Insurance Code — Part 12 | INS — United States — California law | Esheria

Insurance Code

Part 12 of 23 · provisions 2,201–2,400

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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. 12414.26.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. )

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    Acts, actions, or agreements made under the authority of Article 5.5 or 5.7 are not violations of, and cannot be prosecuted or sued under, other California laws unless those laws specifically refer to insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. ) ## 12414.26. No act done, action taken, or agreement made pursuant to the authority conferred by Article 5.5 (commencing with Section 12401) or Article 5.7 (commencing with Section 12402) of this chapter shall constitute a violation of or grounds for prosecution or civil proceedings under any other law of this state heretofore or hereafter enacted which does not specifically refer to insurance. (Added by Stats. 1973, Ch. 1130.)
  2. 12414.27.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. )

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    Starting 120 days after January 1, 1974, title insurers, underwritten title companies, and controlled escrow companies may charge only in line with effective rate filings or other authorization under Article 5.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. ) ## 12414.27. Commencing 120 days following January 1, 1974, no title insurer, underwritten title company or controlled escrow company shall charge for any title policy or service in connection with the business of title insurance, except in accordance with rate filings which have become effective pursuant to Article 5.5 (commencing with Section 12401) of this chapter or as otherwise authorized by such article; provided, however, where a rate is on file with the commissioner and in effect immediately prior to such date, such rate shall continue in effect until a new rate filing is thereafter made and becomes effective in the manner provided in Article 5.5 (commencing with Section 12401) of this chapter. (Added by Stats. 1973, Ch. 1130.)
  3. 12414.28.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. )

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    Title insurers must have all title policies signed by the required corporate officers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. ) ## 12414.28. All title policies issued by title insurers shall be subscribed by the president or a vice president and by the secretary or an assistant secretary of the corporation. All such title policies are as binding and obligatory upon the corporation as if executed over the corporate seal. The signatures of such officers, or any one of them, may be in their own handwriting or engraved, lithographed, printed, stamped, or otherwise affixed to such title policies. Any title policy so signed shall be presumed to be duly subscribed, and if the title policy provides for an additional signature and such signature appears thereon a like presumption shall apply. (Added by Stats. 1973, Ch. 1130.)
  4. 12414.29.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. )

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    This section says Chapter 1 controls the enforcement of Articles 5.5 and 5.7, and that chapter regulations are the exclusive regulation for escrow and title transactions by entities in the title insurance business.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. ) ## 12414.29. The administration and enforcement of Article 5.5 (commencing with Section 12401) and Article 5.7 (commencing with Section 12402) of this chapter shall be governed solely by the provisions of this chapter. Except as provided in this chapter, no other law relating to insurance and no other provisions in this code heretofore or hereafter enacted shall apply to or be construed as supplementing or modifying the provisions of such articles unless such other law or other provision expressly so provides and specifically refers to the sections of such articles which it intends to supplement or modify. The provisions of this chapter and regulations adopted pursuant thereto shall constitute the exclusive regulation of the conduct of escrow and title transactions by entities engaged in the business of title insurance as defined in Section 12340.3, notwithstanding any local regulation or ordinance. (Amended by Stats. 1981, Ch. 479, Sec. 5.)
  5. 12414.30.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. )

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    A preliminary report for an offer to issue an owner’s policy of title insurance must include a bold warning statement. A title insurance company may also provide coverage for a monetary lien listed in the preliminary report if requested.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. ) ## 12414.30. (a) When constituting an offer to issue an owner’s policy of title insurance, a preliminary report shall incorporate the following statement, in bold print on front of the preliminary report: “Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land.” (b) Upon request, a title insurance company may provide coverage against loss or damage under the terms, conditions, and stipulations of the title insurance policy for any monetary lien set forth in the preliminary report. (c) This section does not modify any of the provisions of Section 12340.11. (Added by Stats. 1994, Ch. 1125, Sec. 1. Effective January 1, 1995.)
  6. 12414.31.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. )

