publish the policies and procedures on the CRMP’s Internet Web site, and otherwise make the policies and procedures available to the public. (Added by Stats. 2015, Ch. 25, Sec. 42. (SB 84) Effective June 24, 2015.)
  72. 10089.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. )

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    A person cannot use a geographically based earthquake assessment system or program for certain condominium-loan purposes unless its assumptions and methodology have been submitted to and approved by the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Earthquake Insurance [10081 - 10089.4] ( Chapter 8.5 added by Stats. 1984, Ch. 916, Sec. 1. ) ## 10089.4. (a) No person may use a geographically based earthquake assessment system or program for the purpose of requiring earthquake insurance, or imposing a fee or any other condition in lieu of requiring earthquake insurance, in connection with a loan secured by a condominium project or an individual unit of a condominium project unless the system’s or program’s analytical assumptions and methodology used in the assessment have been submitted to and approved by the commissioner. In determining whether to approve a submission, the commissioner shall consult with and consider the input of the State Geologist. (b) The department may charge a fee to defray the actual cost of reviewing earthquake risk assessment methods. Any costs incurred by the State Geologist or Department of Conservation as required by subdivision (a) shall be reimbursed by the department. (Added by Stats. 1996, Ch. 54, Sec. 1. Effective June 6, 1996.)
  73. 10089.40.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority’s rates must be actuarially sound, based on scientific information, and not excessive, inadequate, or unfairly discriminatory.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.40. (a) Rates established by the authority shall be actuarially sound so as to not be excessive, inadequate, or unfairly discriminatory. Rates shall be established based on the best available scientific information for assessing the risk of earthquake frequency, severity, and loss. Rates shall be equivalent for equivalent risks. Factors the board shall consider in adopting rates include, but are not limited to, the following: (1) Location of the insured property and its proximity to earthquake faults and to other geological factors that affect the risk of earthquake or damage from earthquake. (2) The soil type on which the insured dwelling is built. (3) Construction type and features of the insured dwelling. (4) Age of the insured dwelling. (5) The presence of earthquake hazard reduction factors, including those set forth in subdivision (a) of Section 10089.2. (b) (1) If scientific information from geologists, seismologists, or similar experts that assesses the frequency or severity of risk of earthquake is considered in setting rates or in arriving at the modeling assumptions upon which those rates are based, the information may be used to establish differentials among risks only if the information, assumptions, and methodology used are consistent with the available geophysical data and the state of the art of scientific knowledge within the scientific community. (2) Scientific information from geologists, seismologists, or similar experts shall not be conclusive to support the establishment of different rates between the most populous rating territories in the northern and southern regions of the state unless that information, as analyzed by experts such as the United States Geological Survey, the California Division of Mines and Geology, and experts in the scientific or academic community, clearly shows a higher risk of earthquake frequency, severity, or loss between those most populous rating territories to support those differences. (3) It is not the intent of the Legislature in adopting this subdivision to mandate a uniform statewide flat rate for California Earthquake Authority policies. (c) The classification system established by the board shall not be adjusted or tempered in any way to provide rates lower than are justified for classifications that present a high risk of loss or higher than are justified for classifications that present a low risk of loss. (d) Policyholders who have retrofitted their homes to withstand earthquake shake damage according to standards and to the extent set by the board shall enjoy a premium discount or credit of 5 percent on the authority-issued policy of residential earthquake coverage. For residential dwellings, the 5-percent discount shall be applicable if the dwelling, at a minimum, meets the following requirements: the dwelling was built prior to 1979, is tied to the foundation, has cripple walls braced with plywood or its equivalent, and the water heater is secured to the building frame. For mobilehomes, the 5-percent discount shall be applicable if the mobilehome, at a minimum, is reinforced by an earthquake resistant bracing system certified by the Department of Housing and Community Development. The board may approve a premium discount or credit above 5 percent, as long as the discount or credit is determined actuarially sound by the authority. (e) All rates shall be approved by the commissioner prior to their use. (Amended by Stats. 2001, Ch. 745, Sec. 154. Effective October 12, 2001.)
  74. 10089.41.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    A participating insurer’s offer of an authority policy counts as compliance, and if the authority stops operating, carriers must switch to another authorized way of offering coverage. The commissioner must set the timing for that switch.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.41. (a) The offer of an authority policy by a participating insurer shall constitute a mode of insurer compliance with Chapter 8.5 (commencing with Section 10081) of Part 1 of Division 2, and as set forth in Section 10084. (b) If the authority ceases operation for any reason, including, but not limited to, repeal of this chapter or insolvency of the authority, participating carriers shall no longer be able to satisfy the requirement to offer residential earthquake insurance coverage by placement within the authority. The commissioner shall adopt a schedule in accordance with subdivision (a) of Section 10089.35 to establish when participating carriers shall be required to offer coverage by another mode authorized pursuant to Chapter 8.5 (commencing with Section 10081) of Part 1 of Division 2 to those policyholders for whom they write the underlying policies of residential property insurance. (c) If the authority ceases operation pursuant to a statute enacted by the Legislature, that statute shall determine the duty of participating insurers to provide earthquake insurance pursuant to Chapter 8.5 (commencing with Section 10081). Chapter 8.5 (commencing with Section 10081) shall remain in effect unless specifically repealed by that statute. (Amended by Stats. 1996, Ch. 968, Sec. 13. Effective September 27, 1996.)
  75. 10089.42.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    A participating insurer must give each residential property insured annual marketing documents produced at the authority’s expense.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.42. (a) At least once each year a participating insurer shall provide each of its residential property insureds with marketing documents produced at the authority’s expense. (b) This section shall become operative on January 1, 2016. (Added by Stats. 2014, Ch. 419, Sec. 11. (AB 2064) Effective January 1, 2015.)
  76. 10089.43.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    If the Legislature terminates the authority, its remaining funds must be transferred to the General Fund unless the Legislature directs otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.43. Upon termination of the authority by the Legislature, its remaining funds shall be transferred to the General Fund unless otherwise directed by the Legislature. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  77. 10089.44.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Premiums collected by the authority are exempt from the state insurance premium tax.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.44. Notwithstanding any other provision of law, premiums collected by the authority shall be exempt from collection of the state’s insurance premium tax, and the amount of tax foregone by the state shall be considered for all purposes a contribution by the state and its citizens to the capital and operating revenues of the authority. No funds contributed to, or collected or held by, the authority shall be available to meet the general obligations of the state unless the authority has been terminated and wound up, and all funds due or owing to any person pursuant to this act have been paid, held in reserve, or returned. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  78. 10089.46.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Bonds issued under this chapter are not state debt and are payable only from the funds provided in this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.46. Bonds issued under this chapter shall not be a debt or liability of the state or of any political subdivision of the state, or a pledge of the full faith and credit of the state or of any political subdivision, but shall be payable solely from the funds provided in this chapter. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  79. 10089.47.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Bonds issued by the authority may be treated as legal investments for specified trust and fiduciary funds, and they may be deposited with or received by certain state or local public officers and agencies when law allows similar deposits of state obligations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.47. Bonds issued by the authority are legal investments for all trust funds, the funds of all insurance companies, banks, trust companies, executors, administrators, trustees, and other fiduciaries. The bonds are securities that may legally be deposited with, and received by, any state or municipal officer or agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now, or may hereafter be, authorized by law, including deposits to secure public funds. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  80. 10089.48.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Interest earned on bonds issued by the authority is exempt from state personal income tax and corporate income tax.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.48. Interest earned on any bonds issued by the authority shall at all times be free from state personal income tax and corporate income tax. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  81. 10089.49.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The state must not interfere with rights tied to the authority’s revenue pledges or impair bondholders’ rights or remedies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.49. The state hereby pledges to and agrees with the holders of bonds that the state will not limit, alter, or restrict the rights hereby vested in the authority to fulfill each pledge of revenues and any other terms of any agreement made with or for the benefit of the holders of bonds or in any way impair the rights or remedies of the holders of bonds. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  82. 10089.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section defines key terms for the California Earthquake Authority and sets capital-based minimum coverage levels for additional living expenses in basic residential earthquake insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.5. As used in this chapter: (a) “Authority” means the California Earthquake Authority. (b) “Available capital” means the sum of all moneys and invested assets actually held in the California Earthquake Authority Fund, less loss reserves and loss adjustment expense reserves under all of the authority’s policies of residential earthquake insurance, and less the unearned premium reserve. “Available capital” includes all interest or other income from the investment of money held in the California Earthquake Authority Fund. “Available capital” does not include unearned premium, the proceeds of contracts of reinsurance procured by or in the name of the authority pursuant to subdivision (a) of Section 10089.10, any funds realized on capital market contracts authorized by subdivision (b) of Section 10089.10, or the proceeds of bonds issued by or in the name of the authority. (c) “Basic residential earthquake insurance” means that policy of residential earthquake insurance described in Section 10089 except as follows: (1) (A) If one year after the authority commences operation the authority has available capital equal to or exceeding seven hundred million dollars ($700,000,000), any policy issued or renewed on or after that date shall provide, less any applicable deductible, not less than two thousand five hundred dollars ($2,500) in coverage for additional living expenses. (B) If the authority met the available capital requirements of subparagraph (A) and two years after the authority commences operation the authority has available capital equal to or exceeding seven hundred million dollars ($700,000,000), any policy issued or renewed on or after that date shall provide, less any applicable deductible, not less than three thousand dollars ($3,000) in coverage for additional living expenses. (2) (A) If the authority did not meet the available capital requirement of subparagraph (A) of paragraph (1) but, two years after the authority commences operation the authority has available capital equal to or exceeding seven hundred million dollars ($700,000,000), any policy issued or renewed on or after that date shall provide, less any applicable deductible, not less than two thousand five hundred dollars ($2,500) in coverage for additional living expenses. (B) If the authority met the available capital requirements as provided by subparagraph (A) and three years after the authority commences operation the authority has available capital equal to or exceeding seven hundred million dollars ($700,000,000), any policy issued or renewed on or after that date shall provide, less any applicable deductible, not less than three thousand dollars ($3,000) in coverage for additional living expenses. (d) “Board” means the governing board of the authority. (e) “Bonds” means bonds, notes, commercial paper, variable rate and variable maturity securities, and any other evidence of indebtedness. (f) “Capital market contract” means an agreement between the authority and a purchaser pursuant to which the purchaser agrees to purchase bonds of the authority. (g) “Nonparticipating insurer” means an insurer that elects not to transfer or place any residential earthquake policies in the authority. (h) “Panel” means the advisory panel of the authority. (i) “Participating insurer” means an insurer that has elected to join the authority. (j) “Policy of residential property insurance” means those policies described in Section 10087. (k) “Private capital market” means one or more purchasers of bonds of the authority pursuant to a capital market contract. (l) “Qualifying residential property” includes all those residential dwellings set forth in Section 10087. (m) “Residential earthquake insurance market share” means an individual insurer’s total direct premium received for (1) residential earthquake policies and endorsements written or renewed by the insurer in California and (2) residential earthquake policies written or renewed by the authority for which the insurer has written or renewed an underlying policy of residential property insurance, divided by the total gross premiums received by all admitted insurers and the authority for their basic residential earthquake insurance in California. (n) “Residential property insurance market share” means an individual insurer’s total gross premiums received for residential property insurance policies written or renewed by the insurer, divided by the total gross premiums received by all admitted insurers for residential property insurance in California. (o) “Revenue” means all income and receipts of the authority, including, but not limited to, income and receipts derived from premiums, bond purchase agreements, capital contributions by insurers, assessments levied on insurers, surcharges applied to authority earthquake policyholders, and all interest or other income from investment of money in any fund or account of the authority established for the payment of principal or interest, or premiums on bonds, including reserve funds. (p) “Unearned premium reserve” means an amount equal to the unearned portion of premiums due to, or received by, the authority on all of its policies of residential earthquake insurance, without deduction on account of reinsurance ceded. The unearned premium reserve shall be charged as a reserve liability in determining the authority’s financial condition. Because the unearned premium reserve is established and maintained to protect the interests of authority policyholders in their unexpired authority policies, authority assets in an amount equal to the unearned premium reserve shall not be subject to encumbrance by, or distribution to, creditors of or claimants against the authority unless and until the authority has paid in full all policyholder claims and policyholder liabilities. (Amended by Stats. 2007, Ch. 303, Sec. 1. Effective January 1, 2008. Operative July 1, 2008, by second Sec. 8 of Ch. 303.)
  83. 10089.50.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The Treasurer may enter into one or more credit facilities allowing the authority to draw up to $1 billion.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.50. The Treasurer may from time to time enter into one or more credit facilities permitting the authority to draw an amount up to one billion dollars ($1,000,000,000) with payment, interest rate, indemnity, compensation, security, default, remedy, and other terms and conditions as determined by the authority. All drawings under these credit facilities shall be available as funding for the authority as provided in Section 10089.29. (Amended by Stats. 1996, Ch. 967, Sec. 19. Effective September 27, 1996.)
  84. 10089.51.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority may pledge specified earthquake insurance surcharges to credit facility providers and bond owners to secure its obligations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.51. The authority shall have the power to pledge to the providers of credit facilities and to the owners of bonds the surcharges imposed or to be imposed pursuant to subdivision (b) of Section 10089.29 to secure payment of all obligations of the authority under those credit facilities and bonds, respectively. A pledge of those surcharges shall constitute a lien and security interest that shall immediately attach to the surcharges whether or not imposed or collected at the time the pledge is made, and shall be effective, valid, and binding and enforceable against the authority, the Treasurer, the beneficiaries of the basic residential earthquake insurance issued from time to time, and all others asserting rights in the surcharges to the extent set forth, and in accordance with, the terms of the pledge contained in the credit facilities or bonds, as the case may be, whether or not those parties have notice of the pledge and without the need for any physical delivery, recordation, filing, or further act. (Added by Stats. 1995, Ch. 944, Sec. 2. Effective January 1, 1996.)
  85. 10089.52.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section says Sections 10089.50 and 10089.51 are not meant to limit the authority under Government Code Section 5450 or Section 5922(c).

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.52. Nothing in Section 10089.50 or 10089.51 is intended to limit the applicability to the authority of any provision of Section 5450 or subdivision (c) of Section 5922 of the Government Code. (Added by Stats. 1996, Ch. 967, Sec. 20. Effective September 27, 1996.)
  86. 10089.53.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    Insurers that withdraw from the authority, and participating insurers if the authority stops operating, must charge annual residential earthquake insurance surcharges and send the collected money to the appointed trustee.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.53. (a) Any insurer that withdraws from the authority under Section 10089.19 while bonds or other debt is outstanding shall impose annually a premium surcharge on each policy of residential earthquake insurance written by it equal in percentage amount, calculated as a percentage of the basic residential earthquake insurance premium, to the percentage amount of the surcharge being imposed in that year by the authority pursuant to subdivision (b) of Section 10089.29. That insurer shall remit promptly all those surcharges collected by it to the trustee appointed pursuant to Section 10089.22. The surcharges shall be used solely to repay the bonded indebtedness or other debt issued pursuant to subdivision (a) of Section 10089.29. If the sum of the surcharges remitted to the trustee pursuant to this section plus the amount of the surcharges imposed by the authority pursuant to subdivision (b) of Section 10089.29 would exceed the amount authorized by that provision, then surcharges of the authority shall be reduced by an amount equal to that excess. (b) Should the Legislature and Governor approve legislation that causes the authority to cease operation while bonds or other debt are outstanding, participating insurers shall impose annually a premium surcharge on each policy of residential earthquake insurance written by them equal in percentage amount, calculated as a percentage of the basic residential earthquake insurance premium, to the percentage amount of the surcharge being imposed in that year by the authority pursuant to subdivision (b) of Section 10089.29. Those insurers shall remit promptly all these surcharges collected by them to the trustee appointed pursuant to Section 10089.22. The surcharges shall be used solely to repay the bonded indebtedness or other debt issued pursuant to subdivision (a) of Section 10089.29. If the sum of the surcharges remitted to the trustee pursuant to this section plus the amount of the surcharges imposed by the authority pursuant to subdivision (b) of Section 10089.29 would exceed the amount authorized by that provision, then surcharges of the authority shall be reduced by an amount equal to that excess. (Added by Stats. 1996, Ch. 967, Sec. 21. Effective September 27, 1996.)
  87. 10089.54.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must stop issuing new earthquake insurance policies after a specified federal trigger and 180-day delay, unless later authorized by statute. It must keep renewing existing policies and accept certain applications.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.54. (a) Unless authorized by a statute enacted subsequent to the effective date of this section, the authority shall cease writing new earthquake insurance policies 180 days after implementation by both the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Association (“Freddie Mac”) of policies to require earthquake insurance for any single-family residential structure, other than a condominium unit or townhome, as a condition of purchasing a mortgage or trust deed secured by that structure. Notwithstanding this restriction, the authority shall continue to renew its existing earthquake insurance policies and shall accept applications for earthquake insurance from residential property insurance policyholders of participating insurers in accordance with subdivision (b) of Section 10086. (b) In the event that both the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Association (“Freddie Mac”) have proposed to implement policies to require earthquake insurance for any single-family residential structure, other than a condominium unit or townhome, as a condition of purchasing a mortgage or trust deed secured by that structure, it is the intent of the Legislature that the Legislature should convene to consider whether the authority should continue to write new earthquake insurance policies, with or without modification, or to cease writing new earthquake insurance policies. (Added by Stats. 1996, Ch. 969, Sec. 4. Effective January 1, 1997.)
  88. 10089.55.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The board must run earthquake-insurance affairs, may not administer the Wildfire Fund except as stated, and must post an agenda at every board meeting identifying it as earthquake-insurance business.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.55. The board shall conduct the affairs of the authority with respect to transacting earthquake insurance, including administering the California Earthquake Authority Fund. Except as provided in paragraph (2) of subdivision (a) of Section 10089.6, the board has no authority to administer the Wildfire Fund. At every meeting of the board, the board shall post an agenda that clearly identifies the meeting as relating to the business of earthquake insurance. (Added by Stats. 2019, Ch. 81, Sec. 6. (AB 111) Effective July 12, 2019.)
  89. 10089.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The California Earthquake Authority is created and must be governed and operated under the board, commissioner, and council structure described here.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.6. (a) (1) There is hereby created the California Earthquake Authority, which shall be administered and governed by the governing board described in Section 10089.7 under the authority of the commissioner and overseen by the California Catastrophe Response Council solely with regard to any administrative or support services the authority may provide to, or for the benefit of, the Wildfire Fund created pursuant to Section 3284 of the Public Utilities Code or the Wildfire Fund Administrator appointed pursuant to Section 8899.72 of the Government Code. All other businesses or activities of the authority unrelated to the Wildfire Fund shall be governed solely by the board. The authority shall have the powers conferred by this chapter. The authority shall be authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance in the manner set forth in Sections 10089.26, 10089.27, and 10089.28. The authority shall have no authority to transact any other type of insurance business. (2) The authority shall be authorized to exercise the powers of the Wildfire Fund Administrator as provided in Section 3281 of the Public Utilities Code until the appointment of the administrator by the council. (b) (1) The investments of the authority shall be limited to those securities eligible under Section 16430 of the Government Code. (2) The rights, obligations, and duties owed by the authority to its insureds, beneficiaries of insureds, and applicants for insurance shall be the same as the rights, obligations, and duties owed by insurers to its insureds, beneficiaries of insureds, and applicants for insurance under common law, regulations, and statutes. The authority shall be liable to its insureds, beneficiaries of insureds, and applicants for insurance as an insurer is liable to its insureds, beneficiaries of insureds, and applicants for insurance under common law, regulations, and statutes. (c) The operating expenses of the authority shall be capped at not more than 6 percent of the premium income received by the authority. The funds shall be available to pay any advocacy fees awarded in a proceeding under subdivision (c) of Section 10089.11. (d) For purposes of this section, the term “operating expenses of the authority” excludes solely the following: (1) The costs of and transaction expenses associated with risk-transfer purchases, including the purchase of reinsurance and with capital-market contracts. (2) The expense of securing and repaying bonds. (3) The cost of repayment of bonds guaranteed, insured, or otherwise backed by any department or agency of the United States or of this state, or by any private entity. (4) Payments to third parties for all of the following services provided to the authority: (A) Investment. (B) Loss-modeling. (C) Legal services. (5) Costs associated with the authority’s efforts to acquaint the public with and market authority products, promote earthquake preparedness, and earthquake-loss mitigation under the authority’s duly adopted strategic plan. (6) Producer compensation. (7) Participating insurer fees and reimbursement amounts arising under written contracts. (8) Amounts paid by the authority to support research in seismic science and seismic engineering. (9) Loans, grants, and expenses to support and maintain the authority’s earthquake loss-mitigation goals and programs, whether conducted by the authority alone or in collaboration with or by other persons. (10) The costs of and loss-adjustment expenses associated with adjusting and paying policyholder claims for earthquake losses that are incurred by the authority under its earthquake insurance policies, including all costs and expenses associated with claim-related litigation, provided that all of those costs and expenses shall be reported to the Legislature in the manner required by subdivision (e) of Section 10089.13. (11) Any cost incurred to provide administrative services and other support to or for the benefit of the Wildfire Fund created pursuant to Section 3284 of the Public Utilities Code, which cost shall be borne by the Wildfire Fund. (e) The board may authorize the authority to contract with the Wildfire Fund created under Section 3284 of the Public Utilities Code to provide services and other support as the Wildfire Fund may require. (Amended by Stats. 2019, Ch. 396, Sec. 10. (AB 1513) Effective January 1, 2020.)
  90. 10089.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    This section sets up the California Earthquake Authority’s governing board and advisory panel, gives the board broad operating powers, and imposes disclosure, conflict, post-employment, and indemnity rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.7. (a) The authority shall be governed by a three-member governing board consisting of the Governor, the Treasurer, and the Insurance Commissioner, each of whom may name designees to serve as board members in their place. The Speaker of the Assembly and the Chairperson of the Senate Committee on Rules shall serve as nonvoting, ex officio members of the board, and may name designees to serve in their place. (b) The board shall be advised by an advisory panel whose members shall be appointed by the Governor, except as provided in this subdivision. The advisory panel shall consist of four members who represent insurance companies that are licensed to transact fire insurance in the state, two of whom shall be appointed by the commissioner, two licensed insurance agents, one of whom shall be appointed by the commissioner, and three members of the public not connected with the insurance industry, at least one of whom shall be a consumer representative. In addition, the Speaker of the Assembly, and the Chairperson of the Senate Committee on Rules may each appoint one member of the public not connected with the insurance industry. Panel members shall serve for four-year terms, which may be staggered for administrative convenience, and panel members may be reappointed. The commissioner shall be a nonvoting, ex officio member of the panel and shall be entitled to attend all panel meetings, either in person or by representative. (c) The board shall have the power to conduct the affairs of the authority and may perform all acts necessary or convenient in the exercise of that power. Without limitation, the board may: (1) employ or contract with officers and employees to administer the authority; (2) retain outside actuarial, geological, and other professionals; (3) enter into other obligations relating to the operation of the authority; (4) invest the moneys in the California Earthquake Authority Fund; (5) obtain reinsurance and financing for the authority as authorized by this chapter; (6) contract with participating insurers to service the policies of basic residential earthquake insurance issued by the authority; (7) issue bonds payable from and secured by a pledge of the authority of all or any part of the revenues of the authority to finance the activities authorized by this chapter and sell those bonds at public or private sale in the form and on those terms and conditions as the Treasurer shall approve; (8) pledge all or any part of the revenues of the authority to secure bonds and any repayment or reimbursement obligations of the authority to any provider of insurance or a guarantee of liquidity or credit facility entered into to provide for the payment of debt service on any bond of the authority; (9) employ and compensate bond counsel, financial consultants, and other advisers determined necessary by the Treasurer in connection with the issuance and sale of any bonds; (10) issue or obtain from any department or agency of the United States or of this state, or any private company, any insurance or guarantee of liquidity or credit facility determined to be appropriate by the Treasurer to provide for the payment of debt service on any bond of the authority; (11) engage the commissioner to collect revenues of the authority; (12) issue bonds to refund or purchase or otherwise acquire bonds on terms and conditions as the Treasurer shall approve; (13) exercise the powers of the California Catastrophe Response Council created in Section 8899.70 of the Government Code until a majority of the council members are appointed; and (14) perform all acts that relate to the function and purpose of the authority, whether or not specifically designated in this chapter. (d) The authority shall reimburse board and panel members for their reasonable expenses incurred in attending meetings and conducting the business of the authority. (e) (1) There shall be a limited civil immunity, and no criminal liability in a private capacity, on account of any act performed or omitted or obligation entered into in an official capacity, when done or omitted in good faith and without intent to defraud, on the part of the board, the panel, or any member of either, or on the part of any officer, employee, or agent of the authority. This provision shall not eliminate or reduce the responsibility of the authority under the covenant of good faith and fair dealing. (2) In any claim against the authority based upon an earthquake policy issued by the authority, the authority shall be liable for any damages, including damages under Section 3294 of the Civil Code, for a breach of the covenant of good faith and fair dealing by the authority or its agents. (3) In any claim based upon an earthquake policy issued by the authority, the participating carrier shall be liable for any damages for a breach of a common law, regulatory, or statutory duty as if it were a contracting insurer. The authority shall indemnify the participating carrier from any liability resulting from the authority’s actions or directives. The board shall not indemnify a participating carrier for any loss resulting from failure to comply with directives of the authority or from violating statutory, regulatory, or common law governing claims handling practices. (4) A licensed insurer, its officers, directors, employees, or agents, shall not have any antitrust civil or criminal liability under the Cartwright Act (Part 2 (commencing with Section 16600) of Division 7 of the Business and Professions Code) by reason of its activities conducted in compliance with this chapter. Further, the California Earthquake Authority shall be deemed a joint arrangement established by statute to ensure the availability of insurance pursuant to subdivision (b) of Section 1861.03. (5) Subject to Section 10089.21, this chapter shall not be construed to limit any exercise of the commissioner’s power, including enforcement and disciplinary actions, or the imposition of fines and orders to ensure compliance with this chapter, the rules and guidelines of the authority, or any other law or rule applicable to the business of insurance. (6) Except as provided in paragraph (3) and by any other provision of this chapter, liability on the part of, and a cause of action, shall not be permitted in law or equity against, any participating insurer for any earthquake loss to property for which the authority has issued a policy unless the loss is covered by an insurance policy issued by the participating insurer. A policy issued by the authority shall not be deemed to be a policy issued by a participating insurer. (f) The Attorney General, in the Attorney General’s discretion, shall provide a representative of the Attorney General’s office to attend and act as antitrust counsel at all meetings of the panel. The Attorney General shall be compensated for legal service rendered in the manner specified in Section 11044 of the Government Code. (g) The authority may sue or be sued and may employ or contract with that staff and those professionals the board deems necessary for its efficient administration. (h) (1) The authority may contract for the services of a chief executive officer, a chief financial officer, a chief mitigation officer, and an operations manager, and may contract for the services of reinsurance intermediaries, financial market underwriters, modeling firms, a computer firm, an actuary, an insurance claims consultant, counsel, and private money managers. These contracts shall not be subject to otherwise applicable provisions of the Government Code and the Public Contract Code and, for those purposes, the authority shall not be considered a state agency or other public entity. Other employees of the authority shall be subject to civil service provisions. (2) When the authority hires multiple private money managers to manage the assets of the California Earthquake Authority Fund, other than the primary custodian of the securities, the authority shall consider small California-based firms who are qualified to manage the money in the fund. The purpose of this provision is to prevent the exclusion of small qualified investment firms solely because of their size. (i) Members of the board and panel, and their designees, and the chief executive officer, the chief financial officer, the chief mitigation officer, and the operations manager of the authority shall be required to file financial disclosure statements with the Fair Political Practices Commission. The appointing authorities for members and designees of the board and panel shall, when making appointments, avoid appointing persons with conflicts of interest. Section 87406 of the Government Code, the Milton Marks Postgovernment Employment Restrictions Act of 1990, shall apply to the authority. Members of the board, the chief financial officer, the chief executive officer, the chief operations manager, the chief counsel, and any other person designated by the authority shall be deemed to be designated employees for the purpose of that act. In addition, no member of the board, nor the chief financial officer, the chief executive officer, the chief operations manager, and the chief counsel, shall, upon leaving the employment of the authority, seek, accept, or enter into employment or a consulting or other contractual arrangement for the period of one year with any employer or entity that entered into a participating agreement, or a reinsurance, bonding, letter of credit, or private capital markets contract with the authority during the time the employee was employed by the authority, which that member or employee had negotiated or approved, or participated in negotiating. A violation of these provisions shall be subject to enforcement pursuant to Chapter 11 (commencing with Section 91000) of Title 9 of the Government Code. (j) The board shall establish the duties of, and give direction to, the chief mitigation officer, to support and enhance the authority’s appropriate efforts to create and maintain all of the following: (1) Program activities that mitigate against seismic risks, for the benefit of homeowners, other property owners, including landlords with smaller holdings, and the general public of the state. (2) Collaboration with academic institutions, nonprofit entities, and commercial business entities in joint efforts to conduct mitigation-related research and educational activities, and conduct program activities to mitigate against seismic risk. (3) Programs to provide financial assistance in the form of loans, grants, credits, rebates, or other financial incentives to further efforts to mitigate against seismic risk, including, but not limited to, structural and contents retrofitting of residential structures. (4) Collaborations and joint programs with subdivisions and programs of local, state, and federal governments and with other national programs that may further California’s disaster preparedness, protection, and mitigation goals. (5) Other programs, support efforts, and activities deemed appropriate by the board to further the authority’s appropriate mitigation and mitigation-related goals. (k) The authority may accept grants and gifts of property, real or personal, tangible and intangible, and services for the Earthquake Loss Mitigation Fund, established pursuant to Section 10089.37, or the related residential retrofit program from federal, state, and local government sources and private sources. (l) The Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) applies to meetings of the board and the panel. (Amended by Stats. 2019, Ch. 396, Sec. 11. (AB 1513) Effective January 1, 2020.)
  91. 10089.70.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    The department must create a mediation program for certain insurance disputes, and some disputes are excluded.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.70. (a) The department shall establish a program for the mediation of the disputes between insured complainants and insurers arising pursuant to any of the following: (1) A claim that arises under a homeowners’ insurance policy and that involves loss due to a fire for which the Governor has declared a state of emergency pursuant to Section 8558 of the Government Code. The department may refer to mediation any dispute covered by this paragraph in which the parties to the contract wish to discuss possible payments beyond policy limits. (2) A claim that arises under a policy covering earthquake damage and that involves loss due to an earthquake for which the Governor has declared a state of emergency pursuant to Section 8558 of the Government Code. With respect to disputes arising under this paragraph, the program shall apply only to personal lines of insurance related to residential coverage. (3) A claim that arises under automobile collision coverage or automobile physical damage coverage, in a policy as defined in Section 660. (b) The goal of the program shall be to favorably resolve a statistically significant number of disputes sent to mediation under the program. This section shall not apply to any dispute that turns on a question of major insurance coverage or a purely legal interpretation, or any dispute involving the actions of an agent or broker in which the insurer is not alleged to have been responsible for the conduct, or any complaint the commissioner finds to be frivolous, or any dispute in which a party is alleged to have committed fraud. (Amended by Stats. 2005, Ch. 447, Sec. 5. Effective January 1, 2006.)
  92. 10089.71.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    An insured with a qualifying policy dispute may file a written complaint with the department, and the complaint must state that the claim was not settled satisfactorily with the insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.71. Any insured having a dispute with an insurer under a policy that qualifies for this program may file a written complaint with the department. The complaint shall indicate that the complainant has not been able to reach a satisfactory settlement of a claim with the insurer. The department shall, if deemed appropriate, notify the insurer against whom the complaint is made of the nature of the complaint, may request appropriate relief for the complainant, and may meet and confer with the complainant and the insurer in order to attempt resolution of the dispute. (Amended by Stats. 2004, Ch. 357, Sec. 3. Effective August 30, 2004.)