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    The commissioner must notify two other commissioners after certain disciplinary actions become final, provide related documents and factual material on request, maintain a public database of affected persons, and keep confidential information from being made public under this section.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.9. Examinations, Penalties and Miscellaneous [12414.20 - 12414.31] ( Article 6.9 added by Stats. 1973, Ch. 1130. ) ## 12414.31. (a) (1) Whenever the commissioner takes any formal enforcement or disciplinary action directly against an employee of a title insurer, underwritten title company, or controlled escrow company, for malfeasance or misconduct committed by the employee in their performance of escrow-related services, upon the action becoming final the commissioner shall notify the Real Estate Commissioner and the Commissioner of Financial Protection and Innovation of the action or actions taken. The purpose of this notification is to alert the departments that enforcement or disciplinary action has been taken, if the employee seeks or obtains employment with entities regulated by the departments. (2) The commissioner shall provide the Real Estate Commissioner and the Commissioner of Financial Protection and Innovation, in addition to the notification of the action taken, with a copy of the written accusation, statement of issues, or order issued or filed in the matter and, at the request of the Real Estate Commissioner or Commissioner of Financial Protection and Innovation, with any underlying factual material relevant to the enforcement or disciplinary action. Any confidential information provided by the commissioner to the Commissioner of Financial Protection and Innovation or the Real Estate Commissioner shall not be made public pursuant to this section. Notwithstanding any other law, the disclosure of any underlying factual material to the Commissioner of Financial Protection and Innovation or the Real Estate Commissioner shall not operate as a waiver of confidentiality or any privilege that the commissioner may assert. (b) The commissioner shall establish and maintain, on the internet website maintained by the Department of Insurance, a separate and readily identifiable database of all persons who have been subject to any enforcement or disciplinary action that triggers the notification requirements of this section. The database shall also contain a direct link to the databases, described in Section 10176.1 of the Business and Professions Code and Section 17423.1 of the Financial Code and required to be maintained on the internet websites of the Bureau of Real Estate and the Department of Financial Protection and Innovation, respectively, of persons who have been subject to enforcement or disciplinary action for malfeasance or misconduct related to the escrow industry by the Commissioner of Financial Protection and Innovation and the Real Estate Commissioner. (c) There shall be no liability on the part of, and no cause of action of any nature shall arise against, the State of California, the Department of Insurance, the Insurance Commissioner, any other state agency, or any officer, agent, employee, consultant, or contractor of the state, for the release of any false or unauthorized information pursuant to this section, unless the release of that information was done with knowledge and malice, or for the failure to release any information pursuant to this section. (Amended by Stats. 2022, Ch. 452, Sec. 198. (SB 1498) Effective January 1, 2023.)
  7. 12415.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Annual Renewal Fees [12415 - 12417] ( Article 7 added by Stats. 1967, Ch. 1415. )

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    The section states that certificated title insurers and licensed underwritten title companies are to pay an annual renewal fee to the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Annual Renewal Fees [12415 - 12417] ( Article 7 added by Stats. 1967, Ch. 1415. ) ## 12415. It is the intent of the Legislature that certificated title insurers and licensed underwritten title companies, as defined in Section 12340.5 shall pay to the commissioner an annual renewal fee, as provided in Section 12416, in addition to that provided as to title insurers by Section 705 to cover the costs to the commissioner for administering and enforcing Article 3.7 (commencing with Section 12389), Article 5.5 (commencing with Section 12401), and Article 6 (commencing with Section 12404) of Chapter 1, Part 6, Division 2 of this code and other provisions of this code as may be subsequently incorporated by reference in this article by legislative enactment. Such fee shall be in lieu of all fees provided for in Article 6 (commencing with Section 12404) of Chapter 1, Part 6, Division 2. (Amended by Stats. 1973, Ch. 1130.)
  8. 12416.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Annual Renewal Fees [12415 - 12417] ( Article 7 added by Stats. 1967, Ch. 1415. )

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    Certain title insurers must pay annual renewal fees, with lower fees for underwritten title companies below specified document-count thresholds.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Annual Renewal Fees [12415 - 12417] ( Article 7 added by Stats. 1967, Ch. 1415. ) ## 12416. Each certificated title insurer possessing a certificate of authority of indefinite term pursuant to Section 701 shall owe and pay an annual renewal fee of nine hundred eighty-eight dollars ($988). Each underwritten title company possessing a license of indefinite term pursuant to Section 12389 shall owe and pay an annual renewal fee of five hundred sixty-seven dollars ($567), except that: (a) when the aggregate number of documents recorded and documents filed in the offices of the county recorders in the preceding calendar year in all counties where the company is licensed to transact business is less than 50,000, that company shall owe and pay an annual renewal fee of two hundred eighty-three dollars ($283), or (b) when the aggregate number of documents recorded and documents filed in the offices of the county recorders in the preceding calendar year in all counties where the company is licensed to transact business is more than 50,000 but less than 100,000, that company shall owe and pay an annual renewal fee of three hundred sixty dollars ($360). Those fees shall be for annual periods commencing on July 1 of each year and ending on June 30 of each year, and shall be due on March 1 preceding the annual period for which those fees are charged, and shall be delinquent on and after April 1 next following the date when due. (Amended by Stats. 2017, Ch. 534, Sec. 80. (AB 1699) Effective January 1, 2018.)
  9. 12417.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Annual Renewal Fees [12415 - 12417] ( Article 7 added by Stats. 1967, Ch. 1415. )

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    The annual renewal fee under this article is a service charge, not a tax.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Annual Renewal Fees [12415 - 12417] ( Article 7 added by Stats. 1967, Ch. 1415. ) ## 12417. The annual renewal fee provided by this article is not a tax but a charge for services to be rendered. (Added by Stats. 1967, Ch. 1415.)
  10. 12418.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. )

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    A person may not work as a title marketing representative in this state unless they hold a valid registration certificate issued by the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. ) ## 12418. (a) No person shall be employed as a title marketing representative in this state unless the person holds a valid “certificate of registration” as a title marketing representative issued by the commissioner pursuant to Section 12418.1. (b) For purposes of this article, “title marketing representative” means a natural person employed by a title insurer, underwritten title company, or controlled escrow company whose primary duty is to market, offer, solicit, negotiate, or sell title insurance, as defined in Section 12340.1. A title marketing representative does not include a person whose primary duties directly involve the creation, production, or issuance of the title policy or the performance of escrow services. (c) If any person knowingly markets title insurance without having applied for or obtained a certificate of registration pursuant to Section 12418.1, the commissioner may issue a cease and desist order pursuant to Section 12921.8. (Added by Stats. 2008, Ch. 280, Sec. 2. Effective January 1, 2009.)
  11. 12418.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. )