  93. 10089.72.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    After department intervention, the insurer gets 28 calendar days to resolve the dispute, with a possible 7-day extension for good cause. The department may not send a claim or dispute to mediation unless the stated dollar thresholds are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.72. (a) If, after the department’s intervention, the insurer and the insured do not reach agreement, the department may notify the insurer that in order to avoid referral to mediation, the insurer shall have 28 calendar days to resolve the dispute, unless the department, for good cause, extends the period by an additional 7 calendar days. (b) The department may not refer a claim or dispute to mediation unless the amount claimed by the insured exceeds seven thousand five hundred dollars ($7,500) and the amount in dispute exceeds two thousand dollars ($2,000). (Amended by Stats. 2004, Ch. 357, Sec. 4. Effective August 30, 2004.)
  94. 10089.73.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    If a dispute is not resolved on time, the insurer must notify the department; it may also explain the failure. If the insurer thinks the dispute is not eligible for mediation, it must notify the department of that position within the Section 10089.72 time period.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.73. If the dispute is not resolved within the time period prescribed by Section 10089.72, the insurer shall notify the department of the failure, and may include the reason for the failure. The insurer shall, within the time period prescribed by Section 10089.72, notify the department of its position if it believes that the dispute is not eligible for the mediation program. (Amended by Stats. 2001, Ch. 727, Sec. 5. Effective January 1, 2002.)
  95. 10089.74.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    The department must notify the insured about mediation and, if the insured agrees, refer the dispute to mediation, subject to stated exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.74. (a) If the insurer notifies the department of the failure to resolve the dispute, the department shall notify the insured of the insured’s ability to request mediation and ask the insured whether the insured requests mediation. If the insured responds affirmatively, the department shall refer the dispute to mediation. (b) If the insurer fails to give the required notice to the department prior to the expiration of the time limits set forth in Section 10089.72, the department shall notify the insured of the insured’s ability to request mediation and ask the insured whether the insured requests mediation. If the insured responds affirmatively, the department shall refer the dispute to mediation. The department may not refer a dispute to mediation if the matter turns upon any of the reasons or conditions set forth in Section 10089.70, relative to applicability, or if for other good cause the commissioner determines that mediation of the dispute is inappropriate. (c) If the insured has filed a civil complaint, the insurer is excused from mediating under this chapter any claims or disputes involved in the civil action. (Amended by Stats. 2001, Ch. 727, Sec. 6. Effective January 1, 2002.)
  96. 10089.75.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    This section lets insurers and insureds seek or discuss mediation, and gives the commissioner power to order mediation in certain cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.75. (a) Any insurer may inform an insured who has filed a complaint with the department concerning a dispute that qualifies for this program of the existence of the mediation program and may ask the insured to seek mediation under this chapter jointly with the insurer. Any insurer may notify the department of any dispute arising out of a qualifying event that it believes may be appropriately resolved through the mediation program. The department, with respect to that notification, shall proceed as provided in subdivision (a) of Section 10089.74. (b) Notwithstanding Section 10089.82, if the commissioner makes a finding that an individual insurer has engaged in unreasonable or arbitrary refusals to mediate, the commissioner shall have the authority to require that insurer to participate in mediation in all cases deemed by the commissioner appropriate for mediation under this chapter. (c) Any insurer who has been ordered to participate in mediation on a mandatory basis may seek a review of the order by filing in a court of competent jurisdiction within 30 calendar days of the order. The commissioner’s order to participate in mediation, however, may not be stayed during the pendency of any judicial proceeding for any period beyond 60 calendar days after the initial date of the order to participate. The basis for the commissioner’s decision to require an insurer to participate in the mediation program shall not be made public unless review is sought. The commissioner’s decision not to require an insurer to participate, including the basis for the decision, shall be made public. (d) Any insured whose request to mediate his or her claim under this chapter was declined by an insurer may request the commissioner to require the insurer to participate in the mediation program and may seek review in a court of competent jurisdiction of the commissioner’s decision not to require the insurer to participate in the mediation program. The review shall be required to be sought within 30 calendar days after the commissioner’s decision. (Amended by Stats. 2001, Ch. 727, Sec. 7. Effective January 1, 2002.)
  97. 10089.76.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    When a complaint is referred to mediation, the department must immediately send the mediator the information needed for the claim, including the insured’s and insurer’s names and addresses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.76. Upon referral of a complaint to mediation, the department shall immediately transfer all necessary information concerning the claim, including the name and address of the insured and the insurer, to a mediator. (Added by Stats. 1995, Ch. 848, Sec. 1. Effective October 13, 1995.)
  98. 10089.77.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    The department must hire mediators for mediation services, and the commissioner must set mediator standards, including training and conflict-of-interest rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.77. The department shall contract with a diverse pool of mediators for the provision of mediation services. The contractors shall be qualified mediators who meet standards established by the commissioner. The commissioner shall establish standards in consultation with consumer groups, policyholder groups, mediators, alternative dispute resolution groups, insurers, and the State Bar. These standards shall include: (a) Mandatory training that may be provided by the department, which shall include, at a minimum, the legal rules for insurance policy interpretation and the rights of insureds under California law, and methods of determining costs of construction and reconstruction and costs of automobile repair in given geographical areas. (b) A requirement that no mediator participating in this program may have business, familial, contractual, or other affiliation with, or financial interest in, the insured, or in any insurer, insurance agent, or agency. For purposes of this subdivision, an investment in a mutual fund that holds insurer stocks is not a financial interest. Financial interest does not include prior representation of, or an employment or contractual relationship with a law firm or lawyer who represents, one or more insurers or who represents insurance agents in connection with their business affairs, provided the law firm or lawyer has not previously represented any of the parties to the mediation. However, any prior representation, employment, or contractual relationship shall be disclosed to the parties to the mediation. If any party objects to the mediator because of the prior representation, employment, or contractual relationship, the department shall dismiss that mediator and select a new mediator. An objection under this subdivision does not limit a party’s right to object once under subdivision (d). (c) A requirement that no mediator participating in this program may be either a lawyer or an employee of a lawyer or law firm that has represented any party to the mediation in the previous 36 months, or a person who has a business, familial, contractual, or other affiliation with a lawyer or law firm that has represented any party to the mediation in a lawsuit against the insurer in the last 36 months. (d) Each party to the mediation may object once to the mediator assigned by the department. If a party objects to the mediator, the department shall dismiss the mediator and assign another mediator. (Amended by Stats. 2001, Ch. 727, Sec. 8. Effective January 1, 2002.)
  99. 10089.78.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    After a complaint, the mediation service must send notice to the insured and insurer, set a mediation date within 21 calendar days if possible, and the mediator must try to schedule a time both parties can accept.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.78. Upon receipt of a complaint, the mediation service, to the extent possible, shall issue a notice to the insured and the insurer setting a date and time within 21 calendar days of the date of the notice for commencement of a mediation conference. The mediator shall make all reasonable efforts to schedule the mediation at a time agreeable to both parties. The notice shall inform the parties that the cost of mediation will be borne by the insurer, except to the extent provided in Section 10089.81. The notice shall also state that in the event of a proposed settlement the insured may have three business days in which to rescind the agreement, as specified in subdivision (c) of Section 10089.82. (Amended by Stats. 2001, Ch. 727, Sec. 9. Effective January 1, 2002.)
  100. 10089.79.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    Mediation costs must be reasonable and are generally paid by the insurer, except as provided in Section 10089.81. The commissioner may set capped fees for certain mediation disputes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.79. (a) The costs of mediation shall be reasonable, and shall be borne by the insurer, except as provided in Section 10089.81. The commissioner may set a fee not to exceed one thousand five hundred dollars ($1,500) for each homeowners’ or earthquake coverage dispute mediated pursuant to this chapter, and seven hundred dollars ($700) for each automobile coverage dispute mediated pursuant to this chapter. (b) The administrative expenses for the mediation program shall be paid from existing resources available to the department. If additional resources are required by the department, those resources shall be made available by an annual appropriation in the Budget Act. (Amended by Stats. 2005, Ch. 447, Sec. 6. Effective January 1, 2006.)
  101. 10089.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    The authority must operate under a written plan of operations, and the plan goes through board, commissioner, and legislative steps.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.8. (a) The authority shall operate pursuant to a written plan of operations. The panel shall submit a plan to the board for approval. If it approves the plan, the board shall submit the plan to the commissioner for his or her approval. On receiving the commissioner’s approval, the board shall formally adopt the plan and submit the plan to the Legislature. Upon commencement of the issuance of insurance policies by the authority, any subsequent amendments to the plan of operation shall be approved by the board and the commissioner. (b) If at any time the commissioner disapproves the submitted plan or any plan amendments adopted by the board, the board may within 15 days submit changes in the plan to the commissioner. If the commissioner disapproves the plan or the changes in the plan, or if the board fails to submit a plan or to make and submit the requested changes, the commissioner may require the board to adopt that plan or those changes directed by the commissioner. (c) The plan of operations shall establish in detail the policies and procedures of the authority, including, but not limited to, financial operations of the authority, claims procedures, methods of premium collection, procedures consistent with constitutional, statutory, and common law requirements for resolving grievances of applicants or policyholders who are dissatisfied with application handling or adverse claims decisions, whether by the authority or by a participating insurer, assessment procedures, a plan for resolution of assessment disputes between the authority and insureds, grievances between the authority and participating insurers, participating insurer fees and expenses, reasonable underwriting standards, and producer compensation. (d) The plan of operations shall include provisions that establish a mechanism for policyholders to make installment payments of the annual premium paid for coverage by the authority. The authority shall make the installment payment option available to all policyholders who elect to purchase coverage from the authority. The authority may charge a nominal fee to policyholders who opt to make installment payments. The fees, in the aggregate, shall cover the full costs of administering the installment payment option incurred by the authority and the participating insurer but shall not include any interest or finance charge. The authority shall not require a participating insurer, in the case of a policyholder who opts to make installment payments as provided in this subdivision, to remit any portion of the annual premium to the authority before that amount of the annual premium is collected by the participating insurer. The authority shall consult with participating insurers in establishing or amending the provisions of the plan of operations that govern the installment payment option. (Amended by Stats. 1997, Ch. 231, Sec. 1. Effective January 1, 1998.)
  102. 10089.80.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    This section requires insurers, insureds, and the mediator to exchange and produce certain claim-related documents for mediation, and it makes mediation communications confidential with some exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.80. (a) The representatives of the insurer shall know the facts of the case and be familiar with the allegations of the complainant. The insurer or the insurer’s representative shall produce at the settlement conference a copy of the policy and all documents from the claims file relevant to the degree of loss, value of the claim, and the fact or extent of damage. For disputes mediated pursuant to paragraph (1) of subdivision (a) of Section 10089.70, the department shall refer to mediation issues related to the settlement of the claim. The insured and insurer shall produce, to the extent available, documents relevant to the successful mediation of the claim, including documents related to the degree of loss, the value of the claim, and the fact or extent of damage. The mediator may also order production of other documents that the mediator determines to be relevant to the issues under mediation. If a party declines to comply with that order, the mediator may appeal to the commissioner for a determination of whether the documents requested should be produced. The commissioner shall make a determination within 21 days. However, the party ordered to produce the documents shall not be required to produce while the issue is before the commissioner in this 21-day period. If the ruling is in favor of production, any insurer that is subject to an order to participate in mediation issued under subdivision (a) of Section 10089.75 shall comply with the order to produce. Insureds, and those insurers that are not subject to an order to participate in mediation, shall produce the documents or decline to participate further in the mediation after a ruling by the commissioner requiring the production of those other documents. Declination of mediation by the insurer under this section may be considered by the commissioner in exercising authority under subdivision (a) of Section 10089.75. The mediator shall have the authority to protect from disclosure information that the mediator determines to be privileged, including, but not limited to, information protected by the attorney-client or work-product privileges, or to be otherwise confidential. (b) The mediator shall determine prior to the mediation conference whether the insured will be represented by counsel at the mediation. The mediator shall inform the insurer whether the insured will be represented by counsel at the mediation conference. If the insured is represented by counsel at the mediation conference, the insurer’s counsel may be present. If the insured is not represented by counsel at the mediation conference, then no counsel may be present. (c) Section 703.5 and Chapter 2 (commencing with Section 1115) of Division 9 of the Evidence Code apply to a mediation conducted under this chapter. (d) The statements made by the parties, negotiations between the parties, and documents produced at the mediation are confidential. However, this confidentiality shall not restrict the access of the department to documents or other information the department seeks in order to evaluate the mediation program or to comply with reporting requirements. This subdivision does not affect the discoverability or admissibility of documents that are otherwise discoverable or admissible. (Amended by Stats. 2005, Ch. 447, Sec. 7. Effective January 1, 2006.)
  103. 10089.81.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    Parties to the mediation must negotiate in good faith, insurers must pay certain costs if they miss a scheduled mediation when the consumer appears, and insureds may reschedule once if they show good cause.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.81. All parties to the mediation proceeding shall negotiate in good faith and shall have the authority to immediately settle claims. An insurer that fails to appear for a scheduled mediation conference or meeting for which the consumer appears shall pay the consumer for his or her actual expenses incurred in attending the conference plus the value of lost wages. An insured who has good cause for a failure to appear may reschedule one time, at a time set by the mediator. If an insured fails to demonstrate good cause for the first failure to appear or subsequent failures to appear, that insured loses his or her right to mediate the claim under this chapter and shall pay all costs charged by the mediator up to the time of the failure to appear that terminates the mediation. (Added by Stats. 1995, Ch. 848, Sec. 1. Effective October 13, 1995.)
  104. 10089.82.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    This section limits when insurers or insureds can be forced into department mediation, gives the insured a 3-business-day rescission right for a settlement, and restricts what mediated settlements can cover.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.82. (a) An insured may not be required to use the department’s mediation process. An insurer may not be required to use the department’s mediation process, except as provided in Section 10089.75. (b) Neither the insurer nor the insured is required to accept an agreement proposed during the mediation. (c) If the parties agree to a settlement agreement, the insured will have three business days to rescind the agreement. Notwithstanding Chapter 2 (commencing with Section 1115) of Division 9 of the Evidence Code, if the insured rescinds the agreement, it may not be admitted in evidence or disclosed unless the insured and all other parties to the agreement expressly agree to its disclosure. If the agreement is not rescinded by the insured, it is binding on the insured and the insurer, and acts as a release of all specific claims for damages known at the time of the mediation presented and agreed upon in the mediation conference. If counsel for the insured is present at the mediation conference and a settlement is agreed upon that is signed by the insured’s counsel, the agreement is immediately binding on the insured and may not be rescinded. (d) This section does not affect rights under existing law for claims for damage that were undetected at the time of the settlement conference. (e) All settlements reached as a result of department-referred mediation shall address only those issues raised for the purpose of resolution. Settlements and any accompanying releases are not effective to settle or resolve any claim or dispute not addressed by the mediator for the purpose of resolution, nor any claim that the insured may have related to the insurer’s conduct in handling the claim. However, for mediations conducted pursuant to paragraph (1) of subdivision (a) of Section 10089.70, the insurer and insured may agree to a complete settlement and release of all disputes related to the claim, including any claim the insured may have related to the insurer’s conduct in handling the claim, provided the legal effect of the release is disclosed and fully explained to the claimant by the mediator. Referral to mediation or the pendency of a mediation under this article is not a basis to prevent or stay the filing of civil litigation arising in whole or in part out of the same facts. Any applicable statute of limitations or limitation on the insured’s right to sue as set forth in Section 2071 is tolled for the number of days beginning from the notification date to the insurer pursuant to Section 10089.72, until the date on which the mediation is either completed or declined, or the date on which the insured fails to appear for a scheduled mediation for the second time, or, in the event that a settlement is completed, the expiration of any applicable three-business-day cooling off period. (Amended by Stats. 2005, Ch. 448, Sec. 3.5. Effective January 1, 2006.)
  105. 10089.83.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. )

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    The commissioner must file an annual program-status report, the department must collect mediation data every six months, and the mediation service must report settlement amounts; the department may also adopt implementing regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.9. Insurance Mediation [10089.70 - 10089.83] ( Heading of Chapter 8.9 amended by Stats. 2004, Ch. 357, Sec. 1. ) ## 10089.83. (a) On or before August 1 of each year in which this program is in effect, the commissioner shall report to the Governor, the Legislature, and to the committees of the Senate and Assembly having jurisdiction over insurance on the status of the program in the prior year, including statistics about the number of cases suitable for mediation, the number sent to mediation, and the number accepted, as well as declined, by the insurers, and other similar information concerning the operation of the program in the annual report submitted pursuant to Section 12922. (b) At six-month intervals, the department shall collect from the mediators with which it contracts for this service the following information: the number of persons to whom mediation was offered, the number of insurers that accepted and declined mediation, the number of settlements, and of those settlements, the number rejected within the three business day cooling off period. For each settlement, the mediation service shall also report the amount initially claimed by the consumer and the amount agreed to be paid, if any, by the insurer or other party. (c) The department may adopt regulations, including reporting requirements, in the commissioner’s discretion, to implement this chapter. The regulations shall be adopted as emergency regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The adoption of the regulations is deemed necessary for the immediate preservation of the public peace, health or safety, or general welfare. (Amended by Stats. 2006, Ch. 405, Sec. 8. Effective September 22, 2006. Operative January 1, 2007, by Sec. 14 of Ch. 405.)
  106. 10089.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. )

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    When an insurer begins participating in the authority, it must sign a contract with the commissioner and the authority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.6. California Earthquake Authority [10089.5 - 10089.55] ( Chapter 8.6 added by Stats. 1995, Ch. 944, Sec. 2. ) ## 10089.9. (a) Upon commencement of participation in the authority, each participating insurer shall be required to execute a contract with the commissioner and the authority that sets forth its rights and responsibilities as an authority participant. The form of contract shall be part of the authority’s plan of operations and shall be uniform for every participating insurer. (b) The uniform authority participation contract required by subdivision (a) may be modified by the full execution of a writing, in a form drawn in accordance with this act, that embodies the mutual intent and understandings of the commissioner, the authority, and each participating insurer that has executed the authority participation contract. (c) In the event a nonparticipating insurer elects to become a participating insurer of the authority, the authority is authorized to present to the nonparticipating insurer the most recent form of the amended uniform authority participation contract it has executed or proposed to execute with existing participating insurers and require its execution as a condition of authority participation. The acceptance by the authority of, and reliance by the authority on, the executed amended authority participation contract that is authorized by this subdivision shall not be deemed a lack of the uniformity of contract required by subdivision (a). (Amended by Stats. 2007, Ch. 303, Sec. 2. Effective January 1, 2008. Operative July 1, 2008, by second Sec. 8 of Ch. 303.)
  107. 10090.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    This chapter states its purposes: to stabilize the property insurance market in California, ensure basic property insurance is available, encourage use of the normal insurance market, and provide an equitable distribution of responsibility for insuring qualified property through a FAIR Plan and related facilities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10090. The purposes of this chapter are to do all of the following: (a) To assure stability in the property insurance market for property located in the State of California. (b) To assure the availability of basic property insurance as defined by this chapter. (c) To encourage maximum use, in obtaining basic property insurance, of the normal insurance market provided by admitted insurers and licensed surplus line brokers. (d) To provide for the equitable distribution among admitted insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the normal insurance market by the establishment of a FAIR Plan (fair access to insurance requirements), an industry placement facility and a joint reinsurance association. (Amended by Stats. 1969, Ch. 649.)
  108. 10091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    This section defines key insurance terms and says the association must sell only the Section 10089 earthquake policy for basic property insurance and follow specified notice requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10091. Unless the provision or context otherwise requires, the following definitions govern the construction of this chapter: (a) “Association,” “industry placement facility,” or “facility,” means a joint reinsurance association, the California FAIR Plan Association, formed by insurers licensed to write and engaged in writing basic property insurance within this state to assist persons in securing basic property insurance and to formulate and administer a program for the equitable apportionment among insurers of basic property insurance. (b) “Commissioner” means the Insurance Commissioner of this state. (c) (1) “Basic property insurance” means insurance against direct loss to real or tangible personal property at a fixed location in those geographic or urban areas, as designated by the commissioner, from perils insured under the standard fire policy and extended coverage endorsement, from vandalism and malicious mischief, and includes other insurance coverages as may be added with respect to that property by the industry placement facility with the approval of the commissioner or by the commissioner. “Basic property insurance” includes insurance for manufactured homes and mobilehomes under the same terms and conditions as basic property insurance sold for other residential dwellings. “Basic property insurance” does not include insurance on automobile risks, commercial agricultural commodities or livestock, or equipment used to cultivate or transport agricultural commodities or livestock. (2) For the purposes of earthquake coverage that is provided as a component of basic property insurance, the association shall sell only the policy described in Section 10089. In force policies of basic property insurance that include earthquake coverage shall be renewed with the coverage specified in Section 10089, and the association shall comply with the notice requirements of paragraph (2) of subdivision (a) of Section 10086. (d) “Inspection bureau” means the organization or organizations designated by the association with the approval of the commissioner to make inspections to determine the condition of the properties for which basic property insurance is sought and to perform other duties as may be authorized by the association. (e) “Premiums written” means gross direct premiums charged with respect to property in this state on all policies of basic property insurance and the basic property insurance premium components of all multiperil policies, less return premiums, dividends paid or credited to policyholders, or the unused or unabsorbed portions of premium deposits. (f) “Insurer” means a person who undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event, and shall include reciprocals and interinsurance exchanges. (g) “Manufactured home” shall have the same meaning as defined in Section 18007 of the Health and Safety Code. (h) “Mobilehome” shall have the same meaning as defined in Section 18008 of the Health and Safety Code. (Amended by Stats. 2025, Ch. 476, Sec. 1. (SB 525) Effective January 1, 2026.)
  109. 10092.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    This chapter does not apply to county mutual fire insurers or fraternal fire insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10092. This chapter shall not apply to county mutual fire insurers nor to fraternal fire insurers. (Added by Stats. 1968, Ch. 574.)
  110. 10093.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    A qualifying property owner or interest holder who cannot get basic property insurance through normal channels after diligent effort can apply to the facility for an inspection of the property.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10093. (a) Any person having an insurable interest in real or tangible personal property who, after diligent effort, has been unable to obtain basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker, shall be entitled upon application to the facility to an inspection of the property by representatives of the inspection bureau. Such inability to obtain such insurance after diligent effort through normal channels may, in the discretion of the association, be demonstrated by a signed general statement to that effect on a form prescribed by the association. (b) The manner and scope of the inspection and the form of the inspection report shall be prescribed by the facility with the approval of the commissioner. The inspection shall include, but need not be limited to, pertinent structural and occupancy features as well as the general condition of the building and surrounding structures. A representative photograph of the property may be taken as part of the inspection. (c) Promptly after the request for inspection is received, an inspection shall be made and an inspection report filed with the company or companies designated by the facility. A copy of the completed inspection report shall be sent to the facility and to the applicant upon request. (Amended by Stats. 1970, Ch. 633.)
  111. 10094.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    Insurers writing basic property insurance in California must help create and participate in the California FAIR Plan Association, and the governing committee may set program rules and related premium classifications, limits, standards, assessments, and commissions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10094. (a) Within 30 days after the effective date of this chapter, with the approval of the commissioner, all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in multiperil policies, shall establish an industry placement facility, the California FAIR Plan Association, to formulate and administer a program for the equitable apportionment among insurers of basic property insurance that may be afforded to persons having an interest in real or tangible personal property who, after diligent effort, as specified in subdivision (a) of Section 10093, are unable to procure insurance through normal channels from an admitted insurer or a surplus line broker. Each insurer, as a condition of its authority to transact those kinds of insurance in this state, shall participate in an industry placement facility program in accordance with rules to be established by a governing committee, composed of nine insurers annually elected in the manner to be provided in the program. The governing committee shall also have as nonvoting members one representative of insurance agents, one representative of insurance brokers, one representative of surplus line brokers, and one representative of the public, each to be appointed by the Governor. The Speaker of the Assembly and the Chairperson of the Senate Committee on Rules shall serve as nonvoting, ex officio members of the governing committee, and each may name a designee to serve in their place. (b) The governing committee may establish separate classifications of written premiums for the purpose of equitable distribution, but shall not include premiums from automobile risks, commercial agricultural commodities or livestock, or equipment used to cultivate or transport agricultural commodities or livestock. (c) The program may provide, with the approval of the commissioner, for assessment of all members in amounts sufficient to operate the facility, and may establish maximum limits of liability to be placed through the program, reasonable underwriting standards for determining insurability of a risk, and commission to be paid to the licensed producer designated by the applicant. (Amended by Stats. 2025, Ch. 474, Sec. 1. (AB 234) Effective October 9, 2025.)
  112. 10094.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The facility must create a method that gives insurers credit for voluntary basic property insurance writings in certain fire-risk areas, and it must report on those credits to specified officials.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10094.2. (a) Notwithstanding subdivision (c) of Section 10095, the facility shall, pursuant to regulations adopted by the commissioner, provide for a method whereby insurers who voluntarily write basic property insurance on risks located in areas designated at the beginning of the policy period as brush hazard areas by the Insurance Services Office (ISO) or designated at the beginning of the policy period as high or very high fire hazard severity zones as determined and mapped by the Department of Forestry and Fire Protection, or very high fire hazard severity zones as determined and mapped by the Department of Forestry and Fire Protection pursuant to Section 51178 of the Government Code will, to that extent, be proportionately relieved of the liability to participate in a plan adopted pursuant to this chapter. The facility shall, pursuant to regulations adopted by the commissioner, provide for a method whereby insurers who voluntarily write basic property insurance or business owners package insurance on risks located in areas designated as inner-city areas by the commissioner will, to that extent, be proportionately relieved of the liability to participate in a plan adopted pursuant to this chapter. This chapter does not preclude adoption of a plan or plans to allow proportionate credit for voluntary writings in other areas or for other classes of insurance. (b) (1) The facility shall prepare and submit a report to the Governor, the commissioner, and the committees of the Senate and the Assembly having jurisdiction over insurance, identifying the credit for voluntary writings submitted by licensees in the high and very high fire hazard severity zones as determined and mapped by the Department of Forestry and Fire Protection, and the very high fire hazard severity zones as determined and mapped by the Department of Forestry and Fire Protection pursuant to Section 51178 of the Government Code, in order to determine whether or not the designations are sufficient to effectuate the purposes of this section. (2) The facility shall prepare and submit the report required by this subdivision three times, with the first report due on or before July 1, 2023, the second report due on or before July 1, 2025, and the third report due on or before July 1, 2027. (Amended by Stats. 2019, Ch. 833, Sec. 3. (AB 1816) Effective October 12, 2019.)
  113. 10094.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The association must file a new or amended rate application with the commissioner within 90 days after this section takes effect.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10094.5. Within 90 days following the effective date of this section, the association shall file a new or amended rate application with the commissioner consistent with paragraph (1) of subdivision (c) of Section 10091. (Added by Stats. 2021, Ch. 128, Sec. 3. (SB 11) Effective July 23, 2021.)
  114. 10095.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    This section requires the association to submit and maintain a commissioner-approved plan of operation, and it sets out insurer participation, commissioner oversight, clearinghouse programs, and policyholder notice duties.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10095. (a) Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioner’s review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state. (b) The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program. (c) Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance. (d) The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurer’s premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner. (e) The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels. (f) The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter. (g) The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. (h) An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance. (i) To reduce the association’s concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners’ insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policy’s listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. (j) To reduce the association’s concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policy’s listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. (k) (1) With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations). (2) The association shall provide all policyholders with notice of each of the following: (A) The manner in which the association shall share policyholders’ personal information to facilitate offers of private insurance through the clearinghouse programs. (B) A method to opt out of the sharing of policyholders’ personal information in connection with the clearinghouse programs. (Amended by Stats. 2023, Ch. 180, Sec. 1. (SB 505) Effective January 1, 2024.)
  115. 10095.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The association must run a website and statewide toll-free number for insurance-plan help, list the number in directories, and put the contact details on communications. Insurance agents or brokers transacting basic property insurance must help people seeking coverage in one of the listed ways.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10095.5. (a) The association shall establish and maintain an Internet Web site and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and Internet Web site address on all communications with an applicant or insured. (b) An insurance agent or broker transacting basic property insurance shall assist a person seeking his or her help in obtaining basic property insurance coverage by any one of the following methods: (1) Making an application for insurance through the plan by submitting an application at the person’s request. (2) Providing the person with the California FAIR Plan’s Internet Web site address and the toll-free telephone number. (3) Making an application for insurance, at the person’s request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage. (Amended by Stats. 2016, Ch. 543, Sec. 3. (SB 1302) Effective September 23, 2016.)
  116. 10095.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The commissioner must establish the California Home Insurance Finder, and the department must keep it updated and promote it. Insurers must give denied applicants or affected policyholders information about the finder starting July 1, 2020.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10095.7. (a) The commissioner shall establish the California Home Insurance Finder on the department’s Internet Web site. The purpose of the finder is to connect homeowners in need of insurance assistance to an insurance agent or broker to assist in finding residential property insurance. (1) The department shall annually survey licensed insurance agents, licensed insurance brokers, and admitted insurers in California regarding inclusion on the finder. (2) On or before July 1, 2020, and at least annually thereafter, the department shall update the finder with the names, addresses, phone numbers, and Internet Web site links, if the licensee has an Internet Web site address, of the licensed insurance agents and brokers and admitted insurers for inclusion in the finder. The information shall be aggregated by ZIP Code within which the insurance agent, broker, or insurer maintains an office or sells policies, as well as by the languages in which the insurance agent, broker, or insurer may transact insurance. (3) The department shall use social media and other appropriate tools to make consumers aware of the California Home Insurance Finder. The department shall develop materials in the most common languages used in the state to facilitate access to the finder for non-English-speaking consumers. (b) On and after July 1, 2020, an insurer shall provide to an applicant who is denied coverage, or to a policyholder whose policy is canceled or not renewed, information regarding the department’s California Home Insurance Finder. This disclosure may be provided jointly with the disclosure required by subdivision (h) of Section 10095. (Added by Stats. 2018, Ch. 629, Sec. 1. (AB 1875) Effective January 1, 2019.)
  117. 10095.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The association must create an automatic payment system and accept automatic premium payments by April 1, 2026. A policyholder who misses an installment premium payment gets a period to pay it under Section 677.4, and a policy cannot be canceled or nonrenewed solely because the policyholder is not enrolled in automatic payments.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10095.8. (a) On or before April 1, 2026, the association shall create an automatic payment system and accept automatic payments for premiums from policyholders. (b) A policy shall not be canceled or nonrenewed solely because the policyholder is not enrolled in automatic payments. (c) If a policyholder fails to timely pay any outstanding installment premium, the policyholder shall have a period to pay the outstanding installment premium, in accordance with Section 677.4. (Added by Stats. 2025, Ch. 475, Sec. 1. (AB 290) Effective January 1, 2026.)
  118. 10096.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    Applicants or affected insurers may appeal certain acts or decisions to the governing committee, and committee decisions may be appealed to the commissioner within 30 days.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10096. (1) Any applicant or affected insurer shall have the right of appeal from any act or decision of either the facility or the association to the governing committee. A decision of the committee may be appealed to the commissioner within 30 days after such decision. Upon such appeal the commissioner may make any order to implement the purposes of the chapter and the plan. (2) All orders or decisions of the commissioner made pursuant to this chapter shall be subject to judicial review. (Added by Stats. 1968, Ch. 574.)
  119. 10097.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    This section grants immunity from liability and lawsuits for specified insurance-related entities and officials for required inspections, related acts or omissions, and related reports, communications, findings, and hearings. It also says certain reports and records are not public documents.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10097. There shall be no liability on the part of, and no cause of action of any nature shall arise against the insurers, the inspection bureau, the facility, the association, the governing committee, their agents or employees, or the commissioner or his authorized representatives, with respect to any inspections required to be undertaken by this chapter or for any acts or omissions in connection therewith, or for any statements made in any reports and communications concerning the insurability of the property, or in the findings required by the provisions of this chapter, or at the hearings conducted in connection therewith. The reports and communications of the inspection bureau, the facility, the association, and the records of the governing committee shall not be considered public documents. (Added by Stats. 1968, Ch. 574.)