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    Applicants for a title marketing representative registration must file a written application with the commissioner and pay the required fee; employers must notify the department when the representative’s employment ends or changes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. ) ## 12418.1. (a) A certificate of registration as a title marketing representative shall be applied for and renewed by filing with the commissioner a written application. The application shall be on a form prescribed by the commissioner, and shall prescribe the disclosure of information that will aid the commissioner in determining whether the prerequisites for the certificate have been met. The applicant shall certify that the contents of the application are true and correct under penalty of perjury. (b) Each application for a certificate of registration shall contain the following information: (1) The residence address, the principal business address, and the mailing address of the applicant. (2) A statement, signed by an officer of the business by whom the applicant is or will be employed, certifying that the applicant will be provided training regarding Article 6 (commencing with Section 12404) within 60 days of the hiring date or date of application. (3) A statement, signed by the applicant, as to whether he or she has previously had a certificate of registration revoked, suspended, or otherwise limited under Section 12418.4. (c) Each application to obtain or renew a certificate of registration shall be accompanied by a filing fee in an amount determined by the department to be sufficient to defray the department’s actual costs of processing the application, not to exceed two hundred thirty-seven dollars ($237). An application shall not be deemed filed unless it has been delivered to the department accompanied by the proper filing fee. (d) The commissioner may decline to act on an incomplete or defective application until an amended application that completes the prescribed form has been filed with the department. In the event that the application is found to be defective or incomplete, the department shall notify the applicant and his or her employer in writing that the application needs to be modified and resubmitted within 15 days of receipt of this written notification. (e) An applicant submitting an application filed with the department for a certificate of registration as a title marketing representative may solicit, sell, or market title insurance, as defined in Section 12340.1, in the interim time period preceding the formal approval or rejection of the application, but shall be subject to the same compliance requirements as a holder of an approved certificate of registration. An applicant with a pending application shall be deemed to be operating on a provisional basis. (f) In the event that the title marketing representative’s employment with a title company is terminated, the title company formerly employing the title marketing representative shall notify the department within 30 days of the termination. If the title marketing representative becomes employed by another title company as a title marketing representative, the new employer shall notify the department of the title marketing representative’s new employment within 30 days of the commencement of that employment. (g) An applicant who has previously had a certificate of registration revoked, suspended, or otherwise limited under subdivision (d) of Section 12418.4 may not sell, solicit, or market title insurance during the interim period described in subdivision (e). (Amended by Stats. 2017, Ch. 534, Sec. 81. (AB 1699) Effective January 1, 2018.)
  12. 12418.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. )

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    Applicants or holders of a title marketing representative registration do not have to pass a qualifying exam and are exempt from prelicensing and continuing education, except as specified elsewhere in Section 12418.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. ) ## 12418.2. (a) An applicant or holder of a certificate of registration as a title marketing representative is not required to pass a qualifying examination, and is exempt from prelicensing and continuing education requirements, except as specified in paragraph (2) of subdivision (b) of Section 12418.1. (b) Upon the filing of an application for the issuance or renewal of a certificate of registration, the commissioner may conduct an investigation, during the interim period set forth in subdivision (e) of Section 12418.1, to determine if the applicant shall be granted the certificate of registration by virtue of prior conduct in the marketing of policies of title insurance and to verify the accuracy of the information submitted by the applicant to the department and may require the filing of any supplementary documents, affidavits, and statements that may be necessary to determine whether training specified in paragraph (2) of subdivision (b) of Section 12418.1 has been, or will be, provided to the applicant within the time period set forth in Section 12418.1. Should the commissioner decline to approve the granting of a certificate of registration, the procedure set forth in subdivision (c) of Section 12418.4 shall apply. (Added by Stats. 2008, Ch. 280, Sec. 2. Effective January 1, 2009.)
  13. 12418.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. )

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    Registration certificates last three years, and registrants must renew them even if no renewal notice is received.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. ) ## 12418.3. (a) Each certificate of registration issued under this article shall be for a three-year period beginning on the date the certificate is issued. (b) Not less than 60 days before a certificate of registration will expire, the commissioner may mail or use an electronic delivery method, including email or other similar electronic method, to deliver an application to renew the certificate to the latest email or mailing address appearing on the registrant’s records. It shall be the responsibility of the registrant to renew his or her certificate, whether or not a renewal notice is received. (c) The application for renewal of an expired certificate of registration may be filed after the expiration date and until the same month and day of the next succeeding year. In addition to the fee for a renewal application, a delinquent application fee in the amount of fifty-eight dollars ($58) shall be assessed for each application for renewal filed after the expiration date. Each registrant shall be subject to payment of delinquent application fees under this subdivision. The commissioner may waive the delinquent application fee, or accept a renewal filed after the date specified in this subdivision, if the registrant’s failure to comply is due to clerical or other inadvertent error on the part of the department. (Amended by Stats. 2017, Ch. 534, Sec. 82. (AB 1699) Effective January 1, 2018.)
  14. 12418.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. )