  120. 10098.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    Insurers must accept risks assigned under this chapter and do any act the chapter requires if they want to keep their certificate of authority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10098. Acceptance of risks assigned under this chapter and performance of any act required by this chapter is a condition of the right to continue to hold a certificate of authority to transact insurance business in this state. All insurers, on and after the effective date of this chapter, by continuing to hold a certificate of authority to transact insurance business shall be deemed to have consented to the responsibilities imposed by this chapter. (Added by Stats. 1968, Ch. 574.)
  121. 10099.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The commissioner may do whatever is necessary to help California and participating insurers join certain federal reinsurance programs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10099. In addition to any powers conferred upon him by this or any other law, the commissioner is authorized to do all things necessary to enable the State of California and any insurer participating in any program approved by the commissioner to fully participate in any federal program of reinsurance which may be hereafter enacted for purposes similar to the purposes of this chapter. (Added by Stats. 1968, Ch. 574.)
  122. 101.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    Life insurance includes insurance on persons’ lives and transactions involving annuities.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 101. Life insurance includes insurance upon the lives of persons or appertaining thereto, and the granting, purchasing, or disposing of annuities. (Enacted by Stats. 1935, Ch. 145.)
  123. 1010.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. )

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    This section generally applies to persons involved in insurance business or subject to the commissioner’s examination, except the State Compensation Insurance Fund. If certain conditions exist for that fund, the commissioner must report to state leaders, and the Governor must direct or recommend a corrective course of action.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1010. (a) The provisions of this article shall apply to all persons, except the State Compensation Insurance Fund, subject to examination by the commissioner, or purporting to do insurance business in this state, or in the process of organization with intent to do such business therein, or from whom the commissioner’s certificate of authority is required for the transaction of business, or whose certificate of authority is revoked or suspended. (b) Notwithstanding subdivision (a), if any of the conditions set forth in Section 1011 exists with respect to the State Compensation Insurance Fund, and the commissioner would otherwise file a verified application with the superior court or proceed under Section 1013 against the fund, the commissioner shall instead issue a report to the Governor, the President pro Tempore of the Senate, and the Speaker of the Assembly setting forth the conditions that exist and recommending a course to remedy those conditions. The Governor, in consultation with the Legislature, shall direct a course of action to be implemented by the fund’s board of directors, or if additional legislative action is necessary, recommend a course of action to the Legislature, or both. (Amended by Stats. 2006, Ch. 740, Sec. 3.9. Effective January 1, 2007.)
  124. 10100.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The commissioner may require insurers to submit reports about risks insured under approved programs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10100. The commissioner may require such reports from insurers concerning risks insured under any program approved pursuant to this chapter as he shall deem necessary to effect the purposes of this chapter. (Added by Stats. 1968, Ch. 574.)
  125. 10100.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    A facility may distribute risks equitably, but only with Insurance Commissioner approval, and it may do so by assigning risks to individual members or through a pool or association of participating insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10100.1. The facility, subject to the approval of the Insurance Commissioner, may provide for the equitable distribution of risks provided for in this chapter by means of assignment to individual members of such facility or by a pool or association of insurers participating in such facility. (Added by Stats. 1968, Ch. 574.)
  126. 10100.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    The FAIR Plan and the association must set certain insurance rates using specified standards, and the association must keep rate-setting information public.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10100.2. (a) (1) Rates for the FAIR Plan shall not be excessive, inadequate, or unfairly discriminatory, and shall be actuarially sound so that premiums are adequate to cover expected losses, expenses and taxes, and shall reflect investment income of the plan. If the plan returns premiums to members annually, the rates shall not include any component relating to surplus enhancements. (2) If the FAIR Plan policy of a property owner would be subject to a brush surcharge solely because of an adjacent property owner’s failure to comply with applicable laws, ordinances, and regulations regarding brush clearance requirements, the surcharge shall instead be imposed on the policy of the adjacent property owner if the adjacent property is also insured through the FAIR Plan. (b) Rates for a policy of earthquake property insurance issued by the association shall be established based on the best available scientific information for assessing the risk of earthquake loss. Factors that the association shall consider in adopting rates include, but are not limited to, the following: (1) Location of the insured property and its proximity to earthquake faults and to other geological factors affecting the risk of earthquake. (2) The soil type upon which the insured dwelling is built. (3) Construction type of the insured dwelling. (4) The presence of earthquake hazard reduction factors as defined in Section 10089.2. (c) Notwithstanding Section 10097, all information considered by the association in establishing rates shall be public records. (d) The classification system established by the association for policies of earthquake property insurance shall not be adjusted or tempered in any manner to provide rates lower than are justified for classifications presenting a high risk of loss, or higher than are justified for classifications presenting a low risk of loss. (Amended by Stats. 2000, Ch. 323, Sec. 2. Effective January 1, 2001.)
  127. 10100.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. )

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    This section lets the association take certain financing and collateral actions only with prior commissioner approval, and requires member assessments if needed to pay its obligations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. Basic Property Insurance Inspection and Placement Plan [10090 - 10100.3] ( Chapter 9 added by Stats. 1968, Ch. 574. ) ## 10100.3. (a) If granted prior approval from the commissioner, the association may do all of the following: (1) Request the California Infrastructure and Economic Development Bank to issue bonds from time to time to finance all or any portion of the costs of claims or to increase liquidity and claims-paying capacity, pursuant to Section 63049.75 of the Government Code. (2) Enter into loan agreements with the California Infrastructure and Economic Development Bank, pursuant to Section 63049.75 of the Government Code. (3) Enter into line of credit agreements with one or more entities for the purpose of financing the costs of claims or to increase liquidity and claims-paying capacity and to refund lines of credit previously incurred for that purpose. (4) Secure those loan agreements, line of credit agreements, or agreements described in paragraph (5) by a pledge of, and the grant of a lien and security interest in, collateral, which may include premiums, revenues, receivables, assessments, and any other assets of the association. That pledge, lien, and security interest is subject to Division 9 (commencing with Section 9101) of the Commercial Code. (5) Enter into any other agreement or take any other action necessary or convenient to the execution and delivery of bonds, loan agreements, or line of credit agreements. (b) (1) If the bonds, loan agreements, or lines of credit described in subdivision (a) have received the prior approval of the commissioner as provided in subdivision (a), and if the association is otherwise unable to timely and fully meet its repayment obligation, the association shall assess members in the amounts and at the times necessary to timely pay in full all obligations of the association with respect to those bonds, loan agreements, lines of credit, and all obligations of the association under agreements entered into pursuant to paragraph (5) of subdivision (a). (2) The FAIR Plan shall not act pursuant to this subdivision without the prior review and approval of the commissioner. (c) (1) Once approved by the commissioner, specific repayment terms shall not be altered by subsequent amendment to the plan of operation, and amendments to the plan of operation shall not impair the timely payment in full of any obligations of the association with respect to those bonds, loan agreements, lines of credit, and all obligations of the association under agreements entered into pursuant to paragraph (5) of subdivision (a). (2) The state shall not alter, amend, or restrict the provisions of this section in a manner adverse to the rights and interests of bondholders, credit providers, or other parties who have entered into bonds, line of credit agreements, or other agreements pursuant to paragraph (5) of subdivision (a), for so long as the bonds, lines of credit, or other agreements pursuant to paragraph (5) of subdivision (a) remain outstanding. This subdivision does not preclude altering, amending, or restricting this section if it expressly applies only to agreements issued or entered into on or after the effective date of that alteration, amendment, or restriction. (3) The association may include the terms of paragraph (2) in an agreement relating to bonds, lines of credit, or other agreements entered into pursuant to paragraph (5) of subdivision (a). (d) (1) The bonds, loan agreements, lines of credit, and agreements described in paragraph (5) of subdivision (a) may be secured by a statutory lien on all collateral in favor of the bond trustee, line of credit providers, and lenders, as applicable, to secure the payment and performance of all obligations of the association. This shall be a continuous lien on collateral effective from the time the first bond is issued, or the first line of credit agreement is executed and delivered, whether or not a particular item of collateral exists at the time of the issuance or execution and delivery. (2) The statutory lien shall be valid, effective, prior, perfected, binding, and enforceable without the need for notification, physical delivery, recordation, filing, or further action. (3) For purposes of this subdivision, the beneficiary of the statutory lien becomes entitled to enforce the lien in accordance with the statute under which it was created if a payment default occurs in connection with a lien. (e) As long as a bond, loan agreement, or line of credit is outstanding, the association shall not be subject to Article 14 (commencing with Section 1010) or Article 14.3 (commencing with Section 1064.1) of Chapter 1 of Part 2 of Division 1. (Added by Stats. 2025, Ch. 473, Sec. 3. (AB 226) Effective October 9, 2025.)
  128. 10101.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    An insurer may not issue or renew certain residential property insurance policies in California unless the named insured gets required disclosure documents.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10101. (a) A policy of residential property insurance shall not be issued or renewed in this state by an insurer unless the named insured is provided a copy of the California Residential Property Insurance Disclosure pursuant to Section 10102 and a copy of the California Residential Property Insurance Bill of Rights described in Section 10103.5. (b) On or after July 1, 2020, a tenant’s policy, a renter’s policy, or a policy insuring individually owned condominium units, when those policies do not provide dwelling structure coverage, shall not be issued or renewed in this state by an insurer unless the named insured is provided a copy of the California Residential Property Insurance Bill of Rights described in Section 10103.5. (Amended by Stats. 2019, Ch. 151, Sec. 1. (SB 508) Effective January 1, 2020.)
  129. 10102.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    California residential property insurance disclosures must be given in specific ways and timing, and certain disclosure and coverage rules apply to insurers and agents.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10102. (a) The disclosure required by Section 10101 shall be in no less than 10-point type and shall be provided prior to or concurrent with, the application for a policy of residential property insurance. In the event that an application is made by telephone, an insurer that mails a copy of the disclosure within three business days shall be in compliance with this section. For policies issued on or after July 1, 1993, the agent or insurer shall obtain the applicant’s signature acknowledging receipt of the disclosure form within 60 days of the date of the application. When the insurer or agent establishes delivery of the disclosure form by obtaining the signature of the applicant or insured, or when an insurer or agent provides the applicant with the disclosure form and the applicant does not return a signed acknowledgment of receipt within 60 days of the date it was provided, there shall be a conclusive presumption that the insurer or agent has complied with the disclosure requirement of this chapter. The insurer or agent shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was provided to the applicant or insured. A signature shall not be required at the time of renewal. If the disclosure is mailed to the named insured or applicant, it shall be mailed to the mailing address shown on the policy of residential property insurance or to the address requested by the applicant. First-class mail shall be deemed adequate for proof of mailing. The insurer shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was mailed to the applicant or insured. The disclosure shall contain the following language: “NOTICE TO CONSUMERS — CALIFORNIA RESIDENTIAL INSURANCE DISCLOSURE This disclosure is required by Section 10102 of the California Insurance Code. This form provides general information related to residential property insurance and is not part of your residential property insurance policy. Only the specific provisions of your policy will determine whether a particular loss is covered and the amount payable. The information provided does not preempt existing California law. PRIMARY FORMS OF RESIDENTIAL DWELLING COVERAGE You have purchased the coverage(s) checked below. NOTE: Actual Cash Value Coverage is the most limited level of coverage listed. Guaranteed Replacement Cost is the broadest level of coverage. ______ ACTUAL CASH VALUE COVERAGE for either a total or partial loss to the structure or its contents pays the amount it would cost you to repair, rebuild, or replace the thing lost or injured, less a fair and reasonable deduction for physical depreciation based upon its condition at the time of the injury or the policy limit, whichever is less. A deduction for physical depreciation applies only to components of a structure that are normally subject to repair and replacement during the useful life of that structure. ______ REPLACEMENT COST COVERAGE is intended to provide for the cost to repair or replace the damaged or destroyed dwelling, without a deduction for physical depreciation. Many policies pay only the dwelling’s actual cash value until the insured has actually begun or completed repairs or reconstruction on the dwelling. Coverage only pays for replacement costs up to the limits specified in your policy. ______ EXTENDED REPLACEMENT COST COVERAGE is intended to provide for the cost to repair or replace the damaged or destroyed dwelling without a deduction for physical depreciation. Many policies pay only the dwelling’s actual cash value until the insured has actually begun or completed repairs or reconstruction on the dwelling. Extended Replacement Cost provides additional coverage above the dwelling limits up to a stated percentage or specific dollar amount. See your policy for the additional coverage that applies. ______ GUARANTEED REPLACEMENT COST COVERAGE covers the full cost to repair or replace the damaged or destroyed dwelling for a covered peril regardless of the dwelling limits shown on the policy declarations page. ______ BUILDING CODE UPGRADE COVERAGE, also called Ordinance and Law coverage, covers additional costs to repair or replace a dwelling to comply with the building codes and zoning laws in effect at the time of loss or rebuilding. These costs may otherwise be excluded by your policy. Meeting current building code requirements can add significant costs to rebuilding your home. Refer to your policy or endorsement for the specific coverage provided and coverage limits that apply. READ YOUR POLICY AND POLICY DECLARATIONS PAGE CAREFULLY: The policy declarations page shows the specific coverage limits you have purchased for your dwelling, personal property, separate structures such as detached garages, and additional living expenses. The actual policy and endorsements provide details on extensions of coverage, limitations of coverage, and coverage conditions and exclusions. The amount of any claim payment made to you will be reduced by any applicable deductibles shown on your policy declarations page. It is important to take the time to consider whether the limits and limitations of your policy meet your needs. Contact your agent, broker, or insurance company if you have questions about what is covered or if you want to discuss your coverage options. INFORMATION YOU SHOULD KNOW ABOUT RESIDENTIAL DWELLING INSURANCE AVOID BEING UNDERINSURED: Insuring your home for less than its replacement cost may result in your having to pay thousands of dollars out of your own pocket to rebuild your home if it is completely destroyed. Contact your agent, broker, or insurance company immediately if you believe your policy limits may be inadequate. THE RESIDENTIAL DWELLING COVERAGE LIMIT: The coverage limit on the dwelling structure should be high enough so you can rebuild your home if it is completely destroyed. Please note: ◼ The cost to rebuild your home is almost always different from the market value. ◼ Dwelling coverage limits do not cover the value of your land. ◼ The estimate to rebuild your home should be based on construction costs in your area and should be adjusted to account for the features of your home. These features include, but are not limited to, the square footage, type of foundation, number of stories, and the quality of the materials used for items such as flooring, countertops, windows, cabinetry, lighting, and plumbing. ◼ The cost to rebuild your home should be adjusted each year to account for inflation. ◼ Coverage limits for contents, separate structures, additional living expenses, and debris removal are usually based on a percentage of the limit for the dwelling. If your dwelling limit is too low, these coverage limits may also be too low. You are encouraged to obtain a current estimate of the cost to rebuild your home from your insurance agent, broker, or insurance company or an independent appraisal from a local contractor, architect, or real estate appraiser. If you do obtain an estimate of replacement value and wish to change your policy limits, contact your insurance company. While not a guarantee, a current estimate can help protect you against being underinsured. DEMAND SURGE: After a widespread disaster, the cost of construction can increase dramatically as a result of the unusually high demand for contractors, building supplies, and construction labor. This effect is known as demand surge. Demand surge can increase the cost of rebuilding your home. Consider increasing your coverage limits or purchasing Extended Replacement Cost coverage to prepare for this possibility. CHANGES TO PROPERTY: Changes to your property may increase its replacement cost. These changes may include the building of additions, customizing your kitchen or bathrooms, or otherwise remodeling your home. Failure to advise your insurance company of any significant changes to your property may result in your home being underinsured. EXCLUSIONS: Not all causes of damage are covered by common homeowners or residential fire policies. You need to read your policy to see what causes of loss or perils are not covered. Coverage for landslide is typically excluded. Some excluded perils such as earthquake or flood can be purchased as an endorsement to your policy or as a separate policy. Contact your agent, broker, or insurance company if you have a concern about any of the exclusions in your policy. CONTENTS (PERSONAL PROPERTY) COVERAGE DISCLOSURE: This disclosure form does not explain the types of contents coverage provided by your policy for items such as your furniture or clothing. Contents may be covered on either an actual cash value or replacement cost basis depending on the contract. Almost all policies include specific dollar limitations on certain property that is particularly valuable, such as jewelry, art, or silverware. Contact your agent, broker, or insurance company if you have any questions about your contents coverage. You should create a list of all personal property in and around your home. Pictures and video recordings also help you document your property. The list, photos, and video should be stored away from your home. CONSUMER ASSISTANCE: If you have any concerns or questions, contact your agent, broker, or insurance company. You are also encouraged to contact the California Department of Insurance consumer information line at (800) 927-HELP (4357) or at www.insurance.ca.gov for free insurance assistance.” (b) The agent or insurer shall indicate on the disclosure form which coverages the applicant or insured has selected or purchased. (c) The disclosure statement may contain additional provisions not conflicting with, annulling, or detracting from the foregoing. (d) Following the issuance of the policy of residential property insurance, the insurer shall provide the disclosure statement to the insured on an every-other-year basis at the time of renewal. The disclosure required by this section may be transmitted with the material required by Section 10086.1. (e) A policy of residential property insurance shall not be initially issued as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurer’s dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage. (f) A policy of residential property insurance shall not be renewed as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurer’s dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage. (g) Coverage provided for building code upgrades by a policy of residential property insurance shall be applicable to building codes, ordinances, standards, or laws only to the extent that those codes, ordinances, standards, or laws do not impose stricter standards on the property on the basis of the level of insurance coverage applicable to the property. (h) The disclosure required by Section 10101 shall also be provided to the mortgagor in the event that a policy is forced placed by an insurer at the request of a mortgagee. In those cases, neither the insurer nor the mortgagee shall be required to obtain a signature from the mortgagor. A disclosure shall not be required to be provided with respect to blanket policies issued to a mortgagee, and designed to provide interim coverage for losses occurring before the mortgagee has knowledge of the lapse of the policy and before placement of a policy on behalf of the mortgagor. (i) A disclosure required by Section 10101 that is provided on and after January 1, 2020, shall include any fire safety-related discounts offered by the insurer. (Amended by Stats. 2020, Ch. 263, Sec. 2. (AB 2756) Effective January 1, 2021.)
  130. 10103.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    Residential property insurance policies issued or renewed in this state must include specified disclosures on the declarations page, and some policies must include at least 10% building code upgrade coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10103. (a) A policy of residential property insurance shall not be issued or renewed in this state unless it provides the following information on the declarations page of the policy: (1) The limits of liability for the structure. (2) The following statement regarding the valuation of the structure: “The limit of liability for this structure (Coverage A) is based on an estimate of the cost to rebuild your home, including an approximate cost for labor and materials in your area, and specific information that you have provided about your home.” (3) Limits of liability for personal property. (4) Deductibles. (5) For a residential property insurance policy that provides replacement cost coverage, a statement that the policy provides building code upgrade coverage for the increased costs of repairing or replacing damage to the insured dwelling caused by a covered loss because of building ordinances or laws regulating the repair or replacement. Building code upgrade coverage is provided based on the increased costs associated with building ordinances or laws in effect at the time of loss or rebuilding, up to policy limits for this coverage. The policy may denote restrictions, if any, on coverage for compliance with applicable building codes that take effect after the date of loss, but before the issuance of required building permits. (b) If the policy includes building code upgrade coverage, it shall do both of the following: (1) State it includes building code upgrade coverage on the declaration page in no less than 10-point type, state any applicable limits on the amount of coverage, and, if the policy contains other terms, conditions, or restrictions for coverage, disclose on the declarations page that those terms, conditions, or restrictions are identified on a separate disclosure form attached to the declarations page. (2) If the building code upgrade coverage is subject to any terms, limits, conditions, or restrictions, state the terms, limits, conditions, or restrictions on a separate disclosure form attached to the declarations page. The separate disclosure form shall be printed in no less than 10-point type. (c) An open policy of residential property insurance that provides replacement cost coverage shall not be issued or renewed unless it provides additional building code upgrade coverage of no less than 10 percent of the dwelling coverage policy limits. The building code upgrade coverage required by this subdivision shall be additional coverage, and use of this coverage shall not reduce or deplete the dwelling coverage policy limits for the insured property. This subdivision does not prohibit an insurer from offering building code upgrade coverage of greater than 10 percent of the dwelling coverage policy limits, in addition to providing the minimum coverage of 10 percent of the dwelling coverage policy limits. (d) The provisions of paragraphs (1), (2), and (5) of subdivision (a), subdivision (b), and subdivision (c) are not required for policies purchased by tenants or unit owners that do not cover the structure of the premises. (e) (1) The requirements of paragraph (5) of subdivision (a), subdivision (b), and subdivision (c) do not apply to a policy of residential property insurance that provides actual cash value coverage and does not provide replacement cost coverage or building code upgrade coverage. (2) The requirements of subdivision (c) do not apply to a policy of residential property insurance that is an apartment policy, a tenant’s policy, a renter’s policy, a mobilehome policy, or a policy insuring individually owned condominium units, if the policy of residential property insurance does not provide dwelling structure coverage. The requirements of subdivision (c) also do not apply to a policy covering all or part of a commercial or farm operation, including a policy covering a structure or dwelling unit on commercial or farm property, regardless of whether the structure or dwelling unit is owner occupied or rented for individual residential purposes. (3) A policy of residential property insurance that does not provide building code upgrade coverage shall include on the declarations page of the policy in no less than 10-point type the following statement: “THIS POLICY DOES NOT INCLUDE BUILDING CODE UPGRADE COVERAGE.” (f) The amendments to this section made by the act adding this subdivision shall be operative for any policy issued or renewed on or after July 1, 2021, except that an insurer that files a complete rate application, including, without limitation, a form change application or rule filing, by no later than April 1, 2021, in order to comply with the provisions of this act, shall begin issuing and renewing policies in compliance with this section within 75 days following the commissioner’s prior approval of that complete rate application, including, without limitation, a form change application or rule filing. (Amended by Stats. 2020, Ch. 263, Sec. 3. (AB 2756) Effective January 1, 2021.)
  131. 10103.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    When residential property insurance is offered, a disclosure may have to be given to the applicant, unless the offer already includes at least 50% above the dwelling coverage limit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10103.2. (a) On and after July 1, 2020, upon an offer of a policy of residential property insurance, a disclosure shall be provided to the applicant that states policies offering extended replacement cost coverage of at least 50 percent may be available for that property and that includes the internet website address of the department’s Homeowners Coverage Comparison Tool, pursuant to the following conditions: (1) If an insurer does not offer at least 50 percent above the residential dwelling coverage limit to the applicant, the insurer shall provide the disclosure. (2) If an insurer, utilizing an agent or broker, does not offer an applicant at least 50 percent above the residential dwelling coverage limit to the applicant, the insurer, agent, or broker shall provide the disclosure. (3) If an agent or broker provides quotes to a consumer from multiple insurers, but none of the offers include coverage at least 50 percent above the residential dwelling coverage limit, the agent or broker shall provide the disclosure. (b) (1) If an insurer offers at least 50 percent above the residential dwelling coverage limit to the applicant, the insurer is not required to make a disclosure pursuant to subdivision (a). (2) If an agent or broker provides quotes to a consumer from multiple insurers, and at least one of the insurers offers 50 percent above the residential dwelling coverage limit, the insurer, agent, or broker is not required to make a disclosure pursuant to subdivision (a). (c) An insurer that offers policies of residential property insurance shall notify the department on or before February 1 of each year of the amount of extended replacement cost coverage offered by the insurer for each policy or product it sells in California if the amount is different than what was reported in the previous year. The department shall use this information to annually update the Homeowners Coverage Comparison Tool on the department’s internet website. (Amended by Stats. 2019, Ch. 201, Sec. 11. (AB 1813) Effective January 1, 2020.)
  132. 10103.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    Some insurers must give policyholders an every-other-year replacement cost estimate when renewing residential property insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10103.4. (a) An insurer that provides replacement cost coverage in accordance with Section 10102, except an insurer that satisfies the requirements of subdivision (b), shall, on an every other year basis, at the time an offer to renew a policy of residential property insurance is made to the policyholder, provide an estimate of the cost necessary to rebuild or replace the insured structure that complies with Sections 2695.180 to 2695.183, inclusive, of Article 1.3 of Subchapter 7.5 of Chapter 5 of Title 10 of the California Code of Regulations, as those sections provided on January 1, 2018. (b) An insurer that satisfies either of the following is not subject to subdivision (a): (1) The policyholder has requested, within the two years prior to the offer to renew the policy, and the insurer has provided, coverage limits greater than the previous limits that the policyholder had selected. (2) The insurer has, in connection with its annual offer to renew the policy, done both of the following: (A) Offers, on an every other year basis, the policyholder the right to have a new estimate of the replacement cost for the insured dwelling, that is compliant with Sections 2695.180 to 2695.183, inclusive, of Article 1.3 of Subchapter 7.5 of Chapter 5 of Title 10 of the California Code of Regulations, as those sections provided on January 1, 2018, provided the policyholder provides the necessary, requested information. (B) Offered the renewal of the policy and the dwelling coverage limit in the renewal offer is based on an inflation factor that reflects the cost of construction in the policyholder’s geographic area. This paragraph applies whether or not the policyholder has elected to accept that coverage limit. (c) This section shall not be deemed to limit or preclude an insurer and insured from agreeing to provide coverage for a policy limit that is greater or lesser than the estimate of replacement value provided in accordance with subdivision (a). (d) This section is not intended to change existing law with respect to the duty of the policyholder or applicant to select the coverage limits for a policy of residential property insurance. (e) This section shall become operative on July 1, 2019. (Added by Stats. 2018, Ch. 205, Sec. 1. (AB 1797) Effective January 1, 2019. Section operative July 1, 2019, by its own provisions.)
  133. 10103.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    Residential property insurance disclosures must include a Bill of Rights, and insurers must format and distribute it as required.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10103.5. (a) Every California Residential Property Insurance Disclosure shall be accompanied by a California Residential Property Insurance Bill of Rights. If the insurer provides the insured with an electronic copy of a policy, the bill of rights may also be transmitted electronically. (b) The California Residential Property Insurance Bill of Rights shall be plainly prepared in no less than 10-point type. The Bill of Rights shall contain the following: “California Residential Property Insurance Bill of Rights A consumer is entitled to receive information regarding residential property insurance. The following is a limited overview of information that your insurance company can provide: •The insurance company’s customer service telephone number for underwriting, rating, and claims inquiries. •A written explanation for any cancellation or nonrenewal of your policy. •A copy of the insurance policy. •An explanation of how your policy limits were established. •In the event of a claim, an itemized, written scope of loss report prepared by the insurer or its adjuster within a reasonable time period. •In the event of a claim, a copy of the Unfair Practices Act and, if requested, a copy of the Fair Claims Settlement Practices Regulations. •In the event of a claim, notification of a consumer’s rights with respect to the appraisal process for resolving claims disputes. •An offer of coverage and premium quote for earthquake coverage, if eligible. A consumer is also entitled to select a licensed contractor or vendor to repair, replace, or rebuild damaged property covered by the insurance policy. The information provided herein is not all inclusive and does not negate or preempt existing California law. If you have any concerns or questions, contact your agent, broker, insurance company, or the California Department of Insurance consumer information line at (800) 927-HELP (4357) or at www.insurance.ca.gov for free insurance assistance.” (c) (1) The bill of rights shall be distributed by all insurers licensed to sell residential property insurance in this state. (2) If the insurer under a personal lines residential property insurance policy reports claims history or loss experience of insureds under those policies to an insurance-support organization, the insurer shall include the following disclosure in the California Residential Property Insurance Bill of Rights: “This insurer reports claim information to one or more claims information databases. The claim information is used to furnish loss history reports to insurers. If you are interested in obtaining a report from a claims information database, you may do so by contacting: (Insert the name, toll-free telephone number, and, if applicable, internet website address of each claims information database to which the insurer reports the information covered by this section)” (d) This section shall become operative on July 1, 2020. (Repealed (in Sec. 2) and added by Stats. 2019, Ch. 151, Sec. 3. (SB 508) Effective January 1, 2020. Section operative July 1, 2020, by its own provisions.)
  134. 10103.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    An insurer issuing or renewing a residential property policy without fire coverage must disclose that fact on the declarations page and must obtain a signed acknowledgment from the applicant or insured, with a 60-day fallback if it is not signed at issuance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10103.6. (a) If an insurer issues a new residential property insurance policy on or after July 1, 2021, that does not provide coverage for the peril of fire, the insurer shall, on or before the date of issuance of the policy, obtain a signed acknowledgment from the applicant or insured stating that the newly issued policy does not provide coverage for the peril of fire. If the applicant or insured does not sign the required acknowledgment on or before the issuance of the policy, the insurer shall obtain the signed acknowledgment from the applicant or insured within 60 days of the date of issuance of the policy. For purposes of this subdivision, a new or newly issued policy does not include renewal of an existing policy, including a renewal that contains different terms than the preceding policy periods. (b) If an insurer issues or renews a residential property insurance policy on or after July 1, 2021, that does not provide coverage for the peril of fire, the insurer shall prominently disclose both of the following on the declarations page of the policy: (1) The following statement in bold, uppercase letters in no less than 12-point type: THIS POLICY DOES NOT COVER THE PERIL OF FIRE. THERE ARE OTHER RESOURCES FOR FINDING FIRE COVERAGE, INCLUDING USING THE CALIFORNIA DEPARTMENT OF INSURANCE’S HOME INSURANCE FINDER OR PURCHASING COVERAGE FROM THE CALIFORNIA FAIR PLAN ASSOCIATION. (2) Information on the California FAIR Plan, as required by subdivision (h) of Section 10095, and the information on the California Home Insurance Finder, as required by subdivision (b) of Section 10095.7. (Added by Stats. 2020, Ch. 263, Sec. 4. (AB 2756) Effective January 1, 2021.)
  135. 10103.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    This section requires insurers to offer certain advance contents payments after a covered emergency loss, allows insureds to combine or later claim additional amounts, and applies special rules for attestation forms and policy forms.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10103.7. (a) In the event of a covered loss relating to a state of emergency, as defined in Section 8558 of the Government Code, an insured under a residential property insurance policy shall be permitted to combine payments for claims for losses up to the policy limits for the primary dwelling and other structures, for any of the covered expenses reasonably necessary to rebuild or replace the damaged or destroyed dwelling, if the policy limits for coverage to rebuild or replace the primary dwelling are insufficient. Any claims payments for losses pursuant to this subdivision for which replacement cost coverage is applicable shall be for the full replacement value of the loss without requiring actual replacement of the other structures. Claims payments for other structures in excess of the amount applied towards the necessary cost to rebuild or replace the damaged or destroyed dwelling shall be paid according to the terms of the policy. (b) (1) In the event of a covered total loss of a primary dwelling under a residential property insurance policy resulting from a state of emergency, as defined in Section 8558 of the Government Code, if the residence was furnished at the time of the loss, the insurer shall offer a payment under the contents (personal property) coverage in an amount no less than 60 percent of the policy limit applicable to the personal property covered under the policy, up to a maximum of three hundred fifty thousand dollars ($350,000), without requiring the insured to file an itemized claim. (2) After receiving the payment described in paragraph (1), the insured may recover additional amounts up to the policy limit for contents coverage by filing a claim pursuant to the terms of the policy for the loss of contents that exceeds the value of the payment provided pursuant to paragraph (1). (3) When an insured files a claim relating to a state of emergency, as defined in Section 8558 of the Government Code, the insurer shall notify the insured of the option to receive payment for loss of contents pursuant to paragraph (1) and of the insured’s option to subsequently file a full itemized claim pursuant to paragraph (2). (4) This subdivision does not affect payment under the policy for scheduled personal property. (5) As a condition of receiving the advance payment made pursuant this subdivision, an insurer may require the insured sign an attestation form. The attesting form may request that the insured acknowledge the residence was furnished and that the insured reasonably believes the personal property damaged or destroyed had a value that equates or exceeded the amount of the advance payment. The attestation form shall not contain any misleading or inaccurate information. The commissioner may issue a bulletin or promulgate a regulation that describes the parameters of an attestation form. (6) This section does not prohibit an insurer from restricting payment in cases of suspected fraud. (c) On and after July 1, 2026, all policy forms issued or renewed by an insurer shall comply with this section in its entirety, including the changes made to this section by the act that added this paragraph. (Amended by Stats. 2025, Ch. 542, Sec. 3. (SB 495) Effective January 1, 2026.)