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    This section lets the department and commissioner take disciplinary action against title marketing representatives and applicants, including denial, suspension, revocation, surrender, and monetary penalties, with a hearing requirement before adverse action in most cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Title Insurance [12340 - 12418.4] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Title Insurance Representatives [12418 - 12418.4] ( Article 8 added by Stats. 2008, Ch. 280, Sec. 2. ) ## 12418.4. (a) Sections 1667, 1668, 1669, 1670, 1729, 1729.2, 1738, 1738.5, 1742, 1743, and Article 6 (commencing with Section 12404), shall apply to all applicants or holders of a certificate of registration issued pursuant to this article. (b) The department may revoke, suspend, restrict, or decline to issue a certificate of registration if it determines that the title marketing representative or applicant has violated provisions of Article 6 (commencing with Section 12404) pursuant to the due process and hearing requirements set forth in subdivision (c). (c) Except as provided in Section 1669, a certificate of registration shall not be denied, restricted, suspended, or revoked without a hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (d) In addition to, or in lieu of, any other penalty that may be imposed under this article against a title marketing representative, the commissioner may bring an administrative action against a title marketing representative for any violation of the provisions of Article 6 (commencing with Section 12404). If a title marketing representative charged with a violation of Article 6 (commencing with Section 12404) is determined by the commissioner to have committed the violation, the commissioner may require the surrender of, temporarily suspend or revoke either permanently or temporarily the title marketing representative’s certificate of registration, and, in addition, may impose a monetary penalty. Any payment of a monetary penalty pursuant to a settlement or final adjudication shall be made from the title marketing representative’s personal funds and not by their employer either directly or through the title marketing representative. This article shall not preclude an action against a company that had actual knowledge of the violation by the title marketing representative. A title marketing representative who is issued a certificate of registration under this article may not engage in any activity that is otherwise prohibited through a separate entity controlled by the title marketing representative or by the company or entity that employs the title marketing representative. (e) A title marketing representative who has their certificate of registration revoked by the department shall not be permitted to reapply for another certificate of registration with the department for five years from the date of revocation. (Amended by Stats. 2024, Ch. 444, Sec. 7. (SB 577) Effective January 1, 2025.)
  15. 1242.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Foreign Investments [1240 - 1242] ( Article 6 enacted by Stats. 1935, Ch. 145. )

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    A domestic insurer must not make certain Section 1241 investments through an investment subsidiary if the purchase would push it over specified asset limits or conflict with Section 1196.1.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Foreign Investments [1240 - 1242] ( Article 6 enacted by Stats. 1935, Ch. 145. ) ## 1242. (a) (1) Except as otherwise specified in Section 1241, a domestic insurer shall not acquire directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer would hold more than 3 percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or 5 percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution. (2) The 3 percent limitation in paragraph (1) shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization. (b) A domestic insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer’s aggregate medium and lower grade investments do not comply with the limitations of Section 1196.1. (Added by Stats. 2008, Ch. 129, Sec. 8. Effective January 1, 2009.)
  16. 125.

    ## 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 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )

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    This chapter may be cited as the California Risk Retention Act of 1991.