  136. 10104.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    This section defines certain terms for the chapter and requires an insurer to give the named insured specific disclosure documents in some condominium or mobilehome policies with dwelling structure coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10104. (a) As used in this chapter, “policy of residential property insurance” shall have the same meaning as defined in Section 10087, except that it shall not include a tenant’s policy, a policy covering individually owned mobilehomes and their contents, a renter’s policy, or a policy insuring individually owned condominium units, when those policies do not provide dwelling structure coverage. If a policy insuring an individually owned condominium or an individually owned mobilehome does provide dwelling structure coverage, an insurer is required to provide the named insured with a copy of the documents described in subdivision (a) of Section 10101. (b) As used in this chapter, “insurer” has the same meaning as defined in Section 10091. (Amended by Stats. 2019, Ch. 151, Sec. 4. (SB 508) Effective January 1, 2020.)
  137. 10105.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    This section says the chapter does not change coverage for residential property insurance policies issued and in effect before July 1, 1993, and the chapter applies to those policies at their first renewal after January 1, 1994.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10105. Nothing in this chapter is intended to expand, contract, modify, or otherwise affect the coverage provided under any policy of residential property insurance issued and in effect prior to July 1, 1993. The provisions of this chapter shall apply to those policies upon the first renewal of those policies following January 1, 1994. (Amended by Stats. 1993, Ch. 11, Sec. 4. Effective May 5, 1993.)
  138. 10106.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    The Insurance Commissioner may change certain disclosure statements only when an insurer asks, and only to improve or clarify wording about dwelling coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10106. The Insurance Commissioner may modify a disclosure statement as contained in Section 10102, 10103, or 10103.5 only upon request of an insurer. The modification shall only be for the purpose of adding new or clarifying existing language describing any form of dwelling coverage offered by an insurer. The commissioner’s authority to modify the disclosure statement shall be limited solely to determining the clarity and accuracy of the information provided in the disclosure to ensure that the disclosure accurately reflects a new or existing product. It is the intent of the Legislature that the disclosure form be kept as brief as clarity and accuracy permit. Any modification to the disclosure statement shall be approved in writing by the commissioner. (Amended by Stats. 2005, Ch. 448, Sec. 4. Effective January 1, 2006.)
  139. 10107.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. )

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    This chapter applies to policies newly issued on or after July 1, 1993, and to policies renewed after January 1, 1994, except for policies covered by subdivisions (e) and (i) of Section 10102.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. California Residential Property Insurance Disclosure [10101 - 10107] ( Chapter 10 added by Stats. 1992, Ch. 1089, Sec. 1. ) ## 10107. Except as provided in subdivisions (e) and (i) of Section 10102, this chapter shall apply to all policies newly issued on or after July 1, 1993, and to all policies renewed after January 1, 1994. (Amended by Stats. 1993, Ch. 11, Sec. 5. Effective May 5, 1993. Note: This section prescribes dates of applicability for Chapter 10, commencing with Section 10101.)
  140. 10108.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Small Business Guide to Commercial Insurance [10108 - 10108.1] ( Chapter 11 added by Stats. 1994, Ch. 316, Sec. 2. )

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    The commissioner must develop a pamphlet about commercial property insurance for small business owners and others.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Small Business Guide to Commercial Insurance [10108 - 10108.1] ( Chapter 11 added by Stats. 1994, Ch. 316, Sec. 2. ) ## 10108. (a) The commissioner shall develop a pamphlet which provides information to small business owners and others on the key features of, and suggested ways of, purchasing commercial property insurance. The commissioner may develop this pamphlet with the assistance of an advisory panel consisting of persons representing small business owners, insurers, consumer organizations, and other persons deemed necessary by the commissioner. (b) The pamphlet shall be completed by July 1, 1995, and to the extent feasible, copies shall be made available to persons operating small businesses, business groups, chambers of commerce, and other persons and groups. (c) The pamphlet shall provide information on the key features of commercial property insurance and recommend steps for purchasing this insurance. The pamphlet shall include, but not be limited to, providing information on the following: (1) Various types of commercial insurance. (2) Limits of liability in policies, including that for the following: (A) Structures. (B) Personal property. (C) Inventory. (D) Business interruption. (3) Deductibles. (Added by Stats. 1994, Ch. 316, Sec. 2. Effective January 1, 1995.)
  141. 10108.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Small Business Guide to Commercial Insurance [10108 - 10108.1] ( Chapter 11 added by Stats. 1994, Ch. 316, Sec. 2. )

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    This section defines two terms used in the chapter: “policy of commercial property insurance” and “insurer.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 1. FIRE AND MARINE INSURANCE [1880 - 10108.1] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 11. Small Business Guide to Commercial Insurance [10108 - 10108.1] ( Chapter 11 added by Stats. 1994, Ch. 316, Sec. 2. ) ## 10108.1. (a) As used in this chapter, “policy of commercial property insurance” has the same meaning as defined in Section 675.5. (b) As used in this chapter, “insurer” has the same meaning as defined in Section 10091. (Added by Stats. 1994, Ch. 316, Sec. 2. Effective January 1, 1995.)
  142. 1011.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. )

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    If the listed conditions are shown, the superior court must issue an order giving the commissioner control of the person’s assets and business and barring the person and related staff from dealing with the business or property until further court order.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1011. The superior court of the county in which the principal office of a person described in Section 1010 is located, upon the filing by the commissioner of the verified application showing any of the conditions in this subdivision exist, or a filing by the Federal Deposit Insurance Corporation of the verified application showing that the conditions enumerated in subdivision (j) exist and the conditions set forth in Section 5383(e)(3) of Title 12 of the United States Code having been satisfied, shall issue its order vesting title to all of the assets of that person, wheresoever situated, in the commissioner or his or her successor in office, in his or her official capacity, and direct the commissioner forthwith to take possession of all of its books, records, property, real and personal, and assets, and to conduct, as conservator, the business of the person, or so much thereof as to the commissioner may seem appropriate, and enjoining the person and its officers, directors, agents, servants, and employees from the transaction of its business or disposition of its property until any of the following further order of the court: (a) That the person has refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the commissioner or his or her deputy or examiner. (b) That the person has neglected or refused to observe an order of the commissioner to make good within the time prescribed by law any deficiency in its capital if it is a stock corporation, or in its reserve if it is a mutual insurer. (c) That the person, without first obtaining the consent in writing of the commissioner, has transferred, or attempted to transfer, substantially its entire property or business or, without consent, has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person. (d) That the person is found, after an examination, to be in a condition that makes its further transaction of business hazardous to its policyholders, or creditors, or to the public. (e) That the person has violated its charter or any law of the state. (f) That any officer of the person refuses to be examined under oath, touching its affairs. (g) That any officer or attorney in fact of the person has embezzled, sequestered, or wrongfully diverted any of the assets of the person. (h) That a domestic insurer does not comply with the requirements for the issuance to it of a certificate of authority, or that its certificate of authority has been revoked. (i) That the last report of examination of any person to whom the provisions of this article apply shows the person to be insolvent within the meaning of Article 13 (commencing with Section 980) of Chapter 1 of Part 2 of Division 1; or if a reciprocal or interinsurance exchange, within the applicable provisions of Section 1370.2, 1370.4, 1371, or 1372; or if a life insurer, within the applicable provisions of Sections 10510 and 10511. (j) Notification is given by the United States Secretary of the Treasury that a determination has been made by the secretary, in accordance with and satisfying the provisions of Section 5383(b) of Title 12 of the United States Code, as to a person described in Section 1010 that is an insurance company as defined in Section 5381(a)(13) of Title 12 of the United States Code, and one of the following: (1) The board of directors, or body performing similar functions, of the person acquiesces or consents to the appointment of a receiver as provided for in Section 5832(a)(1)(A)(i) of Title 12 of the United States Code, with that consent to be considered to be consent to issuance of an order under this section. (2) The United States District Court for the District of Columbia issued an order for the appointment of a receiver of the person as provided for in Section 5382(a)(1)(A)(iv)(I) of Title 12 of the United States Code, without regard to whether an appeal of the order is pending. (3) A petition by the United States Secretary of the Treasury for appointment of a receiver was made to the United States District Court for the District of Columbia and was granted by operation of the law as provided for in Section 5382(a)(1)(A)(v) of Title 12 of the United States Code, without regard to whether an appeal of the order is pending. (Amended by Stats. 2013, Ch. 321, Sec. 7. (AB 1391) Effective January 1, 2014.)
  143. 1011.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. )

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    If a verified application is filed and notice has been given, the superior court must hold a hearing and issue an order within 24 hours; the affected person may object only on a narrow ground.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1011.1. If a verified application is filed pursuant to Section 1011 that shows that the conditions set forth in subdivision (j) of Section 1011 exist and upon a showing that notice was provided to the person that is the subject of the verification application, all of the following apply: (a) A superior court hearing shall be held in which the person may oppose the verified application solely on the grounds that the conditions set forth in subdivision (j) of Section 1101 do not exist. The hearing shall be completed within 24 hours after the verified application is filed with the court. (b) The superior court shall issue an order as provided for in Section 1011 within 24 hours after the verified application was filed with the court. (c) If the superior court does not issue an order within 24 hours as provided for in subdivision (b), then an order described in Section 1011 shall be deemed granted by operation of law upon expiration of the 24-hour period, without further notice. (d) An order entered by the superior court pursuant to subdivision (b) or entered by operation of law pursuant to subdivision (c) shall not be subject to any stay or injunction pending appeal. (Amended by Stats. 2013, Ch. 321, Sec. 8. (AB 1391) Effective January 1, 2014.)
  144. 1011.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. )

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    An application must be filed with the commissioner, in the form the commissioner prescribes, with any additional insurer information the commissioner requires, and a $6,350 filing fee must be paid to the commissioner.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1011.5. The consent described in subdivision (c) of Section 1011 shall be obtained by filing an application with the commissioner in a form to be prescribed by him or her accompanied by that additional information concerning the insurer, its condition and affairs, as the commissioner requires. A fee of six thousand three hundred fifty dollars ($6,350) shall be paid to the commissioner for the filing of the application. (Amended by Stats. 2017, Ch. 534, Sec. 18. (AB 1699) Effective January 1, 2018.)
  145. 10110.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Every person is treated as having an insurable interest in certain lives and health interests listed in this section.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110. Every person has an insurable interest in the life and health of: (a) Himself. (b) Any person on whom he depends wholly or in part for education or support. (c) Any person under a legal obligation to him for the payment of money or respecting property or services, of which death or illness might delay or prevent the performance. (d) Any person upon whose life any estate or interest vested in him depends. (Enacted by Stats. 1935, Ch. 145.)
  146. 10110.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines insurable interest for life and disability insurance and sets when it must exist. It also lets an individual insure their own life, requires employer consent in some cases, and blocks insurance arrangements that lack a real insurable interest.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.1. (a) An insurable interest, with reference to life and disability insurance, is an interest based upon a reasonable expectation of pecuniary advantage through the continued life, health, or bodily safety of another person and consequent loss by reason of that person’s death or disability or a substantial interest engendered by love and affection in the case of individuals closely related by blood or law. (b) An individual has an unlimited insurable interest in his or her own life, health, and bodily safety and may lawfully take out a policy of insurance on his or her own life, health, or bodily safety and have the policy made payable to whomsoever he or she pleases, regardless of whether the beneficiary designated has an insurable interest. (c) Except as provided in Section 10110.4, an employer has an insurable interest, as referred to in subdivision (a), in the life or physical or mental ability of any of its directors, officers, or employees or the directors, officers, or employees of any of its subsidiaries or any other person whose death or physical or mental disability might cause financial loss to the employer; or, pursuant to any contractual arrangement with any shareholder concerning the reacquisition of shares owned by the shareholder at the time of his or her death or disability, on the life or physical or mental ability of that shareholder for the purpose of carrying out the contractual arrangement; or, pursuant to any contract obligating the employer as part of compensation arrangements or pursuant to a contract obligating the employer as guarantor or surety, on the life of the principal obligor. The trustee of an employer or trustee of a pension, welfare benefit plan, or trust established by an employer providing life, health, disability, retirement, or similar benefits to employees and retired employees of the employer or its affiliates and acting in a fiduciary capacity with respect to those employees, retired employees, or their dependents or beneficiaries has an insurable interest in the lives of employees and retired employees for whom those benefits are to be provided. The employer shall obtain the written consent of the individual being insured. (d) Trusts and special purpose entities that are used to apply for and initiate the issuance of policies of insurance for investors, where one or more beneficiaries of those trusts or special purpose entities do not have an insurable interest in the life of the insured, violate the insurable interest laws and the prohibition against wagering on life. (e) Any device, scheme, or artifice designed to give the appearance of an insurable interest where there is no legitimate insurable interest violates the insurable interest laws. (f) An insurable interest shall be required to exist at the time the contract of life or disability insurance becomes effective, but need not exist at the time the loss occurs. (g) Any contract of life or disability insurance procured or caused to be procured upon another individual is void unless the person applying for the insurance has an insurable interest in the individual insured at the time of the application. (h) Notwithstanding subdivisions (a), (f), and (g), a charitable organization that meets the requirements of Section 214 or 23701d of the Revenue and Taxation Code may effectuate life or disability insurance on an insured who consents to the issuance of that insurance. (i) This section shall not be interpreted to define all instances in which an insurable interest exists. (Amended by Stats. 2009, Ch. 343, Sec. 1. (SB 98) Effective January 1, 2010.)
  147. 10110.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer may rely on an applicant’s statements about insurable interest, and it is not liable for untrue statements it relied on in good faith except as the policy provides.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.2. An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest that the applicant has in the insured, and no insurer shall incur any legal liability except as set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer. (Added by Stats. 1990, Ch. 1418, Sec. 2.)
  148. 10110.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not issue an individual life insurance policy covering an applicant’s spouse unless the spouse has signed the application or was notified in advance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.3. (a) An insurer may not issue an individual life insurance policy to an applicant that insures the life of the applicant’s spouse unless the applicant’s spouse has signed the policy application or has otherwise been notified in advance of the issuance of the policy. (b) This section shall apply to policies of individual life insurance with face amounts exceeding fifty thousand dollars ($50,000) that are issued on or after July 1, 2004. (Added by Stats. 2003, Ch. 115, Sec. 1. Effective January 1, 2004.)
  149. 10110.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer generally may not issue, and a California employer generally may not buy or hold, a corporate-owned life insurance policy, with stated exceptions and disclosure rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.4. (a) Except as allowed in subdivision (c), an insurer may not issue or deliver a corporate-owned life insurance policy. (b) “Corporate-owned life insurance policy” means a life insurance policy that is purchased by a California employer, that designates the employer as the beneficiary of the policy, and that insures the life of a California resident who is a current or former employee of the employer. (c) This section does not apply to a policy insuring the life of a current or former exempt employee. An exempt employee is an administrative, executive, or professional employee who is exempt under Section 515 of the Labor Code and the regulations adopted pursuant thereto. (d) Except as provided in subdivision (f), it is a violation of public policy for a California employer to purchase or hold a corporate-owned life insurance policy. (e) (1) A corporate-owned life insurance policy purchased on or after the effective date of this section is void. (2) Except as provided in subdivision (f), a corporate-owned life insurance policy purchased prior to the effective date of this section shall become void on the next premium payment date on or after the date five years from the effective date of this section, but no later than January 1, 2010. (f) A corporate-owned life insurance policy purchased prior to the effective date of this section that insures the life of a current or former nonexempt employee shall continue in force after the effective date of this section provided that no further premium payments are made after the effective date of this section. However, an employer who has purchased and holds such a corporate-owned life insurance policy shall disclose in writing to the current or former nonexempt employee whose life is insured by the policy, within 90 days of the effective date of this section, all of the following information: (1) The existence of the corporate-owned life insurance policy on the life of the nonexempt employee. (2) The identity of the insurer under the policy. (3) The benefit amount under the policy, unless the full amount of the benefit is used to defray the costs of nonexempt employee benefits. (4) How benefits paid under the policy would be used. (5) The name of the beneficiary under the policy. (g) For a former employee, the disclosure requirements shall be deemed satisfied if the employer mails the required information to the former employee’s last known address. (Added by Stats. 2003, Ch. 328, Sec. 2. Effective January 1, 2004.)
  150. 10110.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Admitted life and disability insurers may add certain unemployment-related waiver provisions, but if they do, they must set up any additional reserves and file any additional financial reports the commissioner requires.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.5. (a) A policy or endorsement issued by an admitted life and disability insurer may contain a provision for a waiver of premium payments in the event of involuntary unemployment of the insured. Insurers issuing policies or endorsements containing that provision shall establish any additional reserves and file any additional financial reports that the commissioner may require. (b) A contract or supplemental contract issued by an admitted life and disability insurer may contain a provision for a waiver of surrender charge benefit for a life insurance or annuity contract in the event of voluntary or involuntary unemployment of the owner, insured, or annuitant, as applicable. Insurers issuing contracts or supplemental contracts containing that provision shall establish any additional reserves and file any additional financial reports that the commissioner may require. (Amended by Stats. 2013, Ch. 345, Sec. 1. (SB 281) Effective January 1, 2014.)
  151. 10110.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A life or disability insurance contract term that gives the insurer discretionary authority over benefits, coverage, or interpretation is void and unenforceable.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.6. (a) If a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or disability insurance coverage for any California resident contains a provision that reserves discretionary authority to the insurer, or an agent of the insurer, to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards of interpretation or review that are inconsistent with the laws of this state, that provision is void and unenforceable. (b) For purposes of this section, “renewed” means continued in force on or after the policy’s anniversary date. (c) For purposes of this section, the term “discretionary authority” means a policy provision that has the effect of conferring discretion on an insurer or other claim administrator to determine entitlement to benefits or interpret policy language that, in turn, could lead to a deferential standard of review by any reviewing court. (d) Nothing in this section prohibits an insurer from including a provision in a contract that informs an insured that as part of its routine operations the insurer applies the terms of its contracts for making decisions, including making determinations regarding eligibility, receipt of benefits and claims, or explaining policies, procedures, and processes, so long as the provision could not give rise to a deferential standard of review by any reviewing court. (e) This section applies to both group and individual products. (f) The commissioner may adopt regulations reasonably necessary to implement the provisions of this section. (g) This section is self-executing. If a life insurance or disability insurance policy, contract, certificate, or agreement contains a provision rendered void and unenforceable by this section, the parties to the policy, contract, certificate, or agreement and the courts shall treat that provision as void and unenforceable. (Added by Stats. 2011, Ch. 425, Sec. 1. (SB 621) Effective January 1, 2012.)
  152. 10110.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section requires specified disability insurance policies to cover COVID-19 testing, preventive items, and therapeutics, with no cost sharing and no prior authorization or similar utilization management in the stated cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.7. (a) This section, except for subdivision (i), applies to a disability insurance policy that provides coverage for hospital, medical, or surgical benefits, excluding a specialized health insurance policy and a policy that provides excepted benefits as described in Sections 2722 (42 U.S.C. Sec. 300gg-21) and 2791 (42 U.S.C. Sec. 300gg-91) of the federal Public Health Service Act, subject to Section 10198.61. (b) Notwithstanding any other law, a disability insurance policy shall cover the costs for COVID-19 diagnostic and screening testing and health care services related to the diagnostic and screening testing approved or granted emergency use authorization by the federal Food and Drug Administration for COVID-19, regardless of whether the services are provided by an in-network or out-of-network provider. Coverage required by this section shall not be subject to copayment, coinsurance, deductible, or any other form of cost sharing. Services related to COVID-19 diagnostic and screening testing include, but are not limited to, hospital or health care provider office visits for the purposes of receiving testing, products related to testing, the administration of testing, and items and services furnished to an insured as part of testing. Services related to COVID-19 diagnostic and screening testing do not include bonus payments for the use of specialized equipment or expedited processing. (1) To the extent a health care provider would have been entitled to receive cost sharing but for this section, the insurer shall reimburse the health care provider the amount of that lost cost sharing. (2) A disability insurance policy shall not impose prior authorization or any other utilization management requirements on COVID-19 diagnostic and screening testing. (3) With respect to an insured, a health insurer shall reimburse the provider of the testing according to either of the following: (A) If the health insurer has a specifically negotiated rate for COVID-19 diagnostic and screening testing with such provider in effect before the public health emergency declared under Section 319 of the Public Health Service Act (42 U.S.C. Sec. 247d), such negotiated rate shall apply throughout the period of such declaration. (B) If the health insurer does not have a specifically negotiated rate for COVID-19 diagnostic and screening testing with such provider, the insurer may negotiate a rate with such provider. (4) For an out-of-network provider with whom an insurer does not have a specifically negotiated rate for COVID-19 diagnostic and screening testing and health care services related to testing, an insurer shall reimburse the provider for all testing items or services in an amount that is reasonable, as determined in comparison to prevailing market rates for testing items or services in the geographic region where the item or service is rendered. An out-of-network provider shall accept this payment as payment in full, shall not seek additional remuneration from an insured for services related to testing, and shall not report adverse information to a consumer credit reporting agency or commence civil action against the insured. (5) Beginning six months after the federal public health emergency expires, an insurer shall no longer be required to cover the cost sharing for COVID-19 diagnostic and screening testing and health care services related to testing when delivered by an out-of-network provider, except as otherwise required by law. All other requirements of this subdivision shall remain in effect after the federal public health emergency expires. (c) (1) A disability insurance policy shall cover without cost sharing any item, service, or immunization that is intended to prevent or mitigate COVID-19 and that is either of the following with respect to the individual insured: (A) An evidence-based item or service that had in effect on January 1, 2025, a rating of “A” or “B” in the recommendations of the United States Preventive Services Task Force or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code. (B) An immunization that as of January 1, 2025, had in effect a recommendation from the Advisory Committee on Immunization Practices of the federal Centers for Disease Control and Prevention or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code, regardless of whether the immunization is recommended for routine use. (2) The items, services, and immunizations described in paragraph (1) that were in effect as of January 1, 2025, shall be covered upon the enactment of the act that added this paragraph. (3) Any modification or supplement to the recommendations described in paragraph (1) shall be covered no later than 15 business days after the date on which the State Department of Public Health publishes the updated recommendations pursuant to Section 120164 of the Health and Safety Code. (4) To the extent a health care provider would have been entitled to receive cost sharing but for this section, the insurer shall reimburse the health care provider the amount of that lost cost sharing. (5) (A) A disability insurance policy subject to this subdivision shall not impose any cost-sharing requirements, including a copayment, coinsurance, or deductible, for any item, service, or immunization described in paragraph (1), regardless of whether such service is delivered by an in-network or out-of-network provider. (B) A disability insurance policy shall not impose cost sharing for any items or services that are necessary for the furnishing of an item, service, or immunization described in paragraph (1), including, but not limited to, provider office visits and vaccine administration, regardless of whether the service is delivered by an in-network or out-of-network provider. (C) With respect to an insured, a health insurer shall reimburse the provider of the immunization according to either of the following: (i) If the health insurer has a negotiated rate with such provider in effect before the public health emergency declared under Section 319 of the Public Health Service Act (42 U.S.C. Sec. 247d), such negotiated rate shall apply throughout the period of such declaration. (ii) If the health insurer does not have a negotiated rate with such provider, the insurer may negotiate a rate with such provider. (D) For an out-of-network provider with whom a disability insurer does not have a negotiated rate for an item, service, or immunization described in paragraph (1), an insurer shall reimburse the provider for all such items or services, including any items or services that are necessary for the furnishing of an item, service, or immunization described in paragraph (1), in an amount that is reasonable, as determined in comparison to prevailing market rates for such items or services in the geographic region in which the item or service is rendered. An out-of-network provider shall accept this payment as payment in full, shall not seek additional remuneration from an insured, and shall not report adverse information to a consumer credit reporting agency or commence civil action against the insured for items, services, and immunizations described in paragraph (1), including any items or services that are necessary for the furnishing of an item, service, or immunization described in paragraph (1). (E) Beginning six months after the federal public health emergency expires, an insurer shall no longer be required to cover the cost sharing for any item, service, or immunization described in paragraph (1) and to cover any items or services that are necessary for the furnishing of the items, services, or immunizations described in paragraph (1) when delivered by an out-of-network provider, except as otherwise required by law. All other requirements of this section shall remain in effect after the federal public health emergency expires. (6) A disability insurer subject to this subdivision shall not impose prior authorization or any other utilization management requirements on any item, service, or immunization described in paragraph (1) or to items or services that are necessary for the furnishing of the items, services, or immunizations described in subparagraph (B) of paragraph (5). (d) The commissioner may issue guidance to insurers regarding compliance with this section. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). The department shall consult with the Department of Managed Health Care in issuing the guidance specified in this subdivision. (e) This section, excluding subdivision (i), shall apply retroactively beginning from the Governor’s declared State of Emergency related to the SARS-CoV-2 (COVID-19) pandemic on March 4, 2020. (f) For purposes of this section: (1) “Diagnostic testing” means all of the following: (A) Testing intended to identify current or past infection and performed when a person has signs or symptoms consistent with COVID-19, or when a person is asymptomatic but has recent known or suspected exposure to SARS-CoV-2. (B) Testing a person with symptoms consistent with COVID-19. (C) Testing a person as a result of contact tracing efforts. (D) Testing a person who indicates that they were exposed to someone with a confirmed or suspected case of COVID-19. (E) Testing a person after an individualized clinical assessment by a licensed health care provider. (2) “Screening testing” means tests that are intended to identify people with COVID-19 who are asymptomatic and do not have known, suspected, or reported exposure to SARS-CoV-2. Screening testing helps to identify unknown cases so that measures can be taken to prevent further transmission. Screening testing includes all of the following: (A) Workers in a workplace setting. (B) Pupils, faculty, and staff in a school setting. (C) A person before or after travel. (D) At home for someone who does not have symptoms associated with COVID-19 and does not have a known exposure to someone with COVID-19. (g) This section does not relieve an insurer from continuing to cover testing as required by federal law and guidance. (h) The department shall hold insurers accountable for timely access to services required under this section and coverage requirements established under federal law, regulations, or guidelines. (i) (1) This subdivision applies to a disability insurance policy issued, amended, or renewed on or after the operative date of this subdivision that covers hospital, medical, surgical, or prescription drug benefits, excluding a specialized health insurance policy that provides coverage only for dental or vision benefits, with respect to therapeutics for COVID-19 covered under the policy, which shall include therapeutics approved or granted emergency use authorization by the federal Food and Drug Administration for treatment of COVID-19 when prescribed or furnished by a licensed health care provider acting within their scope of practice and the standard of care. (2) A disability insurer shall reimburse a provider for the therapeutics described in paragraph (1) at the specifically negotiated rate for those therapeutics, if the insurer and provider have negotiated a rate. If the insurer does not have a negotiated rate with a provider, the insurer may negotiate a rate with the provider. (3) For an out-of-network provider with whom a disability insurer does not have a negotiated rate for the therapeutics described in paragraph (1), a disability insurer shall reimburse the provider for the therapeutics in an amount that is reasonable, as determined in comparison to prevailing market rates for the therapeutics in the geographic region in which the therapeutic was delivered. An out-of-network provider shall accept this payment as payment in full, shall not seek additional remuneration from an insured, and shall not report adverse information to a consumer credit reporting agency or commence civil action against the insured for therapeutics described in this subdivision. (4) A disability insurer shall cover COVID-19 therapeutics without cost sharing, regardless of whether the therapeutics are provided by an in-network or out-of-network provider, and without utilization management. If a provider would have been entitled to receive cost sharing but for this section, the disability insurer shall reimburse the provider for the amount of that lost cost sharing. A provider shall accept this payment as payment in full, shall not seek additional remuneration from an insured, and shall not report adverse information to a consumer credit reporting agency or commence civil action against the insured for therapeutics pursuant to this subdivision. (5) Beginning six months after the federal public health emergency expires, a disability insurer shall no longer be required to cover the cost sharing for COVID-19 therapeutics delivered by an out-of-network provider, unless otherwise required by law. All other requirements of this subdivision shall remain in effect after the federal public health emergency expires. (Amended by Stats. 2025, Ch. 105, Sec. 43. (AB 144) Effective September 17, 2025.)
  153. 10110.75.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Certain disability insurance policies must cover specified preventive, testing, and treatment-related health services without cost sharing or prior authorization during a declared public health emergency, with some timing rules for updated recommendations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.75. (a) This section applies to a disability insurance policy that provides coverage for hospital, medical, surgical, or prescription drug benefits, excluding a specialized health insurance policy that provides coverage only for dental or vision benefits. (b) (1) A disability insurance policy shall cover, without cost sharing and without prior authorization or other utilization management requirements, the costs of the following health care services to prevent or mitigate a disease when the Governor of the State of California has declared a public health emergency due to that disease: (A) An item or service that, as of January 1, 2025, had in effect a rating of “A” or “B” in the recommendations of the United States Preventive Services Task Force, or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code. (B) An immunization that, as of January 1, 2025, had in effect a recommendation of the Advisory Committee on Immunization Practices of the federal Centers for Disease Control and Prevention, or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code. (C) A health care service or product related to diagnostic and screening testing for the disease that is approved or granted emergency use authorization by the federal Food and Drug Administration, or is recommended by the State Department of Public Health or the federal Centers for Disease Control and Prevention. (D) Therapeutics approved or granted emergency use authorization by the federal Food and Drug Administration for the disease. (2) The items, services, and immunizations described in subparagraphs (A) and (B) of paragraph (1) that were in effect as of January 1, 2025, shall be covered upon enactment of the act that amended this section. (3) Any modification or supplement to the recommendations described in subparagraphs (A) or (B) of paragraph (1) that is adopted pursuant to Section 120164 of the Health and Safety Code shall be covered no later than 15 business days after the date on which the State Department of Public Health publishes the updated schedule pursuant to Section 120164 of the Health and Safety Code. (4) The item, service, or immunization covered pursuant to paragraph (1) shall be covered no later than 15 business days after the date on which the United States Preventive Services Task Force, the American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, the American Academy of Family Physicians or the State Department of Public Health makes a recommendation relating to the item, service, or immunization. (Amended by Stats. 2025, Ch. 105, Sec. 44. (AB 144) Effective September 17, 2025.)
  154. 10110.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Life and disability insurance policies cannot treat living organ donors worse solely because of that status.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.8. (a) A life or disability insurance policy other than health insurance, as defined in Section 106, issued, amended, renewed, or delivered on or after January 1, 2020, shall not do any of the following based solely and without any additional actuarial risks upon the status of a person as a living organ donor: (1) Refuse to insure, or refuse to continue to insure, the person under a life or disability insurance policy. (2) Limit the amount, extent, or kind of coverage available to the person under a life or disability insurance policy. (3) Charge the person a different rate for the same coverage under a life or disability insurance policy. (4) Otherwise discriminate in the offering, issuance, cancellation, amount of coverage, price, or any other condition of a life or disability insurance policy for the person. (b) With respect to any health condition other than being a living organ donor, a person who is a living organ donor shall be subject to the same standards of sound actuarial principles or actual or reasonably anticipated experience as persons who are not living organ donors. (c) For purposes of this section, “living organ donor” means an individual who has donated all or part of an organ and is not deceased. (Added by Stats. 2019, Ch. 316, Sec. 4. (AB 1223) Effective January 1, 2020.)
  155. 10110.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurers or their delegates must use the latest CAQH credentialing form and processes, limit extra information requests, and providers must respond within 10 business days and keep CAQH credentialing information up to date.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10110.9. (a) Notwithstanding any other law, except as provided in Section 10144.56, on and after January 1, 2028, a health insurer or its delegate shall subscribe to and use the most recent version of the Council for Affordable Quality Healthcare (CAQH) credentialing form, and shall comply with the CAQH credentialing processes. (b) A health insurer or its delegate shall only request additional information from a provider to clarify and confirm information that is provided on the CAQH credentialing form, including verification of information not specifically disclosed on the provider’s application. The provider shall respond to the request within 10 business days. A health insurer or its delegate shall minimize the number of requests for additional information from providers. A provider shall submit their credentialing form and maintain their credentialing information in the CAQH database in a manner consistent with CAQH standards. (Added by Stats. 2025, Ch. 630, Sec. 3. (AB 1041) Effective January 1, 2026.)