    ## 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 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 125. This chapter shall be known and may be cited as the California Risk Retention Act of 1991. (Amended by Stats. 1991, Ch. 1040, Sec. 3.)
  17. 1250.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    If a domestic incorporated insurer has invested in certain stock or obligations, the commissioner may require the insurer to report the amount, security, and market value under oath when the investment appears not fully secured or not producing income.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 1250. When any domestic incorporated insurer has, pursuant to the laws of this State, invested any of its funds in purchases of, or loans upon, the stock or obligations of a corporation or of a nation, state, or political or municipal division of a state, if the commissioner has reason to believe that such stock or obligations are not amply secured or are not yielding an income, he may direct the insurer to report to him under oath the amount of the stock or obligation, the security therefor and its market value. (Enacted by Stats. 1935, Ch. 145.)
  18. 1251.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    An insurer must not value a defaulted or insufficiently secured stock, bond, or other debt evidence above market value.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 1251. A stock, bond or other evidence of debt if in default as to principal or interest, or if not amply secured, shall not be valued as an asset of the insurer above its market value. (Enacted by Stats. 1935, Ch. 145.)
  19. 1252.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    An admitted incorporated insurer may have certain secured, non-defaulted bonds or other debt instruments valued under commissioner-set rules.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 1252. All bonds or other evidences of debt held by an admitted incorporated insurer if amply secured and if not in default as to principal or interest may, in the discretion of the commissioner, be valued as follows: (a) If purchased at par, at the par value. (b) If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield the effective rate of interest on the price at which the purchase was made. (c) In such valuation, the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase. The commissioner shall have full discretion in determining the method of calculating values according to the foregoing rule, the values found by him in accordance with such method being final and binding. (Enacted by Stats. 1935, Ch. 145.)
  20. 1253.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    An insurer may report certain bonds or other debt evidence at market value or book value, but not above the aggregate value allowed by section 1252.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 1253. Any such insurer may report such bonds or other evidence of debt at market value or book value, but in no event at an aggregate value exceeding the aggregate of the values calculated according to the rule prescribed by section 1252. (Enacted by Stats. 1935, Ch. 145.)
  21. 1254.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    If the commissioner finds an insurer’s asset insolvent or at risk of insolvency, its value must be reduced if needed to reflect proper value. The commissioner may also require proportional reduction of the asset and related liability when an offset or lien is likely to be enforced, and must grant a hearing on written demand by the insurer.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Valuation of Investments [1250 - 1254] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 1254. Any asset of an insurer which is found by the commissioner to be insolvent or threatened with insolvency shall be reduced in value, if necessary, to reflect its proper value. Where the asset is subject to an offset or lien which the commissioner has reasonable grounds to believe is about to be exercised or enforced, the commissioner may require that the asset and the liability which gives rise to the offset or lien be reduced proportionately. The commissioner shall grant a hearing to establish the value of an asset upon written demand of the insurer. (Added by Stats. 1967, Ch. 1614.)
  22. 126.

    ## 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 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )

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    This section says the chapter is meant to let a bona fide for-profit or nonprofit association, or an individual business, insure against liability and statutory obligations.

    ## 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 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 126. The Legislature finds and declares that the provisions of this chapter are for the purpose of providing a means for a bona fide for-profit or nonprofit association or individual business to insure against liability and those obligations imposed by statute. (Added by Stats. 1990, Ch. 1521, Sec. 1.)
  23. 1260.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Reinsurance Transactions [1260- 1260.] ( Article 8 added by Stats. 1967, Ch. 451. )

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    Certain incorporated or reciprocal insurers that belong to the same group or fleet may enter into reinsurance transactions with each other unless another law specifically forbids it.

    ## 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 2. Incorporated Insurers [1140 - 1260] ( Chapter 2 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Reinsurance Transactions [1260- 1260.] ( Article 8 added by Stats. 1967, Ch. 451. ) ## 1260. Incorporated insurers or reciprocal insurers who are members of what is commonly known as a “group” or “fleet” may enter into reinsurance transactions between members of the same “group” or “fleet” unless otherwise specifically prohibited by law. (Added by Stats. 1967, Ch. 451.)
  24. 12640.01.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 1. Definitions [12640.01 - 12640.02] ( Article 1 added by Stats. 1961, Ch. 719. )

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    This chapter may be cited as the Mortgage Guaranty Insurance Act.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 1. Definitions [12640.01 - 12640.02] ( Article 1 added by Stats. 1961, Ch. 719. ) ## 12640.01. This chapter may be cited as the Mortgage Guaranty Insurance Act. (Added by Stats. 1961, Ch. 719.)
  25. 12640.02.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 1. Definitions [12640.01 - 12640.02] ( Article 1 added by Stats. 1961, Ch. 719. )

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    This section defines “mortgage guaranty insurance,” “authorized real estate security,” “contingency reserve,” and “policyholders surplus” for this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 1. Definitions [12640.01 - 12640.02] ( Article 1 added by Stats. 1961, Ch. 719. ) ## 12640.02. The definitions set forth in this article shall govern the construction of the terms used in this chapter but shall not affect any other provisions of this code. (a) “Mortgage guaranty insurance” means: (1) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a first lien or charge on real estate, provided the improvement on the real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families. (2) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a junior lien or charge on real estate, provided the improvement on the real estate is a residential building or a condominium unit or building designed for occupancy by not more than four families. (3) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate, provided the improvement on the real estate is a building or buildings designed for occupancy by five or more families or designed to be occupied for industrial or commercial purposes. (4) Insurance against financial loss by reason of nonpayment of rent and other sums agreed to be paid under the terms of a written lease for the possession, use, or occupancy of real estate, provided the improvement on the real estate is a building or buildings designed to be occupied for industrial or commercial purposes. (b) (1) “Authorized real estate security” for the purposes of this chapter means either (A) real estate, plus the balance of any pledged cash account, pledged borrower retirement account, or collateralized guaranty agreement contracted for by parents, blood relatives, employers, or nonprofit corporations for the benefit of the borrower; or (B) real estate securing a note, bond, or other evidence of indebtedness by a junior mortgage, deed of trust, or other instrument constituting a junior lien or charge on the real estate, which, when combined with all existing mortgage loan amounts, does not exceed a total indebtedness equal to 103 percent of the fair market value of the real estate at the time the junior loan is made, provided that, in determining the foregoing 103-percent limitation, if the loan securing the junior lien is an equity line of credit loan, the full amount of the line of credit to be secured by the junior lien shall be considered the amount of the loan, and further provided, in all cases that both of the following are true: (i) The real estate loan secured in this manner is any type of loan that a bank, savings association, mortgage banker, credit union, mortgage loan broker, or insurance company, which is supervised and regulated by a department of this state or an agency of the federal government, is authorized to make or arrange, or would be authorized to make or arrange, disregarding any requirement applicable to an institution that the amount of the loan not exceed a certain percentage of the value of the real estate. (ii) The improvement on the real estate is a building or buildings designed for occupancy as specified by paragraphs (1), (2), and (3) of subdivision (a). (2) The lien on the real estate may be subject and subordinate to the following: (A) The lien of any public bond, assessment, or tax, when no installment, call, or payment of or under the bond, assessment, or tax is delinquent. (B) Outstanding mineral, oil or timber rights, rights-of-way, easements or rights-of-way or support, sewer rights, building restrictions or other restrictions or covenants, conditions or regulations of use, or outstanding leases upon the real property under which rents or profits are reserved to the owner thereof. (3) “Authorized real estate security” also means a stock or membership certificate issued to a tenant-stockholder or resident-member by a completed fee simple cooperative housing corporation, as defined in Section 17265 of the Revenue and Taxation Code and Section 216 of the United States Internal Revenue Code. (c) “Contingency reserve” means an additional premium reserve established for the protection of policyholders against the effect of adverse economic cycles. (d) “Policyholders surplus” means the aggregate of capital, surplus, and contingency reserve. (Amended by Stats. 2006, Ch. 538, Sec. 473. Effective January 1, 2007.)
  26. 12640.03.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. )

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    An insurer may not transact mortgage guaranty insurance unless it has at least $1,000,000 in paid-in capital and $1,000,000 in paid-in surplus.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. ) ## 12640.03. An insurer shall not transact the business of mortgage guaranty insurance unless it has paid-in capital of at least one million dollars ($1,000,000) and paid-in surplus of at least one million dollars ($1,000,000). (Added by Stats. 1961, Ch. 719.)
  27. 12640.04.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. )