  156. 10111.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    In life or disability insurance, liability and damages are measured only by the sums payable under the policy to the person entitled to receive them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10111. In life or disability insurance, the only measure of liability and damage is the sum or sums payable in the manner and at the times as provided in the policy to the person entitled thereto. (Amended by Stats. 1935, Ch. 246.)
  157. 10111.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    For certain disability insurance policies, the insurer must pay benefits within 30 calendar days after it has all information needed to decide liability, subject to listed exclusions from that time period.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10111.2. (a) Under a policy of disability insurance other than health insurance, as defined in Section 106, including a policy of disability income insurance, as defined in subdivision (c) of Section 799.01, payment of benefits to the insured shall be made within 30 calendar days after the insurer has received all information needed to determine liability for a claim. However, the 30-calendar-day period shall not include any time during which the insurer is doing any of the following: (1) Awaiting a response for relevant medical information from a health care provider. (2) Awaiting a response from the claimant to a request for additional relevant information. (3) Investigating possible fraud that has been reported to the department’s Fraud Division in compliance with subdivision (a) of Section 1872.4. (b) If the insurer has not received all information needed to determine liability for a claim within 30 calendar days after receipt of the claim, the insurer shall notify the insured in writing and include a written list of all information it reasonably needs to determine liability for the claim. In that event, the 30-calendar-day period set out in subdivision (a) shall commence when the insured has provided to the insurer all information in that notification. If no notice is sent by the insurer within 30 calendar days after the claim is filed by the insured, interest shall begin to accrue on the payment of benefits on the 31st calendar day after receipt of the claim, at the rate of 10 percent per year. (c) When the insurer has received all information needed to determine liability for a claim, and the insurer determines that liability exists and fails to make payment of benefits to the insured within 30 calendar days after the insurer has received that information, any delayed payment shall bear interest, beginning the 31st calendar day, at the rate of 10 percent per year. Liability shall, in all cases, be determined by the insurer within 30 calendar days of receiving all information set out in the insurer’s written notification to the insured. (d) Nothing in this section is intended to restrict any other remedies available to an insured by statute or any other law. (Amended by Stats. 2022, Ch. 424, Sec. 25. (SB 1242) Effective January 1, 2023.)
  158. 10111.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer is not liable for life insurance payments if the accident-or-suicide issue cannot be resolved without an autopsy and the autopsy is prohibited; good-faith refusal or delay in those circumstances also avoids exemplary or punitive damages.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10111.5. An insurer shall not be liable for payments claimed under an individual or group policy of life insurance if the duty to make those payments depends upon a factual determination of whether the death of the insured was an accident or a suicide and that fact cannot be established without an autopsy and the autopsy is prohibited under Section 27491.43 of the Government Code. Insurers refusing or delaying payments in those circumstances in good faith shall not be liable for exemplary or punitive damages. (Added by Stats. 1984, Ch. 1731, Sec. 2.)
  159. 10111.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not deny, cancel, refuse, or price life insurance differently just because of an applicant’s or insured person’s lawful travel destinations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10111.7. (a) An insurer shall not deny or refuse to accept an application for life insurance, or refuse to insure, refuse to renew, cancel, restrict, or otherwise terminate a policy of life insurance, or charge a different rate for the same life insurance coverage, based solely upon the applicant’s or insured’s past or future lawful travel destinations. (b) Nothing in this section shall prohibit an insurer from excluding or limiting coverage under a life insurance policy, or refusing to offer life insurance, based upon lawful travel, or from charging a different rate for that coverage, when that action is based upon sound actuarial principles or is related to actual and reasonably expected experience. (Added by Stats. 2005, Ch. 446, Sec. 1. Effective January 1, 2006.)
  160. 10112.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Minors can contract for certain life, disability, or annuity insurance, but some contracts need a parent or guardian’s written consent or written assumption of liability.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112. Subject to Section 2459 of the Probate Code, in respect to life or disability insurance, or annuity contracts (except as provided in Sections 2500 to 2507, inclusive, of the Probate Code and Section 3500 of the Probate Code and Chapter 4 (commencing with Section 3600) of Part 8 of Division 4 of the Probate Code), heretofore or hereafter issued to or upon the life of any person not of a full 18 years of age for the benefit of such minor or for the benefit of the father, mother, spouse, child, brother, or sister, of such minor, or issued to such minor, subject to written consent of a parent or guardian, upon the life of any person in whom such minor has an insurable interest for the benefit of himself or herself or such minor’s father, mother, spouse, child, brother or sister, such minor shall not, by reason only of such minority, be deemed incompetent to contract for such insurance or annuity, or for the surrender thereof, or to exercise all contractual rights thereunder, or, subject to approval of a parent or guardian, to give a valid discharge for any benefit accruing or for any money payable thereunder; provided, that all such contracts made by a minor under 16 years of age, as determined by the nearest birthday, shall have the written consent of a parent or guardian, and that the exercise of all contractual rights under such contracts, or the surrender thereof, or the giving of a valid discharge for any benefit accruing or money payable thereunder, in the case of a minor under 16 years of age, as determined by the nearest birthday, shall have the written consent of a parent or guardian. All such contracts made by a minor not of a full 18 years of age which may result in any personal liability for assessment shall have the written assumption of any such liability by a parent or guardian in consideration of the issuance of the contract. Such assumption shall be in a form approved by the commissioner, reasonably designed to inform the parent or guardian of the liability thus assumed. Such assumption of liability may be made a part of and included with any written consent of such parent or guardian required under other provisions of this section and it may be provided therein that such assumption shall cover only up to the anniversary date of the policy nearest to the member’s birthday at which he or she attains 18 years of age. (Amended by Stats. 2016, Ch. 50, Sec. 57. (SB 1005) Effective January 1, 2017.)
  161. 10112.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurance policies may not set lifetime or annual dollar limits on covered benefits for an insured, except for certain non-essential benefits and excluded policy types.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.1. (a) An individual or group health insurance policy shall not establish either of the following: (1) Lifetime limits on the dollar value of any covered benefits for an insured, whether provided in network or out of network. (2) Annual limits on the dollar value of any covered benefits for an insured, whether provided in network or out of network. (b) Subdivision (a) does not prevent a group health insurance policy from placing annual or lifetime per-insured limits on specific covered benefits that are not essential health benefits, as defined under Section 10112.27, to the extent that those limits are otherwise permitted under state law. (c) This section does not apply to a specialized health insurance policy that does not cover an essential health benefit, as defined under Section 10112.27, or a Medicare supplement policy. (Repealed and added by Stats. 2020, Ch. 302, Sec. 15. (SB 406) Effective September 29, 2020.)
  162. 10112.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Certain nongrandfathered health insurance policies must cover specified preventive services without cost-sharing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.2. (a) A group or individual nongrandfathered health insurance policy shall, at a minimum, provide coverage for and shall not impose any cost-sharing requirements for any of the following: (1) Evidence-based items or services that had in effect on January 1, 2025, a rating of “A” or “B” in the recommendations of the United States Preventive Services Task Force or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code. (2) Immunizations that had in effect on January 1, 2025, a recommendation from the Advisory Committee on Immunization Practices of the federal Centers for Disease Control and Prevention or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code with respect to the individual involved. (3) With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided in the comprehensive guidelines, as periodically updated, supported by the United States Health Resources and Services Administration as of January 1, 2025, or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code. (4) With respect to women, those additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by the United States Health Resources and Services Administration as of January 1, 2025, or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code. (5) For the purposes of this section: (A) The recommendations of the United States Preventive Services Task Force as of January 1, 2025, or any modification or supplement to that recommendation adopted pursuant to Section 120164 of the Health and Safety Code regarding breast cancer screening, mammography, and prevention shall be considered the most current other than those issued in or around November 2009. (B) A health insurance policy issued, amended, or renewed on or after January 1, 2025, shall not impose any cost-sharing requirements for any items or services that are integral to the provision of an item or service that is required by this section, regardless of whether or not the integral item or service is billed separately from an item or service that is required by this section. (6) For the purposes of this section, a health insurance policy shall not impose cost sharing for office visits associated with the preventive care services described in this section if the preventive care service is not billed separately, or is not tracked as an individual encounter separately, from the office visit and the primary purpose of the office visit is the delivery of the preventive care service. (b) This section does not prohibit a health insurance policy from providing coverage for preventive items or services in addition to those required by subdivision (a). (c) A health insurer shall provide coverage pursuant to subdivision (a) for policy years that begin on or after the date that is one year after the date the recommendation or guideline is issued. (1) A health insurer that is required to provide coverage for any items and services specified in a recommendation or guideline described in subdivision (a) on the first day of a policy year shall provide coverage through the last day of the policy year, even if the recommendation or guideline changes or is no longer described in subdivision (a) during the policy year. (2) Notwithstanding paragraph (1) and consistent with the authority granted to the State Department of Public Health pursuant to Section 120164 of the Health and Safety Code, if any item or service associated with any recommendation or guideline specified in subdivision (a) is subject to a safety recall or is otherwise determined to pose a significant safety concern by a federal agency authorized to regulate the item or service during a policy year, a health insurer is not required to cover the item or service through the last day of the policy year. (d) A health insurance policy issued, amended, or renewed on or after January 1, 2025, shall cover items and services pursuant to this section in accordance with any applicable requirement of this part, including, but not limited to, Section 10123.18 on cervical cancer screening, Section 10123.1933 on prophylaxis of HIV infection, Section 10123.207 on colorectal cancer screening, and Section 10123.208 on home test kits for sexually transmitted diseases. (e) This section does not apply to a specialized health insurance policy that does not cover an essential health benefit, as defined in Section 10112.27. This section shall only apply to a health savings account-eligible health insurance policy to the extent it does not fail to be treated as a high deductible health insurance policy under Section 223 of Title 26 of the United States Code. (f) The department shall coordinate with the Department of Managed Health Care if it adopts regulations to implement this section. (g) The commissioner may exercise the authority provided by this code and the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) to implement and enforce this section and all sections related to preventive services, including those referenced herein. If the commissioner assesses a civil penalty for a violation, any hearing that is requested by the insurer may be conducted by an administrative law judge of the Administrative Hearing Bureau of the department under the formal procedure of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. A civil penalty shall not exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, shall not exceed ten thousand dollars ($10,000) for each violation. This subdivision does not impair or restrict the commissioner’s authority pursuant to another provision of this code or the Administrative Procedure Act. (Amended by Stats. 2025, Ch. 105, Sec. 45. (AB 144) Effective September 17, 2025.)
  163. 10112.25.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurers in scope must pay annual rebates when specified medical loss ratios fall below the required levels, and they must meet minimum medical loss ratios.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.25. (a) A health insurer that issues, sells, renews, or offers health insurance policies for health care coverage in this state, including a grandfathered health plan, but not including specialized health insurance policies that provide only dental or vision services, shall provide an annual rebate to each insured under that coverage, on a pro rata basis, if the ratio of the amount of premium revenue expended by the health insurer on the costs for reimbursement for clinical services provided to insureds under that coverage and for activities that improve health care quality to the total amount of premium revenue, excluding federal and state taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance, is less than the following: (1) With respect to a health insurer offering coverage in the large group market, 85 percent. (2) With respect to a health insurer offering coverage in the small group market or in the individual market, 80 percent. (b) A health insurer that issues, sells, renews, or offers health insurance policies for health care coverage in this state, including a grandfathered health plan, shall comply with the following minimum medical loss ratios: (1) With respect to a health insurer offering coverage in the large group market, 85 percent. (2) With respect to a health insurer offering coverage in the small group market or in the individual market, 80 percent. (c) (1) The total amount of an annual rebate required under this section shall be calculated in an amount equal to the product of the following: (A) The amount by which the percentage described in paragraph (1) or (2) of subdivision (a) exceeds the ratio described in paragraph (1) or (2) of subdivision (a). (B) The total amount of premium revenue, excluding federal and state taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance. (2) A health insurer shall provide a rebate owing to an insured no later than September 30 of the calendar year following the year for which the ratio described in subdivision (a) was calculated. (d) The commissioner may adopt regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) that are necessary to implement the medical loss ratio as described under Section 2718 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-18), and any federal rules or regulations issued under that section. (e) The requirements of this section shall be implemented as described in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91) and the requirements of Section 2718 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-18) and any rules or regulations issued under those sections as in effect on January 1, 2017. (f) This section does not apply to a health care service plan contract or insurance policy issued, sold, renewed, or offered for health care services or coverage provided in the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code). (Amended by Stats. 2018, Ch. 678, Sec. 2. (AB 2499) Effective January 1, 2019.)
  164. 10112.26.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Some health insurers must file an annual MLR report by July 31, and the department must post it online within 45 days of receiving it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.26. (a) A health insurer that issues, sells, renews, or offers a policy covering dental services shall file a report with the department, by July 31 of each year, which shall be known as the MLR annual report. The MLR annual report shall be organized by market and product type and contains the same information required in the 2013 federal Medical Loss Ratio (MLR) Annual Reporting Form (CMS-10418). The department shall post a health insurer’s MLR annual report on its Internet Web site within 45 days after receiving the report. (b) The MLR reporting year shall be for the calendar year during which dental coverage is provided by the plan. As applicable, all terms used in the MLR annual report shall have the same meaning as used in the federal Public Health Service Act (42 U.S.C. Sec. 300gg-18) and Part 158 (commencing with Section 158.101) of Title 45 of the Code of Federal Regulations. (c) If the commissioner decides to conduct an examination, as described in Section 730, because the commissioner finds it necessary to verify the health insurer’s representations in the MLR annual report, the department shall provide the health insurer with a notification 30 days before the commencement of the examination. (d) The health insurer shall have 30 days from the date of notification to electronically submit to the department all requested records, books, and papers specified in subdivision (a) of Section 733. The commissioner may extend the time for a health insurer to comply with this subdivision upon a finding of good cause. (e) The department shall make available to the public all of the data provided to the department pursuant to this section. (f) This section does not apply to an insurance policy issued, sold, renewed, or offered for health care services or coverage provided in the Medi-Cal program (Chapter 7 (commencing with Section 14000) and Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code), the Medi-Cal Access Program (Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code), or the California Major Risk Medical Insurance Program (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code), to the extent consistent with the federal Patient Protection and Affordable Care Act (Public Law 111-148). (g) This section does not apply to disability insurance for covered benefits in the single specialized area of dental-only health care that pays benefits on a fixed benefit, cash payment only basis. (h) The department may issue guidance to health insurers of specialized health insurance policies subject to this section regarding compliance with this section. The guidance shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), and shall be effective only until the department adopts regulations pursuant to that act. The department shall consult with the Department of Managed Health Care in issuing the guidance specified in this section. (Amended by Stats. 2018, Ch. 933, Sec. 4. (SB 1008) Effective January 1, 2019.)
  165. 10112.27.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurance policies in scope must cover essential health benefits, and insurers may not market noncompliant products as compliant.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.27. (a) An individual or small group health insurance policy issued, amended, or renewed on or after January 1, 2017, shall include, at a minimum, coverage for essential health benefits pursuant to the federal Patient Protection and Affordable Care Act (PPACA) and as outlined in this section. This section shall exclusively govern the benefits a health insurer must cover as essential health benefits. For purposes of this section, “essential health benefits” means all of the following: (1) Health benefits within the categories identified in Section 1302(b) of PPACA: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. (2) (A) The health benefits covered by the Kaiser Foundation Health Plan Small Group HMO 30 plan (federal health product identification number 40513CA035) as this plan was offered during the first quarter of 2014, as follows, regardless of whether the benefits are specifically referenced in the plan contract or evidence of coverage for that plan: (i) Medically necessary basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code and Section 1300.67 of Title 28 of the California Code of Regulations. (ii) The health benefits mandated to be covered by the plan pursuant to statutes enacted before December 31, 2011, as described in the following sections of the Health and Safety Code: Sections 1367.002, 1367.06, and 1367.35 (preventive services for children); Section 1367.25 (prescription drug coverage for contraceptives); Section 1367.45 (AIDS vaccine); Section 1367.46 (HIV testing); Section 1367.51 (diabetes); Section 1367.54 (alpha-fetoprotein testing); Section 1367.6 (breast cancer screening); Section 1367.61 (prosthetics for laryngectomy); Section 1367.62 (maternity hospital stay); Section 1367.63 (reconstructive surgery); Section 1367.635 (mastectomies); Section 1367.64 (prostate cancer); Section 1367.65 (mammography); Section 1367.66 (cervical cancer); Section 1367.665 (cancer screening tests); Section 1367.67 (osteoporosis); Section 1367.68 (surgical procedures for jaw bones); Section 1367.71 (anesthesia for dental); Section 1367.9 (conditions attributable to diethylstilbestrol); Section 1368.2 (hospice care); Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency response ambulance or ambulance transport services); subdivision (b) of Section 1373 (sterilization operations or procedures); Section 1373.4 (inpatient hospital and ambulatory maternity); Section 1374.56 (phenylketonuria); Section 1374.17 (organ transplants for HIV); Section 1374.72 (mental health parity); and Section 1374.73 (autism/behavioral health treatment). (iii) Any other benefits mandated to be covered by the plan pursuant to statutes enacted before December 31, 2011, as described in those statutes. (iv) The health benefits covered by the plan that are not otherwise required to be covered under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code, to the extent otherwise required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22, 1367.24, and 1367.25 of the Health and Safety Code, and Section 1300.67.24 of Title 28 of the California Code of Regulations. (v) Any other health benefits covered by the plan that are not otherwise required to be covered under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. (B) If there are any conflicts or omissions in the plan identified in subparagraph (A) as compared with the requirements for health benefits under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code that were enacted before December 31, 2011, the requirements of Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code shall control, except as otherwise specified in this section. (C) Notwithstanding subparagraph (B) or any other provision of this section, the home health services benefits covered under the plan identified in subparagraph (A) shall not be in conflict with Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. (D) For purposes of this section, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Public Law 110-343) shall apply to a policy subject to this section. Coverage of mental health and substance use disorder services pursuant to this paragraph, along with any scope and duration limits imposed on the benefits, shall be in compliance with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Public Law 110-343), and all rules, regulations, and guidance issued pursuant to Section 2726 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26). (E) Commencing January 1, 2027, if the United States Department of Health and Human Services approves a new essential health benefits benchmark plan for the State of California pursuant to submissions to the department made on behalf of the state in 2025 for this purpose, the benchmark plan described in subparagraph (A) shall additionally include all of the following benefits: (i) Services to evaluate, diagnose, and treat infertility that include all of the following: (I) Artificial insemination. (II) Three attempts to retrieve gametes. (III) Three attempts to create embryos. (IV) Three rounds of pretransfer testing. (V) Cryopreservation of gametes and embryos. (VI) Two years of storage for cryopreserved embryos. (VII) Unlimited storage for cryopreserved gametes. (VIII) Unlimited embryo transfers. (IX) Two vials of donor sperm. (X) Ten donor eggs. (XI) Surrogacy coverage for the services described above. (XII) Health testing of the surrogate for each attempted round of covered services. (ii) All of the following durable medical equipment: (I) Mobility devices, including, but not limited to, walkers and manual and power wheelchairs and scooters. (II) Augmented communications devices, including, but not limited to, speech-generating devices, communications boards, and computer applications. (III) Continuous positive airway pressure machines. (IV) Portable oxygen. (V) Hospital beds. (iii) (I) An annual hearing exam. (II) One hearing aid per ear every three years. (3) With respect to habilitative services, in addition to any habilitative services and devices identified in paragraph (2), coverage shall also be provided as required by federal rules, regulations, or guidance issued pursuant to Section 1302(b) of PPACA. Habilitative services and devices shall be covered under the same terms and conditions applied to rehabilitative services and devices under the policy. Limits on habilitative and rehabilitative services and devices shall not be combined. (4) With respect to pediatric vision care, the same health benefits for pediatric vision care covered under the Federal Employees Dental and Vision Insurance Program vision plan with the largest national enrollment as of the first quarter of 2014. The pediatric vision care services covered pursuant to this paragraph shall be in addition to, and shall not replace, any vision services covered under the plan identified in paragraph (2). (5) With respect to pediatric oral care, the same health benefits for pediatric oral care covered under the dental benefit received by children under the Medi-Cal program as of 2014, including the provision of medically necessary orthodontic care provided pursuant to the federal Children’s Health Insurance Program Reauthorization Act of 2009. The pediatric oral care benefits covered pursuant to this paragraph shall be in addition to, and shall not replace, any dental or orthodontic services covered under the plan identified in paragraph (2). (b) Treatment limitations imposed on health benefits described in this section shall be no greater than the treatment limitations imposed by the corresponding plans identified in subdivision (a), subject to the requirements set forth in paragraph (2) of subdivision (a). (c) Except as provided in subdivision (d), this section does not permit a health insurer to make substitutions for the benefits required to be covered under this section, regardless of whether those substitutions are actuarially equivalent. (d) To the extent permitted under Section 1302 of PPACA and any rules, regulations, or guidance issued pursuant to that section, and to the extent that substitution would not create an obligation for the state to defray costs for any individual, an insurer may substitute its prescription drug formulary for the formulary provided under the plan identified in subdivision (a) if the coverage for prescription drugs complies with the sections referenced in clauses (ii) and (iv) of subparagraph (A) of paragraph (2) of subdivision (a) that apply to prescription drugs. (e) A health insurer, or its agent, producer, or representative, shall not issue, deliver, renew, offer, market, represent, or sell any product, policy, or discount arrangement as compliant with the essential health benefits requirement in federal law, unless it meets all of the requirements of this section. This subdivision shall be enforced in the same manner as Section 790.03, including through the means specified in Sections 790.035 and 790.05. (f) This section applies regardless of whether the policy is offered inside or outside the California Health Benefit Exchange created by Section 100500 of the Government Code. (g) This section does not exempt a health insurer or a health insurance policy from meeting other applicable requirements of law. (h) This section does not prohibit a policy from covering additional benefits, including, but not limited to, spiritual care services that are tax deductible under Section 213 of the Internal Revenue Code. (i) Subdivision (a) does not apply to any of the following: (1) A policy that provides excepted benefits as described in Sections 2722 and 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21; 42 U.S.C. Sec. 300gg-91). (2) A policy that qualifies as a grandfathered health plan under Section 1251 of PPACA or any binding rules, regulations, or guidance issued pursuant to that section. (j) This section shall not be implemented in a manner that conflicts with a requirement of PPACA. (k) An essential health benefit is required to be provided under this section only to the extent that federal law does not require the state to defray the costs of the benefit. (l) This section does not obligate the state to incur costs for the coverage of benefits that are not essential health benefits as defined in this section. (m) An insurer is not required to cover, under this section, changes to health benefits that are the result of statutes enacted on or after December 31, 2011. (n) (1) On or before January 1, 2027, the commissioner may issue guidance to health insurers regarding compliance with this section. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (2) The commissioner may promulgate regulations subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) to implement this section. This subdivision shall not be construed to impair or restrict the commissioner’s rulemaking authority pursuant to another provision of this code or the Administrative Procedure Act. (3) The commissioner shall consult with the Department of Managed Health Care in issuing guidance and in adopting regulations pursuant to paragraphs (1) and (2) for the purpose of implementing this section. (o) This section does not impose on health insurance policies the cost sharing or network limitations of the plans identified in subdivision (a) except to the extent otherwise required to comply with this code, including this section, and as otherwise applicable to all health insurance policies offered to individuals and small groups. (p) For purposes of this section, the following definitions apply: (1) “Habilitative services” means health care services and devices that help a person keep, learn, or improve skills and functioning for daily living. Examples include therapy for a child who is not walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient or outpatient settings, or both. Habilitative services shall be covered under the same terms and conditions applied to rehabilitative services under the policy. (2) (A) “Health benefits,” unless otherwise required to be defined pursuant to federal rules, regulations, or guidance issued pursuant to Section 1302(b) of PPACA, means health care items or services for the diagnosis, cure, mitigation, treatment, or prevention of illness, injury, disease, or a health condition, including a behavioral health condition. (B) “Health benefits” does not mean any cost-sharing requirements such as copayments, coinsurance, or deductibles. (3) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued thereunder. (4) “Small group health insurance policy” means a group health insurance policy issued to a small employer, as defined in subdivision (q) of Section 10753. (Amended by Stats. 2025, Ch. 680, Sec. 2. (AB 224) Effective January 1, 2026.)
  166. 10112.28.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section limits out-of-pocket costs and deductibles for certain nongrandfathered health insurance policies, especially for essential health benefits and family coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.28. (a) This section shall apply to nongrandfathered individual and group health insurance policies that provide coverage for essential health benefits, as defined in Section 10112.27, and that are issued, amended, or renewed on or after January 1, 2015. (b) (1) For nongrandfathered health insurance policies in the individual or small group markets, a health insurance policy, except a specialized health insurance policy, that is issued, amended, or renewed on or after January 1, 2015, shall provide for a limit on annual out-of-pocket expenses for all covered benefits that meet the definition of essential health benefits in Section 10112.27, including out-of-network emergency care. (2) For nongrandfathered health insurance policies in the large group market, a health insurance policy, except a specialized health insurance policy, that is issued, amended, or renewed on or after January 1, 2015, shall provide for a limit on annual out-of-pocket expenses for covered benefits, including out-of-network emergency care. This limit shall apply only to essential health benefits, as defined in Section 10112.27, that are covered under the policy to the extent that this provision does not conflict with federal law or guidance on out-of-pocket maximums for nongrandfathered health insurance policies in the large group market. (c) (1) The limit described in subdivision (b) shall not exceed the limit described in Section 1302(c) of PPACA and any subsequent rules, regulations, or guidance issued under that section. (2) The limit described in subdivision (b) shall result in a total maximum out-of-pocket limit for all covered essential health benefits that shall equal the dollar amounts in effect under Section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 with the dollar amounts adjusted as specified in Section 1302(c)(1)(B) of PPACA. (3) For family coverage, an individual within a family shall not have a maximum out-of-pocket limit that is greater than the maximum out-of-pocket limit for individual coverage for that product. (d) Nothing in this section shall be construed to affect the reduction in cost sharing for eligible insureds described in Section 1402 of PPACA and any subsequent rules, regulations, or guidance issued under that section. (e) If an essential health benefit is offered or provided by a specialized health insurance policy, the total annual out-of-pocket maximum for all covered essential benefits shall not exceed the limit in subdivision (b). This section shall not apply to a specialized health insurance policy that does not offer an essential health benefit as defined in Section 10112.27. (f) The maximum out-of-pocket limit shall apply to any copayment, coinsurance, deductible, and any other form of cost sharing for all covered benefits that meet the definition of essential health benefits, as defined in Section 10112.27. (g) (1) (A) Except as provided in paragraph (2), if a health insurance policy for family coverage includes a deductible, an individual within a family shall not have a deductible that is greater than the deductible limit for individual coverage for that product. (B) Except as provided in paragraph (2), for a large group market health insurance policy for family coverage that is issued, amended, or renewed on or after January 1, 2017, includes a deductible, an individual within a family shall not have a deductible that is greater than the deductible limit for individual coverage for that product. (2) (A) If a health insurance policy for family coverage includes a deductible and is a high deductible health plan under the definition set forth in Section 223(c)(2) of Title 26 of the United States Code, the policy shall include a deductible for each individual covered by the policy that is equal to either the amount set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United States Code or the deductible for individual coverage under the policy, whichever is greater. (B) If a large group market health insurance policy for family coverage that is issued, amended, or renewed on or after January 1, 2017, includes a deductible and is a high deductible health plan under the definition set forth in Section 223(c)(2) of Title 26 of the United States Code, the policy shall include a deductible for each individual covered by the policy that is equal to either the amount set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United States Code or the deductible for individual coverage under the policy, whichever is greater. (h) For nongrandfathered health insurance policies in the group market, “policy year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. For nongrandfathered health insurance policies sold in the individual market, “policy year” means the calendar year. (i) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued thereunder. (Amended by Stats. 2015, Ch. 641, Sec. 3. (AB 1305) Effective January 1, 2016.)
  167. 10112.281.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Large group health insurance policies issued, amended, or renewed on or after July 1, 2022 must cover medically necessary basic health care services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.281. (a) A large group health insurance policy issued, amended, or renewed on or after July 1, 2022, shall cover medically necessary basic health care services. (b) “Basic health care services” means all the following: (1) Physician services, including consultation and referral. (2) Hospital inpatient services and ambulatory care services. (3) Diagnostic laboratory and diagnostic and therapeutic radiologic services. (4) Home health services. (5) Preventive health services. (6) Emergency health care services, including ambulance and ambulance transport services and out-of-area coverage. “Basic health care services” includes ambulance and ambulance transport services provided through the “911” emergency response system. (7) Hospice care that is, at a minimum, equivalent to hospice care provided by the federal Medicare Program pursuant to Title XVIII of the Social Security Act (42 U.S.C. Sec. 1395 et seq.) and implementing regulations adopted for hospice care under Title XVIII of the Social Security Act in Part 418 of Chapter IV of Title 42 of the Code of Federal Regulations, except Subparts A, B, G, and H, and any amendments or successor provisions. (c) “Out-of-area coverage” means coverage while an insured is anywhere outside the service area of the applicable network, and shall also include coverage for urgently needed services to prevent serious deterioration of an insured’s health resulting from unforeseen illness or injury for which treatment cannot be delayed until the insured returns to the service area. (d) This section does not prohibit a large group health insurance policy from covering additional benefits. (e) The commissioner may adopt regulations pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) to implement this section. Prior to adopting regulations, the commissioner shall consult with the Department of Managed Health Care to ensure consistency, to the extent practical, with Section 1300.67 of Title 28 of the California Code of Regulations. (f) (1) If Section 10112.27 is no longer in effect, this section and any regulations implementing this section shall apply to an individual, group, or blanket disability insurance policy that covers hospital, medical, or surgical benefits, except as provided in subdivision (g). (2) If the condition described in paragraph (1) occurs, the department shall post notice on its internet website that this section applies to an individual, group, or blanket disability insurance policy that covers hospital, medical, or surgical benefits, and shall provide written notice to the Secretary of the Senate, the Chief Clerk of the Assembly, and the Legislative Counsel. (g) This section does not apply to a specialized health insurance policy that covers only dental or vision benefits. (Added by Stats. 2021, Ch. 636, Sec. 1. (SB 280) Effective January 1, 2022.)
  168. 10112.282.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    For large group health insurance, insurers and their personnel must not use marketing or benefit designs that discourage enrollment or discriminate on listed protected grounds or health conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.282. (a) With respect to large group health insurance, an insurer and its officials, employees, agents, and representatives shall not, directly or indirectly, employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminating based on an individual’s race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions. (b) An insurer that violates this section shall be liable for an administrative penalty of not more than two thousand five hundred dollars ($2,500) for the first violation, and not more than five thousand dollars ($5,000) for each subsequent violation. (c) An insurer that violates this section with a frequency that indicates a general business practice or commits a knowing violation of this section shall be liable for an administrative penalty of not less than fifteen thousand dollars ($15,000), and not more than one hundred thousand dollars ($100,000) for each violation. (d) This section does not apply to a grandfathered large group health insurance policy or a specialized health insurance policy that covers only dental or vision benefits. (Added by Stats. 2021, Ch. 636, Sec. 2. (SB 280) Effective January 1, 2022.)
  169. 10112.29.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    For small employer health insurance policies, the deductible generally may not be more than $2,000 for a single individual or $4,000 for any other policy, with a limited department permission to allow higher deductibles for bronze-level small group products.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.29. (a) (1) For a small employer health insurance policy offered, sold, or renewed on or after January 1, 2014, the deductible under the policy shall not exceed: (A) Two thousand dollars ($2,000) in the case of a policy covering a single individual. (B) Four thousand dollars ($4,000) in the case of any other policy. (2) The dollar amounts in this section shall be indexed consistent with Section 1302(c)(4) of PPACA and any federal rules or guidance pursuant to that section. (3) The limitation in this subdivision shall be applied in a manner that does not affect the actuarial value of any small employer health insurance policy. (4) For small group products at the bronze level of coverage, as defined in Section 10112.295, the department may permit insurers to offer a higher deductible in order to meet the actuarial value requirement of the bronze level. In making this determination, the department shall consider affordability of cost sharing for insureds and shall also consider whether insureds may be deterred from seeking appropriate care because of higher cost sharing. (b) Nothing in this section shall be construed to allow a policy to have a deductible that applies to preventive services as defined in PPACA. (c) This section shall not apply to multiple employer welfare arrangements regulated pursuant to Article 4.7 (commencing with Section 742.20) of Chapter 1 of Part 2 of Division 1 that provide health care benefits to their members and that comply with small group health reforms unless otherwise required by federal law or guidance. (d) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued thereunder. (Amended by Stats. 2015, Ch. 641, Sec. 4. (AB 1305) Effective January 1, 2016.)
  170. 10112.291.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurers must track and disclose insureds’ deductible and out-of-pocket maximum accruals, and let insureds request the latest balance at any time.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.291. (a) For a health insurance policy issued, amended, or renewed on or after July 1, 2022, in the individual or group market, a health insurer shall monitor an insured’s accrual toward their annual deductible, if any, for covered benefits, as set forth in this section and any regulations promulgated by the department. (1) A health insurer shall provide an insured with their accrual balance toward their annual deductible for every month in which benefits were used and until the accrual balance equals the full deductible amount. (2) A health insurer subject to this section shall establish and maintain a system that allows an insured to request their most up-to-date accrual balance toward their annual deductible from their health insurer at any time. (3) If the health insurance policy includes more than one annual deductible for an insured, then this section applies to each deductible. (b) For a health insurance policy issued, amended, or renewed on or after July 1, 2022, in the individual or group market, an insurer shall monitor an insured’s accrual balance toward their annual out-of-pocket maximum, if any, for covered benefits, as set forth in this section and any regulations promulgated by the department. (1) A health insurer shall provide an insured with their accrual balance toward their annual out-of-pocket maximum for every month in which benefits were used and until the accrual balance equals the full out-of-pocket maximum. (2) A health insurer subject to this section shall establish and maintain a system that allows an insured to request their most up-to-date accrual balance toward their annual out-of-pocket maximum from their health insurer at any time. (c) Accrual updates shall be mailed to an insured unless the insured has elected to opt out of mailed notice and elected to receive the accrual update electronically as allowed according to Section 38.6, or unless the insured has previously opted out of mailed notices. (1) Insureds who have opted out of receiving mailed notice may opt back in at any time. (2) Accrual updates may be included with evidence of benefit statements. (d) A health insurer shall notify insureds of their rights pursuant to this section, including, but not limited to, how to request information and how to opt out of mailed notices and elect to instead receive their accrual update electronically, in the manner set forth by the department. The department may issue guidance regarding implementation of, and compliance with, this subdivision. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 1340) of Part 1 of Division 3 of Title 2 of the Government Code), until January 1, 2027. The department shall consult with stakeholders in developing guidance pursuant to this subdivision. (e) If a health insurer delegates claims payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, the delegated entity shall comply with the requirements of this section. A health insurer shall specify by contract the delegated entity’s responsibilities and shall monitor the delegated entity to ensure compliance with this section. Notwithstanding delegation pursuant to this subdivision, the health insurer shall remain responsible for compliance with this section. (Added by Stats. 2021, Ch. 602, Sec. 2. (SB 368) Effective January 1, 2022.)
  171. 10112.295.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section sets coverage-value rules for nongrandfathered individual health insurance plans and limits when catastrophic plans may be sold.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.295. (a) Levels of coverage for the nongrandfathered individual market are defined as follows: (1) Bronze level: A health insurance policy in the bronze level shall provide a level of coverage that is actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the policy. (2) Silver level: A health insurance policy in the silver level shall provide a level of coverage that is actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the policy. (3) Gold level: A health insurance policy in the gold level shall provide a level of coverage that is actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the policy. (4) Platinum level: A health insurance policy in the platinum level shall provide a level of coverage that is actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the policy. (b) Actuarial value for nongrandfathered individual health insurance policies shall be determined in accordance with the following: (1) Actuarial value shall not vary by more than plus or minus 2 percent. (2) Actuarial value shall be determined on the basis of essential health benefits as defined in Section 10112.27 and as provided to a standard, nonelderly population. For this purpose, a standard population shall not include those receiving coverage through the Medi-Cal or Medicare programs. (3) The department may use the actuarial value methodology developed consistent with Section 1302(d) of PPACA. (4) The actuarial value for pediatric dental benefits, whether offered by a major medical policy or a specialized health insurance policy, shall be consistent with federal law and guidance applicable to the policy type. (5) The department, in consultation with the Department of Managed Health Care and the Exchange, shall consider whether to exercise state-level flexibility with respect to the actuarial value calculator in order to take into account the unique characteristics of the California health care coverage market, including the prevalence of health insurance policies, total cost of care paid for by the health insurer, price of care, patterns of service utilization, and relevant demographic factors. (c) (1) A catastrophic policy is a health insurance policy that provides no benefits for any plan year until the insured has incurred cost-sharing expenses in an amount equal to the annual limit on out-of-pocket costs as specified in Section 10112.28 except that it shall provide coverage for at least three primary care visits. A carrier that is not participating in the Exchange shall not offer, market, or sell a catastrophic plan in the individual market. (2) A catastrophic policy may be offered only in the individual market and only if consistent with this paragraph. Catastrophic policies may be offered only if either of the following apply: (A) The individual purchasing the policy has not yet attained 30 years of age before the beginning of the plan year. (B) The individual has a certificate of exemption from Section 5000(A) of the Internal Revenue Code because the individual is not offered affordable coverage or because the individual faces hardship. (d) This section shall apply to a policy of health insurance, as defined in subdivision (b) of Section 106, that covers any essential health benefit as defined in Section 10112.27. This section shall not apply to a specialized health insurance policy that does not cover any of the essential health benefits. (e) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued thereunder. (Added by Stats. 2013, Ch. 316, Sec. 12. (SB 639) Effective January 1, 2014.)
  172. 10112.296.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    For certain nongrandfathered bronze level health insurance policies, the actuarial value may range from plus 5% to minus 2%.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.296. Notwithstanding paragraph (1) of subdivision (b) of Section 10112.295 and paragraph (1) of subdivision (b) of Section 10112.297, the actuarial value for a nongrandfathered bronze level health insurance policy that either covers and pays for at least one major service, other than preventive services, before the deductible or meets the requirements to be a high deductible health plan, as defined in Section 223(c)(2) of Title 26 of the United States Code, may range from plus 5 percent to minus 2 percent. (Amended by Stats. 2020, Ch. 12, Sec. 36. (AB 80) Effective June 29, 2020.)
  173. 10112.297.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section sets required actuarial value levels for bronze, silver, gold, and platinum health insurance policies in the nongrandfathered small group market, and gives the department limited authority to use a federal methodology.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.297. (a) Levels of coverage for the nongrandfathered small group market are defined as follows: (1) Bronze level: A health insurance policy in the bronze level shall provide a level of coverage that is actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the policy. (2) Silver level: A health insurance policy in the silver level shall provide a level of coverage that is actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the policy. (3) Gold level: A health insurance policy in the gold level shall provide a level of coverage that is actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the policy. (4) Platinum level: A health insurance policy in the platinum level shall provide a level of coverage that is actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the policy. (b) Actuarial value for nongrandfathered small employer health insurance policies shall be determined in accordance with the following: (1) Actuarial value shall not vary by more than plus or minus 2 percent. (2) Actuarial value shall be determined on the basis of essential health benefits as defined in paragraph (1) of subdivision (a) of Section 10112.27 and as provided to a standard, nonelderly population. For this purpose, a standard population shall not include those receiving coverage through the Medi-Cal or Medicare programs. (3) The department may use the actuarial value methodology developed consistent with Section 1302(d) of PPACA. (4) The actuarial value for pediatric dental benefits, whether offered by a major medical policy or a specialized health insurance policy, shall be consistent with federal law and guidance applicable to the policy type. (5) The department, in consultation with the Department of Managed Health Care and the Exchange, shall consider whether to exercise state-level flexibility with respect to the actuarial value calculator in order to take into account the unique characteristics of the California health care coverage market, including the prevalence of health insurance policies, total cost of care paid for by the health insurer, price of care, patterns of service utilization, and relevant demographic factors. (6) Employer contributions toward health reimbursement accounts and health savings accounts shall count toward the actuarial value of the product in the manner specified in federal rules and guidance. (c) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued thereunder. (Added by Stats. 2013, Ch. 316, Sec. 13. (SB 639) Effective January 1, 2014.)
  174. 10112.300.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section lets certain small employer health benefit plans be renewed and kept in force for a limited period, and it requires insurers to send specified renewal notices and plan information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.300. (a) (1) A small employer health benefit plan in effect on December 31, 2013, and still in effect as of the effective date of this section, that does not qualify as a grandfathered health plan under Section 1251 of PPACA may be renewed until January 1, 2015, and may continue to be in force until December 31, 2015, subject to applicable federal law, and any other requirements imposed by this part. (2) A small employer health benefit plan described in paragraph (1) may continue to be in force after December 31, 2015, if the plan is amended to comply with all of the provisions listed in subdivision (e) by January 1, 2016, and complies with all other applicable provisions of law. (b) (1) If an insurer offers for renewal a small employer health benefit plan pursuant to paragraph (1) of subdivision (a), the insurer shall provide notice to the group contractholder regarding the option to renew coverage pursuant to subdivision (a) using the relevant notice attached to the guidance entitled “Insurance Standards Bulletin Series – Extension of Transition Policy through October 1, 2016,” issued by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services on March 5, 2014. (2) An insurer shall include the following notice with the notice issued pursuant to paragraph (1): “New health care coverage options are available in California. You currently have health care coverage that is not required to comply with many new laws. A new health benefit plan may be more affordable and/or offer more comprehensive benefits. New plans may also have limits on deductibles and out-of-pocket costs, while your existing plan may have no such limits. You have the option to remain with your current coverage for one more year or switch to new coverage that complies with the new laws. Covered California, the state’s new health insurance marketplace, offers small employers health insurance from a number of companies through its Small Business Health Options Program (SHOP). Federal tax credits are available through the SHOP to those small employers that qualify. Talk to Covered California (1-877-453-9198), your plan representative, or your insurance agent to discuss your options.” (3) An insurer shall include with the notices issued pursuant to paragraphs (1) and (2), the premium, cost sharing, and benefits associated with the plan’s standard benefit designs approved consistent with subdivision (c) of Section 100504 of the Government Code for the geographic region of the small employer. (4) An insurer that offers for renewal a small employer health benefit plan pursuant to paragraph (1) of subdivision (a) shall offer renewal to all employers whose health benefit plan with that insurer was in effect on December 31, 2013. (c) (1) A small employer health benefit plan in effect on December 31, 2013, and still in effect as of the effective date of this section, that does not qualify as a grandfathered health plan under Section 1251 of PPACA that is renewed on or before January 1, 2015, and that continues to be in force until no later than December 31, 2015, is exempt from the following provisions: (A) Paragraph (1) of subdivision (b) of, and subdivisions (c), (g), and (k) of, Section 10753.05. (B) Section 10753.14. (C) Section 10112.27. (D) Section 10112.285. (E) Section 10112.28. (F) Section 10112.29. (G) Section 10112.297. (2) Notwithstanding paragraph (1) of subdivision (b) of, and subdivision (g) of, Section 10753.05, a small employer health benefit plan subject to this section shall only be offered, marketed, and sold to an employer whose health benefit plan with that insurer was in effect on December 31, 2013. (d) A small employer health benefit plan described in paragraph (1) of subdivision (a) shall be subject to Sections 10714 and 10715, and shall continue to be subject to Chapter 8.01 (commencing with Section 10753), except as provided in subdivision (c), and to all otherwise applicable provisions of this part. (e) No later than January 1, 2016, a small employer health benefit plan described in paragraph (1) of subdivision (a) may be amended to comply with all of the following: (1) Paragraph (1) of subdivision (b) of, and subdivisions (c), (g), and (k) of, Section 10753.05. (2) Section 10753.14. (3) Section 10112.27. (4) Section 10112.28. (5) Section 10112.29. (6) Section 10112.297. (f) This section shall be implemented only to the extent permitted by PPACA. (g) For purposes of this section, the following definitions shall apply: (1) “Health benefit plan” has the same meaning as defined in subdivision (j) of Section 10753. (2) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law. (3) “Small employer health benefit plan” means a group health benefit plan issued to a small employer, as defined in Section 10753. (Added by Stats. 2014, Ch. 84, Sec. 2. (SB 1446) Effective July 7, 2014.)
  175. 10112.35.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer selling individual coverage through the Exchange must cooperate with Exchange requests on Medi-Cal premium and cost-sharing payments, and it must not charge or require covered insureds to pay those amounts for services already subject to payment by the State Department of Health Care Services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.35. (a) An insurer providing individual coverage in the Exchange shall cooperate with requests from the Exchange to collaborate in the development of, and participate in the implementation of, the Medi-Cal program’s premium and cost-sharing payments under Sections 14102 and 14148.65 of the Welfare and Institutions Code for eligible Exchange insureds. (b) An insurer providing individual coverage in the Exchange shall not charge, bill, ask, or require an insured receiving benefits under Section 14102 or 14148.65 of the Welfare and Institutions Code to make any premium or cost-sharing payments for any services that are subject to premium or cost-sharing payments by the State Department of Health Care Services under Section 14102 or 14148.65 of the Welfare and Institutions Code. (c) For purposes of this section, “Exchange” means the California Health Benefit Exchange established pursuant to Title 22 (commencing with Section 100500) of the Government Code. (Amended by Stats. 2015, Ch. 303, Sec. 368. (AB 731) Effective January 1, 2016.)
  176. 10112.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The commissioner and the Director of the Department of Managed Health Care must review a federal health insurance portal and, if it is not adequate, jointly develop and maintain an electronic clearinghouse.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.4. The commissioner shall, in coordination with the Director of the Department of Managed Health Care, review the Internet portal developed by the United States Secretary of Health and Human Services under subdivision (a) of Section 1103 of the federal Patient Protection and Affordable Care Act (P.L. 111-148) and paragraph (5) of subdivision (c) of Section 1311 of that act, and any enhancements to that portal expected to be implemented by the secretary on or before January 1, 2015. The review shall examine whether the Internet portal provides sufficient information regarding all health benefit products offered by health care service plans and health insurers in the individual and small employer markets in California to facilitate fair and affirmative marketing of all individual and small employer products, particularly outside the California Health Benefit Exchange created under Title 22 (commencing with Section 100500) of the Government Code. If the commissioner and the Director of the Department of Managed Health Care jointly determine that the Internet portal does not adequately achieve those purposes, they shall jointly develop and maintain an electronic clearinghouse to achieve those purposes. In performing this function, the commissioner and the Director of the Department of Managed Health Care shall routinely monitor individual and small employer benefit filings with, and complaints submitted by individuals and small employers to, their respective departments, and shall use any other available means to maintain the clearinghouse. (Amended by Stats. 2011, Ch. 296, Sec. 186. (AB 1023) Effective January 1, 2012.)
  177. 10112.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Most health insurance policies or certificates marketed, issued, or delivered to a California resident must comply with the Insurance Code, and group health insurance must also comply with Section 10121.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.5. (a) (1) Notwithstanding any other provision of law, every policy or certificate of health insurance marketed, issued, or delivered to a resident of this state, regardless of the situs of the contract or master group policyholder, shall be subject to all provisions of this code. (2) (A) Paragraph (1) shall not apply to a policy or certificate of health insurance that is issued outside of California to an employer whose principal place of business and majority of employees are located outside of California. (B) Notwithstanding subparagraph (A), no policy or certificate of health insurance marketed, issued, or delivered to a resident of this state shall discriminate in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex. (3) Nothing in subparagraph (A) of paragraph (2) shall be construed to limit the applicability of any other provision of this code to any policy or certificate of health insurance that is issued outside of California to an employer whose principal place of business and majority of employees are located outside of California. (b) Notwithstanding any other provision of law, every policy or certificate of group health insurance marketed, issued, or delivered to a resident of this state, regardless of the situs of the contract or master group policyholder, shall be subject to Section 10121.7. (Amended by Stats. 2011, Ch. 722, Sec. 3. (SB 757) Effective January 1, 2012.)
  178. 10112.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Certain prescription drug plan sponsors must hold a valid license, and licensed life and disability insurers that operate such plans are subject to this code unless federal law preempts it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.6. (a) Consistent with federal law, a sponsor of a prescription drug plan authorized by the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173) shall hold a valid license as a life and disability insurer issued by the department or as a health care service plan issued by the Department of Managed Health Care. (b) An entity that is licensed as a life and disability insurer and that operates a prescription drug plan shall be subject to the provisions of this code, unless preempted by federal law. (Added by Stats. 2005, Ch. 230, Sec. 2. Effective September 6, 2005.)
  179. 10112.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurance policies meeting the stated timing and coverage conditions must cover emergency services and cannot require prior authorization for them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.7. (a) A group or individual health insurance policy issued, amended, or renewed on or after January 1, 2014, that provides or covers any benefits with respect to services in an emergency department of a hospital shall cover emergency services as follows: (1) Without the need for any prior authorization determination. (2) Whether the health care provider furnishing the services is a participating provider with respect to those services. (3) In a manner so that, if the services are provided to an insured: (A) By a nonparticipating health care provider with or without prior authorization; or (B) (i) The services will be provided without imposing any requirement under the policy for prior authorization of services or any limitation on coverage where the provider of services does not have a contractual relationship with the insurer for the providing of services that is more restrictive than the requirements or limitations that apply to emergency department services received from providers who do have such a contractual relationship with the insurer; and (ii) If the services are provided to an insured out-of-network, the cost-sharing requirement, expressed as a copayment amount or coinsurance rate, is the same requirement that would apply if the services were provided in-network. (b) For the purposes of this section, the term “emergency services” means, with respect to an emergency medical condition: (1) A medical screening examination that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate that emergency medical condition. (2) Within the capabilities of the staff and facilities available at the hospital, further medical examination and treatment as are required under Section 1867(e)(3) of the federal Social Security Act (42 U.S.C. 1395dd(e)(3)) to stabilize the patient. (Added by Stats. 2013, Ch. 316, Sec. 14. (SB 639) Effective January 1, 2014.)
  180. 10112.75.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If a health insurer pays the insured instead of the provider, it must notify both the insured and the provider, and the notices must include specified payment and contact details.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.75. (a) If a health insurer sends payment for services provided directly to the insured and not to the provider, the insurer shall send notice to the insured and the provider who provided the services that the insurer has sent payment to the insured. (b) The notice sent to the insured pursuant to subdivision (a) shall include all of the following: (1) The date the notice was sent and the name and address of the provider who billed for the service. (2) A statement that if the insured has paid the full bill for the service, including both their cost-sharing and the insurer share of cost obligation, the actions described to collect the insurer obligated payment in paragraph (3) do not apply, and that this check is for reimbursement of the consumer for paying the insurer share of cost obligation. (3) Information about action that may be taken if the insured does not send the insurer’s obligated payment to the provider, including all of the following: (A) That an unpaid bill may be sent to collections and the insured may be subject to collections. (B) That the provider or debt collector may pursue litigation against the insured to collect the bill. (C) That the unpaid insurer share of cost obligation may be reported to a credit reporting agency as medical debt if the provider does not receive the payment within 60 days of the notice, or within one year after initial billing for the service, whichever is later. (c) The required notice sent to the provider pursuant to subdivision (a) shall include the date that the notice to the insured was sent and the amount sent to the insured to reimburse the provider. (d) If the provider does not receive the payment from the insured within 60 days of the notice to the insured, or within one year after initial billing for the service, whichever is later, the insurer’s share of cost in possession of the insured that has not been paid to the provider may be reported to a credit reporting agency as medical debt and shall not be considered medical debt for purposes of Sections 1785.13, 1785.20.6, 1785.27, and 1786.18 of the Civil Code if both of the following are true: (1) The entity reporting the information has adequate documentation to substantiate that the insured actually received the funds from the insurer. (2) The insured has not raised a dispute with the insurer, provider, or department as to whether the amount was received. (e) This section does not limit existing requirements under this chapter protecting insureds from balance billing, including Sections 10112.8 and 10126.66. (f) This section does not apply if the direct payment for services provided to the insured is a reimbursement from the insurer because the insured paid the insurer’s share of cost obligation. (Added by Stats. 2024, Ch. 520, Sec. 11. (SB 1061) Effective January 1, 2025.)
  181. 10112.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section limits what an insured can be charged for certain covered services from a noncontracting individual health professional and restricts billing and collections.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.8. (a) (1) Except as provided in subdivision (c), a health insurance policy issued, amended, or renewed on or after July 1, 2017, that provides benefits through contracts with providers at alternative rates of payment pursuant to Section 10133, shall provide that if an insured receives covered services from a contracting health facility at which, or as a result of which, the insured receives services provided by a noncontracting individual health professional, the insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from a contracting individual health professional. This amount shall be referred to as the “in-network cost-sharing amount.” (2) Except as provided in subdivision (c), an insured shall not owe the noncontracting individual health professional more than the in-network cost-sharing amount for services subject to this section. At the time of payment by the insurer to the noncontracting individual health professional, the insurer shall inform the insured and the noncontracting individual health professional of the in-network cost-sharing amount owed by the insured. (3) A noncontracting individual health professional shall not bill or collect any amount from the insured for services subject to this section except the in-network cost-sharing amount. Any communication from the noncontracting individual health professional to the insured prior to the receipt of information about the in-network cost-sharing amount pursuant to paragraph (2) shall include a notice in 12-point bold type stating that the communication is not a bill and informing the insured that the insured shall not pay until they are informed by their insurer of any applicable cost sharing. (4) (A) If the noncontracting individual health professional has received more than the in-network cost-sharing amount from the insured for services subject to this section, the noncontracting individual health professional shall refund any overpayment to the insured within 30 calendar days after receiving payment from the insured. (B) If the noncontracting individual health professional does not refund any overpayment to the insured within 30 calendar days after being informed of the insured’s in-network cost-sharing amount, interest shall accrue at the rate of 15 percent per annum beginning with the date payment was received from the insured. (C) A noncontracting individual health professional shall automatically include in their refund to the insured all interest that has accrued pursuant to this section without requiring the insured to submit a request for the interest amount. (b) Except for services subject to subdivision (c), the following shall apply: (1) Any cost sharing paid by the insured for the services subject to this section shall count toward the limit on annual out-of-pocket expenses established under Section 10112.28. (2) Cost sharing arising from services subject to this section shall be counted toward any deductible in the same manner as cost sharing would be attributed to a contracting individual health professional. (3) The cost sharing paid by the insured pursuant to this section shall satisfy the insured’s obligation to pay cost sharing for the health service and shall constitute “applicable cost sharing owed by the insured.” (c) For services subject to this section, if an insured has an insurance contract that includes coverage for out-of-network benefits, a noncontracting individual health professional may bill or collect from the insured the out-of-network cost sharing, if applicable, only when the insured consents in writing and that written consent demonstrates satisfaction of all the following criteria: (1) At least 24 hours in advance of care, the insured shall consent in writing to receive services from the identified noncontracting individual health professional. (2) The consent shall be obtained by the noncontracting individual health professional in a document that is separate from the document used to obtain the consent for any other part of the care or procedure. The consent shall not be obtained by the facility or any representative of the facility. The consent shall not be obtained at the time of admission or at any time when the enrollee is being prepared for surgery or any other procedure. (3) At the time consent is provided the noncontracting individual health professional shall give the insured a written estimate of the insured’s total out-of-pocket cost of care. The written estimate shall be based on the professional’s billed charges for the service to be provided. The noncontracting individual health professional shall not attempt to collect more than the estimated amount without receiving separate written consent from the insured or the insured’s authorized representative, unless circumstances arise during delivery of services that were unforeseeable at the time the estimate was given that would require the provider to change the estimate. (4) The consent shall advise the insured that they may elect to seek care from a contracted provider or may contact the insured’s insurer in order to arrange to receive the health service from a contracted provider for lower out-of-pocket costs. (5) The consent and estimate shall be provided to the insured in the language spoken by the insured, if the language is a Medi-Cal threshold language, as defined in subdivision (d) of Section 128552 of the Health and Safety Code. (6) The consent shall also advise the insured that any costs incurred as a result of the insured’s use of the out-of-network benefit shall be in addition to in-network cost-sharing amounts and may not count toward the annual out-of-pocket maximum on in-network benefits or a deductible, if any, for in-network benefits. (d) A noncontracting individual health professional who fails to comply with provisions of this subdivision has not obtained written consent for purposes of this section. Under those circumstances, subdivisions (a) and (b) shall apply and subdivision (c) shall not apply. (e) (1) A noncontracting individual health professional may advance to collections only the in-network cost-sharing amount, as determined by the insurer pursuant to subdivision (a) or the out-of-network cost-sharing amount owed pursuant to subdivision (c), that the insured has failed to pay. (2) The noncontracting individual health professional, or any entity acting on their behalf, including any assignee of the debt, shall not do either of the following: (A) Report adverse information to a consumer credit reporting agency. (B) Commence civil action against the insured for a minimum of 150 days after the initial billing regarding amounts owed by the insured under subdivision (a) or (c). (3) With respect to an insured, a noncontracting individual health professional, or any entity acting on their behalf, including any assignee of the debt, shall not use wage garnishments or liens on primary residences as a means of collecting unpaid bills under this section. (f) For purposes of this section and Sections 10112.81 and 10112.82, the following definitions shall apply: (1) “Contracting health facility” means a health facility that is contracted with the insured’s health insurer to provide services under the insured’s policy. A contracting health care facility includes, but is not limited to, the following providers: (A) A licensed hospital. (B) An ambulatory surgery or other outpatient setting, as described in subdivision (a), (d), (e), (g), or (h) of Section 1248.1 of the Health and Safety Code. (C) A laboratory. (D) A radiology or imaging center. (2) “Cost sharing” includes any copayment, coinsurance, or deductible, or any other form of cost sharing paid by the insured other than premium or share of premium. (3) “Individual health professional” means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services. For this purpose, an “individual health professional” shall not include a dentist, licensed pursuant to the Dental Practice Act (Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code). (4) “In-network cost-sharing amount” means an amount no more than the same cost sharing the insured would pay for the same covered service received from a contracting health professional. The in-network cost-sharing amount with respect to an insured with coinsurance shall be based on the amount paid by the insurer pursuant to paragraph (1) of subdivision (a) of Section 10112.82. (5) “Noncontracting individual health professional” means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services and who is not contracted with the insured’s health insurance product. For this purpose, a “noncontracting individual health professional” shall not include a dentist, licensed pursuant to the Dental Practice Act (Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code). Application of this definition is not precluded by a noncontracting individual health professional’s affiliation with a group. (g) This section shall not be construed to require an insurer to cover services not required by law or by the terms and conditions of the health insurance policy. (h) If a health insurer delegates payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, the delegated entity shall comply with this section. (i) This section shall not apply to emergency services and care, as defined in Section 1317.1 of the Health and Safety Code. (Amended by Stats. 2024, Ch. 520, Sec. 12. (SB 1061) Effective January 1, 2025.)
  182. 10112.81.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must set up and run an independent dispute resolution process for certain health insurance claim disputes, and the insurer and professional parties must follow the required internal and appeal steps.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.81. (a) (1) By September 1, 2017, the commissioner shall establish an independent dispute resolution process for the purpose of processing and resolving a claim dispute between a health insurer and a noncontracting individual health professional for services subject to subdivision (a) of Section 10112.8. (2) Prior to initiating the independent dispute resolution process, the parties shall complete the insurer’s internal process. (3) If either the noncontracting individual health professional or the insurer appeals a claim to the department’s independent dispute resolution process, the other party shall participate in the appeal process as described in this section. (b) (1) The commissioner shall establish uniform written procedures for the submission, receipt, processing, and resolution of claim payment disputes pursuant to this section and any other guidelines for implementing this section. These procedures shall include a process for each party to submit into evidence information that will be kept confidential from the other party, in order to preserve the confidentiality of the source contract. (2) The commissioner shall establish reasonable and necessary fees for the purpose of administering this section, to be paid by both parties. (3) In establishing the independent dispute resolution process, the commissioner shall permit the bundling of claims submitted to the same insurer or the same delegated entity for the same or similar services by the same noncontracting individual health professional. (4) The commissioner shall permit a physician group, independent practice association, or other entity authorized to act on behalf of a noncontracting individual health professional to initiate and participate in the independent dispute resolution process. (5) (A) In deciding the dispute, the independent organization shall conduct a de novo review and base its decision regarding the appropriate reimbursement on the information and documents timely submitted into evidence by the parties to the dispute. (B) The independent organization shall assign reviewers to each case based on their relevant education, background, and medical claims payment and clinical experience. (c) (1) The commissioner may contract with one or more independent organizations to conduct the proceedings. The independent organization handling a dispute shall be independent of either party to the dispute. (2) The commissioner shall establish conflict-of-interest standards, consistent with the purposes of this section, that an organization shall meet in order to qualify to administer the independent dispute resolution program. The conflict-of-interest standards shall be consistent with the standards pursuant to subdivisions (c) and (d) of Section 10169.2. (3) The commissioner may contract with the same independent organization or organizations as the State Department of Managed Health Care. (4) The commissioner shall provide, upon the request of an interested person, a copy of all nonproprietary information, as determined by the commissioner, filed with the department by an independent organization seeking to contract with the department to administer the independent dispute resolution process pursuant to this section. The department may charge a nominal fee to cover the costs of providing a copy of the information pursuant to this paragraph. (5) Contracts entered into pursuant to the authority in this subdivision shall be exempt from Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, Section 19130 of the Government Code, and Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of the Government Code and shall be exempt from the review or approval of any division of the Department of General Services. (d) The decision obtained through the commissioner’s independent dispute resolution process shall be binding on both parties. The insurer shall implement the decision obtained through the independent dispute resolution process. If dissatisfied, either party may pursue any right, remedy, or penalty established under any other applicable law. (e) If a health insurer delegates payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, then the delegated entity shall comply with this section. (f) This section shall not apply to emergency services and care, as defined in Section 1317.1 of the Health and Safety Code. (g) The definitions in subdivision (f) of Section 10112.8 shall apply for purposes of this section. (h) This section shall not be construed to alter a health insurer’s obligations pursuant to Section 10123.13. (i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the commissioner may implement, interpret, or make specific this section by issuing guidance, without taking regulatory action, until the time regulations are adopted. (j) By January 1, 2019, the commissioner shall provide a report to the Governor, the President pro Tempore of the Senate, the Speaker of the Assembly, and the Senate and Assembly Committees on Health of the data and information provided in the independent dispute resolution process in a manner and format specified by the Legislature. (Amended by Stats. 2020, Ch. 278, Sec. 2. (AB 2157) Effective January 1, 2021.)
  183. 10112.82.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section sets reimbursement, reporting, methodology, and network-adequacy rules for health insurers dealing with noncontracting individual health professionals.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.82. (a) (1) For services rendered subject to Section 10112.8, effective July 1, 2017, unless otherwise agreed to by the noncontracting individual health professional and the insurer, the insurer shall reimburse the greater of the average contracted rate or 125 percent of the amount Medicare reimburses on a fee-for-service basis for the same or similar services in the general geographic region in which the services were rendered. For the purposes of this section, “average contracted rate” means the average of the contracted commercial rates paid by the health insurer for the same or similar services in the geographic region. This subdivision does not apply to subdivision (c) of Section 10112.8 or subdivision (b) of this section. (2) (A) By July 1, 2017, each health insurer shall provide to the commissioner all of the following: (i) Data listing its average contracted rates for the insurer for services most frequently subject to Section 10112.8 in each geographic region in which the services are rendered for the calendar year 2015. (ii) Its methodology for determining the average contracted rate for the insurer for services subject to Section 10112.8. The methodology to determine an average contracted rate shall ensure that the insurer includes the highest and lowest contracted rates for the calendar year 2015. (iii) The policies and procedures used to determine the average contracted rates under this subdivision. (B) For each calendar year after the health insurer’s initial submission of the average contracted rate as specified in subparagraph (A) and until the standardized methodology under paragraph (3) is specified, a health insurer shall adjust the rate initially established pursuant to this subdivision by the Consumer Price Index for Medical Care Services, as published by the United States Bureau of Labor Statistics. (3) (A) By January 1, 2019, the commissioner shall specify a methodology that insurers shall use to determine the average contracted rates for services most frequently subject to Section 10112.8. This methodology shall take into account, at a minimum, information from the independent dispute resolution process, the specialty of the individual health professional, and the geographic region in which the services are rendered. The methodology to determine an average contracted rate shall ensure that the insurer includes the highest and lowest contracted rates. (B) Insurers shall provide to the commissioner the policies and procedures used to determine the average contracted rates in compliance with subparagraph (A). (C) The average contracted rate data submitted pursuant to this section shall be confidential and not subject to disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (D) In developing the standardized methodology under this subdivision, the commissioner shall consult with interested parties throughout the process of developing the standards, including the Department of Managed Health Care, representatives of health plans, insurers, health care providers, hospitals, consumer advocates, and other stakeholders it deems appropriate. The commissioner shall hold the first stakeholder meeting no later than July 1, 2017. (4) A health insurer shall include in its reports submitted to the commissioner pursuant to Section 10133.5 and regulations adopted pursuant to that section, in a manner specified by the department, the number of payments made to noncontracting individual health professionals for services at a contracting health facility and subject to Section 10112.8, as well as other data sufficient to determine the proportion of noncontracting individual health professionals to contracting individual health professionals at contracting health facilities, as defined in subdivision (f) of Section 10112.8. The commissioner shall include a summary of this information in its January 1, 2019, report required pursuant to subdivision (j) of Section 10112.81 and its findings regarding the impact of the act that added this section on health insurer contracting and network adequacy. (5) A health insurer that provides services subject to Section 10112.8 shall meet the network adequacy requirements set forth in this chapter, including, but not limited to, Section 10133.5 of this code and Sections 2240.1 and 2240.7 of Title 10 of the California Code of Regulations, including, but not limited to, inpatient hospital services and specialist physician services, and if necessary, the commissioner may adopt additional regulations related to those services. This section shall not be construed to limit the commissioner’s authority under this chapter. (6) For the purposes of this section, for average contracted rates for individual and small group coverage, geographic region shall be the geographic regions listed in subparagraph (A) of paragraph (2) of subdivision (a) of Section 10753.14. For purposes of this section for Medicare fee-for-service reimbursement, geographic regions shall be the geographic regions specified for physician reimbursement for Medicare fee-for-service by the United States Department of Health and Human Services. (7) A health insurer shall authorize and permit assignment of the insured’s right, if any, to any reimbursement for health care services covered under the health insurance policy to a noncontracting individual health professional who furnishes the health care services rendered subject to Section 10112.8. Lack of assignment pursuant to this paragraph shall not be construed to limit the applicability of this section, Section 10112.8, or Section 10112.81. (8) A noncontracting individual health professional or health insurer who disputes the claim reimbursement under this section shall utilize the independent dispute resolution process described in Section 10112.81. (b) If nonemergency services are provided by a noncontracting individual health professional consistent with subdivision (c) of Section 10112.8 to an insured who has voluntarily chosen to use the insured’s out-of-network benefit for services covered by an insurer that includes coverage for out-of-network benefits, unless otherwise agreed to by the insurer and the noncontracting individual health professional, the amount paid by the insurer shall be the amount set forth in the insured’s policy. This payment is not subject to the independent dispute resolution process described in Section 10112.81. (c) If a health insurer delegates the responsibility for payment of claims to a contracted entity, including, but not limited to, a medical group or independent practice association, then the entity to which that responsibility is delegated shall comply with the requirements of this section. (d) (1) A payment made by the health insurer to the noncontracting health care professional for nonemergency services as required by Section 10112.8 and this section, in addition to the applicable cost sharing owed by the insured, shall constitute payment in full for nonemergency services rendered unless either party uses the dispute resolution process or other lawful means pursuant to Section 10112.81. (2) Notwithstanding any other law, the amounts paid by an insurer for services under this section shall not constitute the prevailing or customary charges, the usual fees to the general public, or other charges for other payers for an individual health professional. (3) This subdivision shall not preclude the use of the independent dispute resolution process pursuant to Section 10112.81. (e) This section shall not apply to emergency services and care, as defined in Section 1317.1 of the Health and Safety Code. (f) The definitions in subdivision (f) of Section 10112.8 shall apply for purposes of this section. (g) This section shall not be construed to alter a health insurer’s obligations pursuant to Section 10123.13. (Amended by Stats. 2021, Ch. 615, Sec. 308. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  184. 10112.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer issuing health insurance policies or certificates generally may not market, offer, amend, issue, or renew a large group plan contract with a minimum value below 60 percent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.9. (a) (1) Notwithstanding Section 10273.4, an insurer, except an insurer issuing a specialized health insurance policy, issuing a policy or certificate of health insurance, as defined in subdivision (b) of Section 106, shall not market, offer, amend, issue, or renew a large group plan contract that provides a minimum value of less than 60 percent. (2) This section shall not apply to limited wraparound coverage, that is consistent with Section 146.145(b) of Title 45 of the Code of Federal Regulations. This section also shall not apply to a policy that provides coverage of Medicare services pursuant to contracts with the United States government. (3) This section shall not apply to a grandfathered health insurance policy that provides basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code, without annual or lifetime limits for any of the basic health care services. (b) For purposes of this section, a plan shall provide a minimum value of at least 60 percent, as described in Section 36B(c)(2)(C) of the federal Internal Revenue Code and any regulations or guidance adopted under that section. (c) This section shall not apply to an insurer that is subject to the disclosure requirements described in Section 10198.61. (d) For purposes of this section, the following definitions apply: (1) “Large group” means a group that is not a “small employer,” as defined in Section 10753. (2) “Plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. (Added by Stats. 2015, Ch. 617, Sec. 3. (AB 248) Effective January 1, 2016.)
  185. 10112.95.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    During certain emergencies, health insurers must give displaced or affected insureds access to medically necessary care and file a disruption notice within 48 hours; the department may direct additional response measures.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10112.95. (a) A health insurer shall provide an insured who has been displaced or whose health otherwise may be affected by a state of emergency, as declared by the Governor pursuant to Section 8625 of the Government Code, or a health emergency, as declared by the State Public Health Officer pursuant to Section 101080 of the Health and Safety Code, access to medically necessary health care services. (b) Within 48 hours of a declaration by the Governor of a state of emergency or a declaration by the State Public Health Officer of a health emergency that displaces, or has the immediate potential to displace, insureds or health care providers, or that otherwise affects, or may affect, health care providers or the health of insureds, a health insurer operating in the county or counties included in the declaration shall file with the department a notification describing whether the insurer has experienced or expects to experience any disruption to the operation of the insurer, explaining how the insurer is communicating with potentially impacted insureds, and summarizing the actions the insurer has taken or is in the process of taking to ensure that the health care needs of insureds are met. The department may require the insurer to take actions, including, but not limited to, the following: (1) Shorten time limits for health insurers to approve prior authorization, precertification, or referrals, and extend the time that prior authorizations, precertifications, and referrals remain valid. (2) Extend filing deadlines for claims. (3) Suspend prescription refill limitations and allow an impacted insured to refill their prescriptions at an out-of-network pharmacy. (4) Authorize an insured to replace medical equipment or supplies. (5) Allow an insured to access an appropriate out-of-network provider if an in-network provider is unavailable due to the state of emergency or if the insured is out of the area due to displacement. (6) Have a toll-free telephone number that an affected insured may call for answers to questions, including questions about the loss of health insurance identification cards, access to prescription refills, or how to access health care. (c) This section shall not be construed to limit the Governor’s authority under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code), or the commissioner’s authority under any provision of this part. (d) The commissioner may issue guidance to insurers regarding compliance with this section during the first three years following the declaration of emergency, or until the emergency is terminated, whichever occurs first. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (Amended by Stats. 2022, Ch. 421, Sec. 2. (SB 979) Effective January 1, 2023.)
  186. 10113.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Life, disability, and combined life-disability policies issued or delivered in this state on or after January 1, 1936 must be treated as the entire contract, with no outside writings incorporated unless attached or endorsed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113. Every policy of life, disability, or life and disability insurance issued or delivered within this State on or after the first day of January, 1936, by any insurer doing such business within this State shall contain and be deemed to constitute the entire contract between the parties and nothing shall be incorporated therein by reference to any constitution, by-laws, rules, application or other writings, of either of the parties thereto or of any other person, unless the same are indorsed upon or attached to the policy; and all statements purporting to be made by the insured shall, in the absence of fraud, be representations and not warranties. Any waiver of the provisions of this section shall be void. (Added by Stats. 1935, Ch. 245.)
  187. 10113.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines terms used for life settlement rules and says brokers must follow the owner’s instructions and act in the owner’s best interest.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.1. The following provisions shall apply to this act: (a) “Advertisement” means any written, electronic, or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures, and videos, published, disseminated, circulated, or placed before the public, directly or indirectly, for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest, or transfer the death benefit or ownership of a life insurance policy or an interest in a life insurance policy pursuant to a life settlement contract. (b) “Broker” means a person who, on behalf of an owner, and for a fee, commission, or other valuable consideration, offers or attempts to negotiate life settlement contracts between an owner and providers. A broker represents only the owner and owes a fiduciary duty to the owner to act according to the owner’s instructions, and in the best interest of the owner, notwithstanding the manner in which the broker is compensated. A broker does not include an attorney, certified public accountant, or financial planner retained in the type of practice customarily performed in his or her professional capacity to represent the owner whose compensation is not paid directly or indirectly by the provider or any other person, except the owner. (c) “Business of life settlements” means an activity involved in, but not limited to, offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring, or tracking of life settlement contracts. (d) “Commissioner” means the Insurance Commissioner. (e) “Financing entity” means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a provider, credit enhancer, or any entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, as to which both of the following apply: (1) It is an entity whose principal activity related to the transaction is providing funds to effect the life settlement contract or purchase of one or more policies. (2) It is an entity that has an agreement in writing with one or more providers to finance the acquisition of life settlement contracts. (f) “Financing transaction” means a transaction in which a licensed provider obtains financing from a financing entity, including, without limitation, any secured or unsecured financing, any securitization transaction, or any securities offering which either is registered or exempt from registration under federal and state securities law. (g) “Fraudulent life settlement act” includes all of the following: (1) Acts or omissions committed by any person that, for the purpose of depriving another of property or for pecuniary gain, commits or permits its employees or its agents to engage in acts, including, but not limited to, the following: (A) Presenting, causing to be presented, or preparing with knowledge and belief that it will be presented to or by a provider, premium finance lender, broker, insurer, insurance producer, or any other person, false material information, or concealing material information, as part of, in support of, or concerning a fact material to one or more of the following: (i) An application for the issuance of a life settlement contract or insurance policy. (ii) The underwriting of a life settlement contract or insurance policy. (iii) A claim for payment or benefit pursuant to a life settlement contract or insurance policy. (iv) Premiums paid on an insurance policy. (v) Payments and changes in ownership or beneficiary made in accordance with the terms of a life settlement contract or insurance policy. (vi) The reinstatement or conversion of an insurance policy. (vii) The solicitation, offer to enter into, or effectuation of, a life settlement contract or insurance policy. (viii) The issuance of written evidence of life settlement contracts or insurance. (ix) Any application for, or the existence of or any payments related to, a loan secured directly or indirectly by any interest in a life insurance policy. (B) Entering into stranger-originated life insurance (STOLI). (C) Employing any device, scheme, or artifice to defraud in the business of life settlements. (2) Any of the following that any person does, or permits his or her employees or agents to do, in the furtherance of a fraud, or to prevent the detection of a fraud: (A) Remove, conceal, alter, destroy, or sequester from the commissioner the assets or records of a licensee or other person engaged in the business of life settlements. (B) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer, or other person. (C) Transact the business of life settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of life settlements. (D) File with the commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise concealing information about a material fact from the commissioner. (E) Engage in embezzlement, theft, misappropriation, or conversion of moneys, funds, premiums, credits, or other property of a provider, insurer, insured, owner, insurance policyowner, or any other person engaged in the business of life settlements or insurance. (F) Enter into, broker, or otherwise deal in a life settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information requested concerning any fact material to the policy, where the owner or the owner’s agent intended to defraud the policy’s issuer. (G) Attempt to commit, assist, aid, or abet in the commission of, or conspiracy to commit the acts or omissions specified in this subdivision. (H) Misrepresent the state of residence of an owner to be a state or jurisdiction that does not have a law substantially similar to this act for the purpose of evading or avoiding the provisions of this act. (h) “Insured” means the person covered under the policy being considered for sale in a life settlement contract. (i) “Life expectancy” means the arithmetic mean of the number of months the insured under the life insurance policy to be settled can be expected to live considering medical records and appropriate experiential data. (j) “Life insurance producer” means any person licensed in this state as a resident or nonresident insurance agent who has received qualification or authority for life insurance coverage or a life line of coverage pursuant to Chapter 5 (commencing with Section 1621) of Part 2 of Division 1. (k) “Life settlement contract” means a written agreement solicited, negotiated, or entered into in this state between a provider and an owner, establishing the terms under which compensation or any thing of value will be paid, which compensation or thing of value is less than the expected death benefit of the insurance policy or certificate, in return for the owner’s assignment, transfer, sale, devise, or bequest of the death benefit or any portion of an insurance policy or certificate of insurance for compensation, provided, however, that the minimum value for a life settlement contract shall be greater than a cash surrender value or accelerated death benefit available at the time of an application for a life settlement contract. “Life settlement contract” also includes the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns such policy if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more life insurance contracts, which life insurance contract is owned by a person residing in this state. (1) A “life settlement contract” includes a premium finance loan made for a policy on or before the date of issuance of the policy where one or more of the following conditions apply: (A) The loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing. (B) The owner receives on the date of the premium finance loan a guarantee of the future life settlement value of the policy. (C) The owner agrees on the date of the premium finance loan to sell the policy or any portion of the policy’s death benefit on any date following the issuance of the policy, not including an agreement to sell the policy in the event of a default, provided that the default is not pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this act. (2) “Life settlement contract” does not include any of the following: (A) A policy loan by a life insurance company pursuant to the terms of the life insurance policy or accelerated death provisions contained in the life insurance policy, whether issued with the original policy or as a rider. (B) A premium finance loan, as defined herein, or any loan made by a bank or other licensed financial institution, provided that neither default on the loan nor the transfer of the policy in connection with the default is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this act. (C) A collateral assignment of a life insurance policy by an owner. (D) A loan made by a lender that does not violate Article 5.8 (commencing with Section 778) of Chapter 1 of Part 2, provided the loan is not described in paragraph (1), and is not otherwise within the definition of life settlement contract. (E) An agreement where all of the parties satisfy one of the following conditions: (i) They are closely related to the insured by blood or law. (ii) They have a lawful substantial economic interest in the continued life, health, and bodily safety of the person insured. (iii) They are trusts established primarily for the benefit of those parties. (F) Any designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or by a trust established by the employer of life insurance on the life of the employee. (G) A bona fide business succession planning arrangement: (i) Between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by its shareholders. (ii) Between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by its partners. (iii) Between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by its members. (H) An agreement entered into by a service recipient, or a trust established by the service recipient, and a service provider, or a trust established by the service provider, who performs significant services for the service recipient’s trade or business. (I) Any other contract, transaction, or arrangement from the definition of “life settlement contract” that the commissioner determines is not of the type intended to be regulated by this act. (l) “Net death benefit” means the amount of the life insurance policy or certificate to be settled less any outstanding debts or liens. (m) “Owner” means the owner of a life insurance policy or a certificate holder under a group policy, with or without a terminal illness, who enters or seeks to enter into a life settlement contract. For the purposes of this article, an owner shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy that insures the life of an individual with a terminal illness or condition except where specifically addressed. The term “owner” does not include any of the following: (1) Any provider or other licensee under this act. (2) A qualified institutional buyer as defined in Rule 144A of the federal Securities Act of 1933, as amended. (3) A financing entity. (4) A special purpose entity. (5) A related provider trust. (n) “Patient identifying information” means an insured’s address, telephone number, facsimile number, electronic mail address, photograph or likeness, employer, employment status, social security number, or any other information that is likely to lead to the identification of the insured. (o) “Person” means any natural person or legal entity, including, but not limited to, a partnership, limited liability company, association, trust, or corporation. (p) “Policy” means an individual or group policy, group certificate, contract, or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state. (q) “Premium finance loan” is a loan made primarily for the purpose of making premium payments on a life insurance policy, which loan is secured by an interest in such life insurance policy. (r) “Provider” means a person, other than an owner, who enters into or effectuates a life settlement contract with an owner. A provider does not include any of the following: (1) Any bank, savings bank, savings and loan association, or credit union. (2) A licensed lending institution or creditor or secured party pursuant to a premium finance loan agreement which takes an assignment of a life insurance policy or certificate issued pursuant to a group life insurance policy as collateral for a loan. (3) The insurer of a life insurance policy or rider to the extent of providing accelerated death benefits or riders or cash surrender value. (4) A purchaser. (5) Any authorized or eligible insurer that provides stop loss coverage to a provider, purchaser, financing entity, special purpose entity, or related provider trust. (6) A financing entity. (7) A related provider trust. (8) A broker. (9) An accredited investor or qualified institutional buyer as defined respectively in Regulation D, Rule 501 or Rule 144A of the federal Securities Act of 1933, as amended, who purchases a life settlement policy from a provider. (s) “Purchaser” means a person who pays compensation or anything of value as consideration for a beneficial interest in a trust which is vested with, or for the assignment, transfer, or sale of, an ownership or other interest in a life insurance policy or a certificate issued pursuant to a group life insurance policy which has been the subject of a life settlement contract. (t) “Related provider trust” means a titling trust or other trust established by a licensed provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. In order to qualify as a related provider trust, the trust must have a written agreement with the licensed provider under which the licensed provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files relating to life settlement transactions available to the Department of Insurance as if those records and files were maintained directly by the licensed provider. (u) “Settled policy” means a life insurance policy or certificate that has been acquired by a provider pursuant to a life settlement contract. (v) “Special purpose entity” means a corporation, partnership, trust, limited liability company, or other legal entity whose securities pay a fixed rate of return commensurate with established asset-backed capital markets, or has been formed solely to provide either directly or indirectly access to institutional capital markets: (1) For a financing entity or provider. (2) In connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by a “qualified institutional buyer” as defined in Rule 144 promulgated under the federal Securities Act of 1933, as amended. (w) “Stranger-originated life insurance” or “STOLI” is an act, practice, or arrangement to initiate the issuance of a life insurance policy in this state for the benefit of a third-party investor who, at the time of policy origination, has no insurable interest, under the laws of this state, in the life of the insured. STOLI practices include, but are not limited to, cases in which life insurance is purchased with resources or guarantees from or through a person or entity, that, at the time of policy inception, could not lawfully initiate the policy himself, herself, or itself, and where, at the time of inception, there is an arrangement or agreement, to directly or indirectly transfer the ownership of the policy or the policy benefits to a third party. Trusts that are created to give the appearance of insurable interest and that are used to initiate policies for investors violate insurable interest laws and the prohibition against wagering on life. STOLI arrangements do not include lawful life settlement contracts as permitted by the act that added this section or those practices set forth in paragraph (2) of subdivision (k), provided that they are not for the purpose of evading regulation under this act. (x) “Terminally ill” means having an illness or sickness that can reasonably be expected to result in death in 24 months or less. (y) “This act” shall refer to the act in the 2009–10 Regular Session that added Sections 10113.1 to 10113.35, inclusive, and as it may from time to time be amended. (Repealed and added by Stats. 2009, Ch. 343, Sec. 3. (SB 98) Effective January 1, 2010.)
  188. 10113.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section regulates life settlement licensing, disclosures, confidentiality, and enforcement.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.2. (a) This section applies to any person entering into, brokering, or soliciting life settlements pursuant to this section and Sections 10113.1 and 10113.3. (b) (1) Except as provided in subparagraph (B) or (D), a person may not enter into, broker, or solicit life settlements pursuant to Section 10113.1 unless that person has been licensed by the commissioner under this section. The person shall file an application for a license in the form prescribed by the commissioner, and the application shall be accompanied by a fee of one hundred seventy-one dollars ($171). The annual license renewal fee shall be one hundred seventy-one dollars ($171). The applicant shall provide any information the commissioner may require. The commissioner may issue a license, or deny the application if, in the commissioner’s discretion, it is determined that it is contrary to the interests of the public to issue a license to the applicant. The reasons for a denial shall be set forth in writing. (A) An individual acting as a broker under this section shall complete at least 15 hours of continuing education related to life settlements and life settlement transactions, as required and approved by the commissioner, prior to operating as a broker. This requirement shall not apply to a life insurance producer who qualifies under subparagraph (D). (B) A person licensed as an attorney, certified public accountant, or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the owner, and whose compensation is not paid directly or indirectly by the provider or purchaser, may negotiate a life settlement contract on behalf of the owner without having to obtain a license as a broker. (C) A person licensed to act as a viatical settlement broker or provider as of December 31, 2009, shall be deemed qualified for licensure as a life settlement broker or provider, and shall be subject to all the provisions of this article as if the person were originally licensed as a life settlement broker or provider. (D) (i) A life insurance producer who has been duly licensed as a life agent for at least one year or as a licensed nonresident producer in this state for one year shall be deemed to meet the licensing requirements of this section and shall be permitted to operate as a broker. (ii) Not later than 10 days from the first day of operating as a broker, the life insurance producer shall notify the commissioner that the life insurance producer is acting as a broker, on a form prescribed by the commissioner, and shall pay a fee of eighty-five dollars ($85). (iii) The fee shall be paid by the life insurance producer for each license term the producer intends to operate as a broker. The fee shall be calculated pursuant to Section 1750. The notification to the commissioner shall include an acknowledgment by the life insurance producer that the life insurance producer will operate as a broker in accordance with this act. (iv) The insurer that issued the policy that is the subject of a life settlement contract shall not be responsible for any act or omission of a broker or provider arising out of, or in connection with, the life settlement transaction, unless the insurer receives compensation for the replacement of the life settlement contract for the provider or broker. (E) The commissioner shall review the examination for the licensing of life insurance agents and may recommend any changes to the examination to the department’s curriculum committee in order to carry out the purposes of this section and Sections 10113.1 and 10113.3. (2) Except as provided in subparagraphs (A) and (B), whenever it appears to the commissioner that it is contrary to the interests of the public for a person licensed pursuant to this section to continue to transact life settlements business, the commissioner or their designee shall issue a notice to the licensee stating the reasons therefor. If, after a hearing, the commissioner concludes that it is contrary to the interests of the public for the licensee to continue to transact life settlements business, the commissioner may revoke the person’s license, or issue an order suspending the license for a period as determined by the commissioner. Any hearing conducted pursuant to this paragraph shall be in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, except that the hearing may be conducted by administrative law judges chosen pursuant to Section 11502 or appointed by the commissioner, and the commissioner shall have the powers granted therein. (A) The commissioner may, without hearing, suspend or revoke the license of a broker, as defined in subdivision (b) of Section 10113.1, if the broker has done one or more of the following: (i) Been convicted of a felony. (ii) Been convicted of a misdemeanor specified by this code or by other laws regulating insurance. (iii) Had a previously issued professional, occupational, or vocational license suspended or revoked for cause by a licensing authority within the preceding five years of the commissioner’s action on grounds that would preclude the granting of a license by the commissioner under this section. (B) A judgment, plea, or verdict of guilty, or a plea of nolo contendere is deemed to be a conviction within the meaning of subparagraph (A). If the commissioner issues an order based on a plea that does not at any time result in a judgment of conviction, the commissioner shall vacate the order upon petition by the broker. (3) Each licensee shall owe and pay in advance to the commissioner an annual renewal fee in an amount to be determined by the commissioner pursuant to paragraph (1) of subdivision (b). This fee shall be for each license year, as defined by Section 1629. (4) Any licensee that intends to discontinue transacting life settlements in this state shall so notify the commissioner, and shall surrender its license. (c) A life settlements licensee shall file with the department a copy of all life settlement forms used in this state. A licensee may not use any life settlement form in this state unless it has been provided in advance to the commissioner. The commissioner may disapprove a life settlement form if, in the commissioner’s discretion, the form, or provisions contained therein, are contrary to the interests of the public, or otherwise misleading or unfair to the consumer. In the case of disapproval, the licensee may, within 15 days of notice of the disapproval, request a hearing before the commissioner or the commissioner’s designee, and the hearing shall be held within 30 days of the request. (d) Life settlements licensees shall be required to provide any applicant for a life settlement contract, at the time of application for the life settlement contract, all of the following disclosures in writing and signed by the owner, in at least 12-point type: (1) That there are possible alternatives to life settlements, including, but not limited to, accelerated benefits options that may be offered by the life insurer. (2) The fact that some or all of the proceeds of a life settlement may be taxable and that assistance should be sought from a professional tax adviser. (3) Consequences for interruption of public assistance as provided by information provided by the State Department of Health Care Services and the State Department of Social Services under Section 11022 of the Welfare and Institutions Code. (4) That the proceeds from a life settlement could be subject to the claims of creditors. (5) That entering into a life settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate of a group policy to be forfeited by the owner and that assistance should be sought from a professional financial adviser. (6) That a change in ownership of the settled policy could limit the insured’s ability to purchase insurance in the future on the insured’s life because there is a limit to how much coverage insurers will issue on one life. (7) That the owner has a right to rescind a life settlement contract within 30 days of the date it is executed by all parties and the owner has received all required disclosures, or 15 days from receipt by the owner of the proceeds of the settlement, whichever is sooner. Rescission, if exercised by the owner, is effective only if both notice of rescission is given and the owner repays all proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner’s estate of all proceeds and any premiums, loans, and loan interest to the provider. (8) That proceeds will be sent to the owner within three business days after the provider has received the insurer or group administrator’s acknowledgment that ownership of the policy or the interest in the certificate has been transferred and the beneficiary has been designated in accordance with the terms of the life settlement contract. (9) The date by which the funds will be available to the owner and the transmitter of the funds. (10) The disclosure document shall include the following language: “All medical, financial, or personal information solicited or obtained by a provider or broker about an insured, including the insured’s identity or the identity of family members, a spouse, or a significant other may be disclosed as necessary to effect the life settlement contract between the owner and provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years.” (11) That the insured may be contacted by either the provider or the broker or its authorized representative for the purpose of determining the insured’s health status or to verify the insured’s address. This contact is limited to once every three months if the insured has a life expectancy of more than one year, and no more than once per month if the insured has a life expectancy of one year or less. (12) Any affiliations or contractual relations between the provider and the broker, and the affiliation, if any, between the provider and the issuer of the policy to be settled. (13) That a broker represents exclusively the owner, and not the insurer or the provider or any other person, and owes a fiduciary duty to the owner, including a duty to act according to the owner’s instructions and in the best interest of the owner. (14) The name, business address, and telephone number of the broker. (e) Prior to the execution of the life settlement contract by all parties, the life settlement provider entering into a life settlement contract with the owner shall provide, in a document signed by the owner, the gross purchase price the life settlement provider is paying for the policy, the amount of the purchase price to be paid to the owner, the amount of the purchase price to be paid to the owner’s life settlement broker, and the name, business address, and telephone number of the life settlement broker. For purposes of this section, “gross purchase price” means the total amount or value paid by the provider for the purchase of one or more life insurance policies, including commissions and fees. (f) The broker shall provide the owner and the insured with at least all of the following disclosures in writing prior to the signing of the life settlement contract by all parties. The disclosures shall be clearly displayed in the life settlement contract or in a separate document signed by the owner: (1) The name, business address, and telephone number of the broker. (2) A full, complete, and accurate description of all of the offers, counteroffers, acceptances, and rejections relating to the proposed life settlement contract. (3) A disclosure of any affiliations or contractual arrangements between the broker and any person making an offer in connection with the proposed life settlement contract. (4) All estimates of the life expectancy of the insured that are obtained by the licensee in connection with the life settlement, unless that disclosure would violate any California or federal privacy laws. (5) The commissioner may consider any failure to provide the disclosures or rights described in this section as a basis for suspending or revoking a broker’s or provider’s license pursuant to paragraph (2) of subdivision (b). (g) All medical information solicited or obtained by any person soliciting or entering into a life settlement is subject to Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1, concerning confidentiality of medical information. (h) Except as otherwise allowed or required by law, a provider, broker, insurance company, insurance producer, information bureau, rating agency, or company, or any other person with actual knowledge of an insured’s identity, shall not disclose the identity of an insured or information that there is a reasonable basis to believe that could be used to identify the insured or the insured’s financial or medical information to any other person unless the disclosure is one of the following: (1) It is necessary to effect a life settlement contract between the owner and a provider and the owner and insured have provided prior written consent to the disclosure. (2) It is necessary to effectuate the sale of life settlement contracts, or interests therein, as investments, provided the sale is conducted in accordance with applicable state and federal securities law and provided further that the owner and the insured have both provided prior written consent to the disclosure. (3) It is provided in response to an investigation or examination by the commissioner or any other governmental officer or agency or any other provision of law. (4) It is a term or condition to the transfer of a policy by one provider to another provider, in which case the receiving provider shall be required to comply with the confidentiality requirements of Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1. (5) It is necessary to allow the provider or broker or their authorized representatives to make contacts for the purpose of determining health status. For the purposes of this section, the term “authorized representative” shall not include any person who has or may have any financial interest in the settlement contract other than a provider, licensed broker; further, a provider or broker shall require its authorized representative to agree in writing to adhere to the privacy provisions of this act. (6) It is required to purchase stop loss coverage. (i) In addition to other questions an insurance carrier may lawfully pose to a life insurance applicant, insurance carriers may inquire in the application for insurance whether the proposed owner intends to pay premiums with the assistance of financing from a lender that will use the policy as collateral to support the financing. (1) If the premium finance loan provides funds that can be used for a purpose other than paying for the premiums, costs, and expenses associated with obtaining and maintaining the life insurance policy and loan, the application may be rejected as a prohibited practice under this act. (2) If the financing does not violate paragraph (1), the existence of premium financing may not be the sole criterion employed by an insurer in a decision whether to reject an application for life insurance. The insurance carrier may make disclosures to the applicant, either on the application or an amendment to the application to be completed no later than the delivery of the policy, including, but not limited to, the following: “If you have entered into a loan arrangement where the policy is used as collateral, and the policy changes ownership at some point in the future in satisfaction of the loan, the following may be true: (A) A change of ownership could lead to a stranger owning an interest in the insured’s life. (B) A change of ownership could in the future limit your ability to purchase insurance on the insured’s life because there is a limit to how much coverage insurers will issue on a life. (C) You should consult a professional adviser since a change in ownership in satisfaction of the loan may result in tax consequences to the owner, depending on the structure of the loan.” (3) In addition to the disclosures in paragraph (2), the insurance carrier may require the following certifications from the applicant or the insured: “(A) I have not entered into any agreement or arrangement under which I have agreed to make a future sale of this life insurance policy. (B) My loan arrangement for this policy provides funds sufficient to pay for some or all of the premiums, costs, and expenses associated with obtaining and maintaining my life insurance policy, but I have not entered into any agreement by which I am to receive consideration in exchange for procuring this policy. (C) The borrower has an insurable interest in the insured.” (j) Life insurers shall provide individual life insurance policyholders with a statement informing them that if they are considering making changes in the status of their policy, they should consult with a licensed insurance or financial adviser. The statement may accompany or be included in notices or mailings otherwise provided to the policyholders. (k) The commissioner may, whenever the commissioner deems it reasonably necessary to protect the interests of the public, examine the business and affairs of any licensee or applicant for a license. The commissioner shall have the authority to order any licensee or applicant to produce any records, books, files, or other information as is reasonably necessary to ascertain whether or not the licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant. (l) The commissioner may investigate the conduct of any licensee, its officers, employees, agents, or any other person involved in the business of the licensee, or any applicant for a license, whenever the commissioner has reason to believe that the licensee or applicant for a license may have acted, or may be acting, in violation of the law, or otherwise contrary to the interests of the public. The commissioner may initiate an investigation on the commissioner’s own initiative, or upon a complaint filed by any other person. (m) The commissioner may issue orders to licensees whenever the commissioner determines that it is reasonably necessary to ensure or obtain compliance with this section, or Section 10113.3. This authority includes, but is not limited to, orders directing a licensee to cease and desist in any practice that is in violation of this section, or Section 10113.3, or otherwise contrary to the interests of the public. Any licensee to which an order pursuant to this subdivision is issued may, within 15 days of receipt of that order, request a hearing at which the licensee may challenge the order. (n) The commissioner may, after notice and a hearing at which it is determined that a licensee has violated this section or Section 10113.3 or any order issued pursuant to this section, order the licensee to pay a monetary penalty of up to ten thousand dollars ($10,000), which may be recovered in a civil action. Any hearing conducted pursuant to this subdivision shall be in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, except that the hearing may be conducted by administrative law judges chosen pursuant to Section 11502 or appointed by the commissioner, and the commissioner shall have the powers granted therein. (o) Each licensed provider shall file with the commissioner on or before March 1 of each year an annual statement in the form prescribed by the commissioner. The information that the commissioner may require in the annual statement shall include, but not be limited to, the total number, aggregate face amount, and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year. The annual statement shall also include the names of the insurance companies whose policies have been settled and the brokers that have settled those policies, and that information shall be received in confidence within the meaning of Section 7929.000 of the Government Code and exempt from disclosure pursuant to the Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). The annual statement shall not include individual transaction data regarding the business of life settlements or information that there is a reasonable basis to believe could be used to identify the owner or the insured. (p) A person who is not a resident of California may not receive or maintain a license unless a written designation of an agent for service of process is filed and maintained with the commissioner. The provisions of Article 3 (commencing with Section 1600) of Chapter 4 of Part 2 of Division 1 shall apply to life settlements licensees as if they were foreign insurers, their license a certificate of authority, and the life settlements a policy, and the commissioner may modify the agreement set forth in Section 1604 accordingly. (q) A person licensed pursuant to this section shall not engage in any false or misleading advertising, solicitation, or practice. In no case shall a broker or provider, directly or indirectly, market, advertise, solicit, or otherwise promote the purchase of a new policy for the sole purpose of or with a primary emphasis on settling the policy or use the words “free,” “no cost,” or words of similar import in the marketing, advertising, soliciting, or otherwise promoting of the purchase of a policy. The provisions of Article 6 (commencing with Section 780) and Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1 shall apply to life settlements licensees as if they were insurers, their license a certificate of authority or producer’s license, and the life settlements a policy, and the commissioner shall liberally construe these provisions so as to protect the interests of the public. (r) Any person who enters into a life settlement with a life settlements licensee shall have the absolute right to rescind the settlement within 30 days of the date it is executed by all parties and the owner has received all required disclosures, or 15 days from receipt by the owner of the proceeds of the settlement, whichever is sooner, and any waiver or settlement language contrary to this subdivision shall be void. Rescission, if exercised by the owner, is effective only if both notice of rescission is given and the owner repays all proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner’s estate of all proceeds and any premiums, loans, and loan interest to the provider. (s) Records of all consummated transactions and life settlement contracts shall be maintained by the provider for three years after the death of the insured and shall be available to the commissioner for inspection during reasonable business hours. (t) A violation of this section is a misdemeanor. (Amended by Stats. 2023, Ch. 204, Sec. 14. (AB 1140) Effective January 1, 2024.)
  189. 10113.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    This section sets rules for life settlement contracts, including required documents, notice, escrow timing, rescission rights, and limits on early settlements and fraudulent conduct.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.3. (a) A provider entering into a life settlement contract with any owner of a policy, wherein the insured is terminally ill, shall first obtain the following: (1) If the owner is the insured, a written statement from a licensed attending physician that the owner is of sound mind and under no constraint or undue influence to enter into a settlement contract. (2) A document in which the insured consents to the release of his or her medical records to a provider, settlement broker, or insurance producer and, if the policy was issued less than two years from the date of application for a settlement contract, to the insurance company that issued the policy. (b) The insurer shall respond to a request for verification of coverage submitted by a provider, settlement broker, or life insurance producer not later than 30 calendar days of the date the request is received. The request for verification of coverage must be made on a form approved by the commissioner. The insurer shall complete and issue the verification of coverage or indicate in which respects it is unable to respond. In its response, the insurer shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract. (c) Before or at the time of execution of the settlement contract, the provider shall obtain a witnessed document in which the owner consents to the settlement contract, represents that the owner has a full and complete understanding of the settlement contract and a full and complete understanding of the benefits of the policy, acknowledges that the owner is entering into the settlement contract freely and voluntarily, and, for persons with a terminal illness or condition, acknowledges that the insured has a terminal illness and that the terminal illness or condition was diagnosed after the policy was issued. (d) The insurer shall not unreasonably delay effecting change of ownership or beneficiary with any life settlement contract lawfully entered into in this state or with a resident of this state. (e) If a settlement broker or life insurance producer performs any of these activities required of the provider, the provider is deemed to have fulfilled the requirements of this section. (f) If a broker performs those verification of coverage activities required of the provider, the provider is deemed to have fulfilled the requirements of this section. (g) Within 20 days after an owner executes the life settlement contract, the provider shall give written notice to the insurer that issued that insurance policy that the policy has become subject to a life settlement contract. The notice shall be accompanied by the documents required by subdivision (d) of Section 10113.2. (h) All medical information solicited or obtained by any licensee shall be subject to the applicable provision of state law relating to confidentiality of medical information, if not otherwise provided in this act. (i) All life settlement contracts entered into in this state shall provide that the owner may rescind the contract on or before 30 days after the date it is executed by all parties thereto, and the owner has received all required disclosures, or 15 days from receipt by the owner of the full payment of the proceeds as specified below, whichever is sooner. Rescission, if exercised by the owner, is effective only if both notice of the rescission is given, and the owner repays all proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner’s estate of all proceeds and any premiums, loans, and loan interest to the provider. (j) Within three business days after receipt from the owner of documents to effect the transfer of the insurance policy, the provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a state or federally chartered financial institution pending acknowledgment of the transfer by the issuer of the policy. The trustee or escrow agent shall be required to transfer the proceeds due to the owner within three business days of acknowledgment of the transfer from the insurer. (k) Failure to tender the life settlement contract proceeds to the owner by the date disclosed to the owner renders the contract voidable by the owner for lack of consideration until the time the proceeds are tendered to and accepted by the owner. A failure to give written notice of the right of rescission hereunder shall toll the right of rescission until 30 days after the written notice of the right of rescission has been given. (l) Any fee paid by a provider, party, individual, or an owner to a broker in exchange for services provided to the owner pertaining to a life settlement contract shall be computed as a percentage of the offer obtained, not the face value of the policy. Nothing in this section shall be construed as prohibiting a broker from reducing the broker’s fee below this percentage if the broker so chooses. (m) No person at any time prior to, or at the time of, the application for, or issuance of, a policy, or during a two-year period commencing with the date of issuance of the policy, shall enter into a life settlement regardless of the date the compensation is to be provided and regardless of the date the assignment, transfer, sale, devise, bequest, or surrender of the policy is to occur. (1) This prohibition shall not apply if the owner certifies to the provider that the policy was issued upon the owner’s exercise of conversion rights arising out of a group or individual policy, provided the total of the time covered under the conversion policy plus the time covered under the prior policy is at least 24 months. The time covered under a group policy must be calculated without regard to a change in insurance carriers, provided the coverage has been continuous and under the same group sponsorship. (2) This prohibition shall not apply if the owner submits independent evidence to the provider that one or more of the following conditions have been met within the two-year period: (A) The owner or insured is terminally ill. (B) The owner or insured disposes of his or her ownership interests in a closely held corporation, pursuant to the terms of a buyout or other similar agreement in effect at the time the insurance policy was initially issued. (C) The owner’s spouse dies. (D) The owner divorces his or her spouse. (E) The owner retires from full-time employment. (F) The owner becomes physically or mentally disabled and a physician determines that the disability prevents the owner from maintaining full-time employment. (G) A final order, judgment, or decree is entered by a court of competent jurisdiction, on the application of a creditor of the owner, adjudicating the owner bankrupt or insolvent, or approving a petition seeking reorganization of the owner or appointing a receiver, trustee, or liquidator to all or a substantial part of the owner’s assets. (3) (A) Copies of the independent evidence required by paragraph (2) shall be submitted to the insurer when the provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the provider that the copies are true and correct copies of the documents received by the provider. Nothing in this section shall prohibit an insurer from exercising its right to contest the validity of any policy. (B) If the provider submits to the insurer a copy of independent evidence provided for in subparagraph (A) of paragraph (2) when the provider submits a request to the insurer to effect the transfer of the policy to the provider, the copy shall be deemed to establish that the settlement contract satisfies the requirements of this section. (4) This prohibition shall apply only to policies issued on or after the effective date of this section. (n) An insurer shall not: (1) Engage in any transaction, act, or practice that restricts, limits, or impairs the lawful transfer of ownership, change of beneficiary, or assignment of a policy. (2) Make any false or misleading statement for the purpose of dissuading an owner or insured from a lawful life settlement contract. (o) No person providing premium financing shall receive any proceeds, fees, or other consideration from the policy or owner of the policy that are in addition to the amounts required to pay principal, interest, and any reasonable costs or expenses incurred by the lender or borrower in connection with the premium finance agreement, except for the event of a default, unless either the default on the loan or transfer of the policy occurs pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this act. (p) If there is more than one owner on a single policy, and the owners are residents of different states, the life settlement contract shall be governed by the law of the state in which the owner having the largest percentage ownership resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all of the owners. The law of the state of the insured shall govern in the event that equal owners fail to agree in writing upon a state of residence for jurisdictional purposes. (q) A provider from this state who enters into a life settlement contract with an owner who is a resident of another state that has enacted statutes or adopted regulations governing life settlement contracts shall be governed in the effectuation of that life settlement contract by the statutes and regulations of the owner’s state of residence. If the state in which the owner is a resident has not enacted statutes or regulations governing life settlement contracts, the provider shall give the owner notice that neither state regulates the transaction upon which he or she is entering. For transactions in those states, however, the provider is to maintain all records required if the transactions were executed in the state of residence. The forms used in those states need not be approved by the department. (r) If there is a conflict in the laws that apply to an owner and a purchaser in any individual transaction, the laws of the state that apply to the owner shall take precedence and the provider shall comply with those laws. (s) It is a fraudulent life settlement act and a violation of this section for any person to do any of the following, or any of the acts listed in subdivision (g) of Section 10113.1: (1) Enter into a life settlement contract if a person knows or reasonably should have known that the life insurance policy was obtained by means of a false, deceptive, or misleading application for the policy. (2) Engage in any transaction, practice, or course of business if a person knows or reasonably should have known that the intent was to avoid the notice requirements of this section. (3) Engage in any fraudulent act or practice in connection with any transaction relating to any settlement involving an owner who is a resident of this state. (4) Fail to provide the disclosures or file the required reports with the commissioner as required by this act. (5) Issue, solicit, or market, the purchase of a new life insurance policy for the purpose of, or with a primary emphasis on, settling the policy. (6) Enter into a premium finance agreement with any person or agency, or any person affiliated with a person or agency that is prohibited under subdivision (o). (7) With respect to any settlement contract or insurance policy and a broker, knowingly solicit an offer from, effectuate a life settlement contract with, or make a sale to any provider, financing entity, or related provider trust that is controlling, controlled by, or under common control with a broker, unless the relationship has been fully disclosed to the owner. (8) With respect to any life settlement contract or insurance policy and a provider, knowingly enter into a life settlement contract with an owner, if, in connection with a life settlement contract, anything of value will be paid to a broker that is controlling, controlled by, or under common control with a provider or the financing entity, or related provider trust that is involved in a settlement contract, unless the relationship has been fully disclosed to the owner. (9) With respect to a provider, enter into a life settlement contract unless the life settlement promotional, advertising, and marketing materials, as may be prescribed by regulation, have been filed with the commissioner. In no event shall any marketing materials expressly reference that the insurance is “free” for any period of time. The inclusion of any reference in the marketing materials that would cause an owner to reasonably believe that the insurance is free for any period of time shall be considered a violation of this act; or with respect to any life insurance producer, insurance company, broker, or provider make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy. (t) Life settlement contracts and applications for life settlement contracts, regardless of the form of transmission, shall contain the following statement or a substantially similar statement: “Any person who knowingly presents false information in an application for insurance or for a life settlement contract may be subject to criminal or civil liability.” (1) The lack of a statement as required by this subdivision does not constitute a defense in any prosecution for a fraudulent life settlement act. (2) This act shall not: (A) Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine, and prosecute suspected violations of law. (B) Preempt, supersede, or limit any provision of any state securities law or any rule, order, or notice issued thereunder. (C) Prevent or prohibit a person from disclosing voluntarily information concerning life settlement fraud to a law enforcement or regulatory agency other than the insurance department. (D) Limit the powers granted elsewhere by the laws of this state to the commissioner or an insurance fraud unit to investigate and examine possible violations of law and to take appropriate action against wrongdoers. (u) A provider lawfully transacting business in this state prior to the effective date of this act may continue to do so, pending approval or disapproval of that person’s application for a license as long as the application is filed with the commissioner not later than 30 days after publication by the commissioner of an application form and instructions for licensure of providers. If the publication of the application form and instructions is prior to the effective date of this chapter, then the filing of the application shall not be later than 30 days after the effective date of this act. During the time that an application is pending with the commissioner, the applicant may use any form of life settlement contract that has been filed with the commissioner pending approval thereof, provided that the form is otherwise in compliance with the provisions of this act. Any person transacting business in this state under this provision shall be obligated to comply with all other requirements of this act. A person who has lawfully acted as a broker and negotiated life settlement contracts between any owner residing in this state and one or more providers for at least one year immediately prior to the effective date of this act may continue to do so pending approval or disapproval of that person’s application for a license, as long as the application is filed with the commissioner not later than 30 days after publication by the commissioner of an application form and instructions for licensure of brokers. If the publication of the application form and instructions is prior to the effective date of this chapter, then the filing of the application shall not be later than 30 days after the effective date of this act. Any person transacting business in this state under this provision shall be obligated to comply with all other requirements of this act. (Added by Stats. 2009, Ch. 343, Sec. 6. (SB 98) Effective January 1, 2010.)
  190. 10113.35.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may adopt rules and regulations needed to implement this act.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.35. (a) The commissioner may adopt rules and regulations reasonably necessary to implement the provisions of this act. (b) This section shall be prospective only, and nothing in the act adding this section shall be interpreted to interfere with or overrule regulations adopted prior to the effective date of this act by the Insurance Commissioner pursuant to the authority granted at the time those regulations were adopted. (Repealed and added by Stats. 2011, Ch. 414, Sec. 5. (AB 1425) Effective January 1, 2012.)
  191. 10113.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If a group life insurance policy makes coverage contestable for suicide for a period after coverage starts, only the remaining part of that period can be applied to a certificate holder’s individual conversion policy of an equal or lesser amount.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.4. If a group life insurance policy contains a provision that makes a certificate holder’s coverage contestable on the grounds of suicide for a period following commencement of coverage, only the unexpired portion of that period shall be applied to a certificate holder’s individual conversion policy of an equal or lesser amount of coverage. (Added by Stats. 1997, Ch. 440, Sec. 1. Effective January 1, 1998.)
  192. 10113.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An individual life insurance policy must become incontestable after up to two years, subject to stated exceptions; after reinstatement, contestability is limited to the same period and conditions; and impostor substitution during the application process can prevent any contract from being formed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.5. (a) An individual life insurance policy delivered or issued for delivery in this state shall contain a provision that it is incontestable after it has been in force, during the lifetime of the insured, for a period of not more than two years after its date of issue, except for nonpayment of premiums and except for any of the supplemental benefits described in Section 10271, to the extent that the contestability of those benefits is otherwise set forth in the policy or contract supplemental thereto. An individual life insurance policy, upon reinstatement, may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement, and with the same conditions and exceptions, as the policy provides with respect to contestability after original issuance. (b) (1) Notwithstanding subdivision (a), if photographic identification is presented during the application process, and if an impostor is substituted for a named insured in any part of the application 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 process” means any or all of the steps required of a named insured in applying for a certificate under an individual policy of life insurance, including, but not limited to, executing any part of the application 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 process for a certificate under an individual 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 form for a certificate under an individual life insurance policy as the person whose life is to be insured. (c) This section shall not be construed to preclude at any time the assertion of defenses based upon policy provisions that exclude or restrict coverage. (d) This section shall not apply to individual life insurance policies delivered or issued for delivery in this state on or before December 31, 1973. (Amended by Stats. 1998, Ch. 184, Sec. 1. Effective January 1, 1999.)
  193. 10113.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Insurers must deliver life insurance policies by specified methods, and they bear the burden of proving delivery if they do not. Certain employers, corporate policy owners, or trustees controlling 100 or more policies may request sample-policy delivery, and insurers must deliver listed policies within 30 days. Actual delivery does not start a new free-look period.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.6. (a) An insurer that is required to deliver a life insurance policy to the owner of the policy in order to start the period running during which the owner may exercise any statutory right to return a policy for cancellation, shall accomplish the delivery by: (1) Registered or certified mail. (2) Personal delivery, with a signed, written receipt of delivery. (3) First-class mail, with a signed, written receipt of delivery. (4) Other reasonable means, as determined by the commissioner. (b) If an insurer does not deliver a policy by the means set forth in subdivision (a), the burden of proof shall be on the insurer to establish that the policy was delivered, in the event of a dispute with the owner of the policy. (c) Notwithstanding subdivisions (a) and (b), a policy shall be deemed to have been received six months after the date of issuance if premiums have been paid. (d) An employer or corporate policy owner, or the plan trustee of an employer or corporate policy owner who controls 100 or more policies, shall have the option to request in writing from an insurer the delivery of a sample policy with one or more census pages in a form satisfactory to the employer, corporate policy owner, or plan trustee, as an alternative to the delivery requirements of subdivision (a). However, delivery of the sample policy and census page as provided in this subdivision shall be subject to the provisions of subdivisions (a) and (b). The insurer shall deliver all of the policies listed on the census page to the employer, corporate policy owner, or plan trustee within 30 days of demand for delivery. The delivery of the actual policies shall not institute a new “free look” period. (Amended by Stats. 1996, Ch. 686, Sec. 1. Effective January 1, 1997.)
  194. 10113.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer must give the policyholder written notice of a premium increase at least 20 days before it takes effect, and special formatting applies if the notice is included in a premium or renewal invoice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.7. (a) An increase of premium on an individual life insurance policy that provides for premium changes by the insurer is not effective unless written notice is delivered to the policyholder, or mailed to his or her last known address as shown by the records of the insurer, not less than 20 days prior to the effective date of the increase. If the notice is sent with or contained as part of an ordinary premium or renewal invoice or payment request, the notice of increase shall be prominently displayed and stated separately from the ordinary statement of the amount due. (b) This section shall not apply to premium increases resulting directly from changes in coverage requested by the policyholder, or when the insurer has previously disclosed, in writing, either at the time the policy was issued or during the life of the contract, a specific date of change of premium, and the new premium amount. (c) Nothing in this section shall be construed to limit application of any other provision of law, nor shall it be construed to prevent application of any contractual provision affording greater rights to the policyholder. (Added by Stats. 1995, Ch. 791, Sec. 3. Effective January 1, 1996.)
  195. 10113.70.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If a flexible premium life insurance policy has an adverse change in nonguaranteed elements, the insurer must send a summary notice, and sometimes an inforce illustration, before the change takes effect.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.70. (a) (1) Whenever a flexible premium life insurance policy is subject to an adverse change in the current scale of nonguaranteed elements, as soon as practicable, but no later than 90 days before the effective date of the adverse change in the current scale of nonguaranteed elements, the insurer shall provide a summary notice and, if the policy is designated as one for which illustrations shall be used, an inforce illustration of current and future benefits and values. The illustration or illustrations shall be based on the insurer’s illustrated scale after the effective date of the adverse change in the current scale of nonguaranteed elements. (2) An inforce illustration provided pursuant to this section shall comply with the requirements of subdivisions (a) and (b) of Section 10509.955 and subdivisions (a) and (e) of Section 10509.956. (b) The summary notice shall be in no less than 12-point type, and the illustration and summary notice shall contain the following language in boldface type: “IMPORTANT: NOTICE OF CHANGE IN NONGUARANTEED ELEMENTS OF YOUR POLICY.” (c) The summary notice shall include the information required by paragraphs (1) to (5), inclusive, and the language set forth in paragraphs (6) to (8), inclusive: (1) The name of each nonguaranteed element in the current scale of nonguaranteed elements that is subject to an adverse change. (2) The definition of each nonguaranteed element in the current scale of nonguaranteed elements that is subject to an adverse change. (3) A statement identifying the current rate or charge for each nonguaranteed element and the new rate or charge for each nonguaranteed element, with reference to the current scale of nonguaranteed elements, including the percentage change in the nonguaranteed element that the adverse change represents. (4) An explanation that the adverse change in the current scale of nonguaranteed elements is based on expectations of the future cost of providing the benefits under the policy, and that the adverse change to the current scale of nonguaranteed elements will reduce the accumulation value and may increase the risk of policy lapse based on continued payment of current premiums. (5) The date the adverse change to the current scale of nonguaranteed elements will take effect. (6) “Policy information: Last policy anniversary date: ____ Next policy anniversary date: ____ Current accumulation value: ____ Current cash surrender value (accumulation value minus any surrender charges and policy loans): ____” (7) “Your options: Take no action: This option will reduce the accumulation of your policy. Additional premiums will be required at some point in order to maintain your coverage if not otherwise adequately funded to maintain coverage. Pay additional premiums: You may choose to pay additional premiums starting now to maintain your policy’s accumulation value and death benefit coverage for the level and period anticipated before the increase. Reduce the face value of your policy: If your policy is not already at the minimum value specified on your policy, you may choose to reduce the specified amount on your policy to a level that will be supported by the amount and years of the premium payments you would like to pay. Please note that reducing the specified amount may result in a surrender charge. Surrender your policy: You may choose to surrender your policy for the current cash surrender value. Before you decide to surrender your policy, you should consult your tax, insurance, or financial advisor. Convert your policy (applicable only if your policy includes a conversion or exchange privilege in the contract): If you wish to maintain life insurance coverage but are unable to pay increased premiums to keep your policy in force, you may choose to convert your flexible premium life insurance policy to a different type of life insurance policy we offer, subject to the terms of conversions listed in your policy, which may better suit your financial needs.” (8) “We understand that you may have further questions about this change or the options available to you. You may call your agent or our customer service team at [insert customer service toll-free telephone number and hours of operation].” (d) As used in this section: (1) “Adverse change” means a change to the current scale of nonguaranteed elements that increases or may increase a charge, or reduces or may reduce a benefit to the policy owner, other than a change in a credited interest rate or an index account parameter based entirely on changes in the insurer’s expected investment income or hedging costs. (2) “Current scale of nonguaranteed elements” means the nonguaranteed elements, as defined in subdivision (m) of Section 10509.953, that apply to a policy in the current year and in future years, unless changed by the insurer. (3) “Index account parameter” means a feature impacting the net credited rate for an index account, such as participation rate, cap, or spread. (e) This section does not prohibit an insurer from including additional information in the notice that is specific to the policy for which the notice is sent, so long as it meets the requirements of this section. (f) This section does not apply to a corporate-owned life insurance policy permitted by Section 10110.4 under which all benefits are payable to the corporate policy owner. (g) (1) This section shall apply to a flexible premium life insurance policy in effect on or after April 1, 2019. (2) Notwithstanding paragraph (1), the notice requirement of this section shall apply to an adverse change in the current scale of nonguaranteed elements that is scheduled to take effect on or after July 1, 2019. (3) Notwithstanding paragraph (1), the illustration requirement of this section shall apply to an adverse change in the current scale of nonguaranteed elements that is scheduled to take effect on or after July 1, 2020. (Added by Stats. 2018, Ch. 545, Sec. 1. (AB 2634) Effective January 1, 2019.)
  196. 10113.71.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Life insurance policies must include at least a 60-day grace period, stay in force during that period, and insurers must send certain lapse/termination notices within the stated time limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.71. (a) Each life insurance policy issued or delivered in this state shall contain a provision for a grace period of not less than 60 days from the premium due date. The 60-day grace period shall not run concurrently with the period of paid coverage. The provision shall provide that the policy shall remain in force during the grace period. (b) (1) A notice of pending lapse and termination of a life insurance policy shall not be effective unless mailed by the insurer to the named policy owner, a designee named pursuant to Section 10113.72 for an individual life insurance policy, and a known assignee or other person having an interest in the individual life insurance policy, at least 30 days prior to the effective date of termination if termination is for nonpayment of premium. (2) This subdivision shall not apply to nonrenewal. (3) Notice shall be given to the policy owner and to the designee by first-class United States mail within 30 days after a premium is due and unpaid. However, notices made to assignees pursuant to this section may be done electronically with the consent of the assignee. (c) For purposes of this section, a life insurance policy includes, but is not limited to, an individual life insurance policy and a group life insurance policy, except where otherwise provided. (Amended by Stats. 2013, Ch. 76, Sec. 137. (AB 383) Effective January 1, 2014.)
  197. 10113.72.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not issue or deliver an individual life insurance policy in California until the applicant can name at least one person to receive lapse or termination notices, and the insurer must give required notices before lapse or termination for nonpayment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.72. (a) An individual life insurance policy shall not be issued or delivered in this state until the applicant has been given the right to designate at least one person, in addition to the applicant, to receive notice of lapse or termination of a policy for nonpayment of premium. The insurer shall provide each applicant with a form to make the designation. That form shall provide the opportunity for the applicant to submit the name, address, and telephone number of at least one person, in addition to the applicant, who is to receive notice of lapse or termination of the policy for nonpayment of premium. (b) The insurer shall notify the policy owner annually of the right to change the written designation or designate one or more persons. The policy owner may change the designation more often if he or she chooses to do so. (c) No individual life insurance policy shall lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days prior to the effective date of the lapse or termination, gives notice to the policy owner and to the person or persons designated pursuant to subdivision (a), at the address provided by the policy owner for purposes of receiving notice of lapse or termination. Notice shall be given by first-class United States mail within 30 days after a premium is due and unpaid. (Added by Stats. 2012, Ch. 315, Sec. 2. (AB 1747) Effective January 1, 2013.)
  198. 10113.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    Health insurers with a website must post access to the comparative benefit matrix, send copies to certain business contacts, and require representatives and contracted solicitors to give individuals a copy when showing a benefit package.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.8. (a) Each health insurer that maintains an Internet Web site shall make a downloadable copy of the comparative benefit matrix prepared pursuant to Section 10127.14 available through a link on its site to the Internet Web sites of the department and the Department of Managed Health Care. (b) Each health insurer shall send copies of the comparative benefit matrix on an annual basis, or more frequently as the matrix is updated by the department and the Department of Managed Health Care, to solicitors and solicitor firms and employers with whom it contracts. Each health insurer shall require its representatives and the solicitors and soliciting firms with which it contracts, to provide a copy of the comparative benefit matrix to individuals when presenting any benefit package for examination or sale. (c) This section shall not apply to accident-only, specified disease, hospital indemnity, CHAMPUS supplement, long-term care, Medicare supplement, dental-only, or vision-only insurance policies. (Amended by Stats. 2004, Ch. 164, Sec. 4. Effective January 1, 2005.)
  199. 10113.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer must give advance written notice before changing premium rates or coverage for an individual health insurance policy, and the notice must include specific pricing and coverage details.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10113.9. (a) This section shall not apply to vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis. (b) (1) A change in the premium rate or coverage for an individual health insurance policy shall not become effective unless the insurer has provided a written notice of the change at least 10 days before the start of the annual enrollment period applicable to the policy or 60 days before the effective date of the policy renewal, whichever occurs earlier in the calendar year. (2) The written notice required pursuant to paragraph (1) shall be provided to the individual policyholder at their last address known to the insurer. The notice shall state in italics and in 12-point type the actual dollar amount of the premium increase and the specific percentage by which the current premium will be increased. The notice shall describe in plain, understandable English any changes in the policy or any changes in benefits, including a reduction in benefits or changes to waivers, exclusions, or conditions, and highlight this information by printing it in italics. The notice shall specify in a minimum of 10-point bold typeface, the reason for a premium rate change or a change in coverage or benefits. (c) (1) If the department determines that a rate is unreasonable or not justified consistent with Article 4.5 (commencing with Section 10181), the insurer shall notify the policyholder of this determination. This notification may be included in the notice required in subdivision (b). The notification to the policyholder shall be developed by the department. The development of the notification required under this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (2) The notification to the policyholder shall include the following statements in 14-point type: (A) The Department of Insurance has determined that the rate for this product is unreasonable or not justified after reviewing information submitted to it by the insurer. (B) During the open enrollment period, the policyholder has the option to obtain other coverage from this insurer or another insurer, or to keep this coverage. (C) The policyholder may want to contact Covered California at www.coveredca.com for help in understanding available options. (D) Many Californians are eligible for financial assistance from Covered California to help pay for coverage. (3) The insurer may include in the notification to the policyholder the internet website address at which the insurer’s final justification for implementing an increase that has been determined to be unreasonable by the commissioner may be found pursuant to Section 154.230 of Title 45 of the Code of Federal Regulations. (4) The notice shall also be provided to the agent of record for the policyholder, if any, so that the agent may assist the purchaser in finding other coverage. (5) In developing the notification, the department shall take into consideration that this notice is required to be provided to an individual applicant pursuant to subdivision (g) of Section 10181.3. (d) (1) Before July 1, 2024, if an insurer rejects a dependent of a policyholder applying to be added to the policyholder’s individual grandfathered health plan, rejects an applicant for a Medicare supplement policy due to the applicant having end-stage renal disease, or offers an individual grandfathered health plan to an applicant at a rate that is higher than the standard rate, the insurer shall inform the applicant about the California Major Risk Medical Insurance Program (MRMIP) (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code) and about new coverage options and the potential for subsidized coverage through Covered California. The insurer shall direct persons seeking more information to MRMIP, Covered California, plan or policy representatives, insurance agents, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister. (2) On or after July 1, 2024, if an insurer rejects a dependent of a policyholder applying to be added to the policyholder’s individual grandfathered health plan, rejects an applicant for a Medicare supplement policy due to the applicant having end-stage renal disease, or offers an individual grandfathered health plan to an applicant at a rate that is higher than the standard rate, the insurer shall inform the applicant about new coverage options and the potential for subsidized coverage through Covered California. The insurer shall direct persons seeking more information to Covered California, plan or policy representatives, insurance agents, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister. (e) A notice provided pursuant to this section is a private and confidential communication and, at the time of application, the insurer shall give the applicant the opportunity to designate the address for receipt of the written notice in order to protect the confidentiality of personal or privileged information. (f) For purposes of this section, the following definitions shall apply: (1) “Covered California” means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code. (2) “Grandfathered health plan” has the same meaning as that term is defined in Section 1251 of PPACA. (3) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and rules, regulations, or guidance issued pursuant to that law. (Amended by Stats. 2024, Ch. 40, Sec. 23. (SB 159) Effective June 29, 2024.)
  200. 10114.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An insurer must first get satisfactory proof that funeral services were actually performed before paying life or disability insurance proceeds to an undertaker or funeral director. If that proof is not provided in time, the insurer must instead pay other designated beneficiaries or fallback recipients.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. General Provisions [10110 - 10127.20] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10114. Before an insurer may pay the proceeds of any contract of life or disability insurance to any undertaker or funeral director, as beneficiary or assignee, for funeral services, it shall require proof satisfactory to it that the services have been rendered. If proof of rendition of services is not furnished within thirty days after demand is made upon an 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 any contingent or other beneficiary designated in the policy, and if no contingent or other beneficiary is so designated, to the estate of the insured or to any person, other than to such undertaker or funeral director, 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. (Added by Stats. 1939, Ch. 727.)

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