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    Mortgage guaranty insurers must set up and fund a contingency reserve, keep certain contributions for 120 months, and get commissioner approval for some withdrawals.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. ) ## 12640.04. (a) In addition to the paid-in capital and surplus provided in Section 12640.03, each mortgage guaranty insurer shall establish a contingency reserve after establishment of the unearned premium reserve. There shall be an annual calculation of and contribution to the contingency reserve. The aggregate annual contribution shall be the greater of either 50 percent of the net earned premium or the policyholders surplus required to be established under Section 12640.05 divided by 10. There shall be provisional contributions, made on a quarterly basis, equal to 50 percent of the net earned premium for the preceding quarter. (b) The contributions to the contingency reserve made during each calendar year shall be maintained for a period of 120 months. That portion of the contingency reserve established and maintained for more than 120 months shall be released and shall no longer constitute part of the contingency reserve. (c) With the approval of the commissioner, withdrawals may be made from the contingency reserve when incurred losses exceed 35 percent of the total year-to-date net earned premium. Provisional withdrawals may be made on a quarterly basis from the contingency reserve in an amount not to exceed 75 percent of the withdrawal calculated in accordance with this subdivision. (d) With the approval of the commissioner, a mortgage guaranty insurer may withdraw from the contingency reserve any amounts which are in excess of the policyholders surplus required to be established under Section 12640.05 as indicated on the most recent annual statement filed pursuant to Section 923. In reviewing a request for withdrawal, the commissioner may consider those records that may be necessary to evaluate the request, including, but not limited to, records relating to loss development and trends. If any portion of the contingency reserve for which withdrawal is requested is maintained by a reinsurer, the commissioner may also consider the financial condition of the reinsurer. If any portion of the contingency reserve for which withdrawal is requested is maintained in a segregated account or segregated trust and withdrawal would result in funds being removed from the segregated account or segregated trust, the commissioner may also consider the financial condition of the reinsurer. (e) Releases and withdrawals from the contingency reserve shall be accounted for on a first-in-first-out basis. (f) The calculations to develop the contingency reserve shall be made in the following sequence: (1) The additions required by subdivision (a). (2) The releases required by subdivision (b). (3) The withdrawals permitted by subdivision (c). (4) The withdrawals permitted by subdivision (d). (g) The commissioner’s review of a request for withdrawal under subdivision (d) shall be conducted pursuant to his or her examination authority under Section 730 and at the expense of the insurer pursuant to Section 736. The commissioner shall make a finding, set forth within the documents approving any withdrawal, that the withdrawal, and any reduction in total assets that may follow the withdrawal of which the commissioner is aware at the time of his or her approval, will not reduce the cash or securities of the insurer in a manner that will materially, adversely impair the ability of the insurer to maintain its credit rating or meet future obligations. (Amended by Stats. 2003, Ch. 392, Sec. 1. Effective January 1, 2004.)
  28. 12640.05.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. )

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    Mortgage guaranty insurers must keep policyholders surplus at the required level, and must stop taking new business if they fall short.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. ) ## 12640.05. (a) A mortgage guaranty insurer shall maintain a policyholders surplus in an amount not less than the amount required by this section. The policyholders surplus shall be the calculated net of reinsurance ceded, but shall include reinsurance assumed. “Face amount of an insured mortgage” means the outstanding principal balance computed without any reduction because of an insurer’s option limiting its coverage, but shall exclude the outstanding principal balance of any loan that is in default and for which the insurer has established a loss reserve, provided that the loss reserve established for that loan is equal to or greater than the policyholders surplus the insurer would otherwise be required to establish with respect to that loan, pursuant to this section. Nothing in this subdivision limits the commissioner’s authority under Section 12640.04. (b) If a policy of mortgage guaranty insurance insures individual loans with a percentage claim settlement option on such loans, the insurer shall maintain a policyholders surplus based on each one hundred dollars ($100) of the face amount of the mortgage, the percentage coverage or claim settlement option, and the loan-to-value category. The required amount of policyholders surplus shall be calculated in the following manner: (1) If the total indebtedness is greater than 75 percent of the value of the collateral property at the date of the insurance: Policyholders Policyholders Surplus per $100 Surplus per $100 of the Face of the Face Percent Amount of the Percent Amount of the Coverage Mortgage Coverage Mortgage 5% $ .20 55% $1.50 10 .40 60 1.55 15 .60 65 1.60 20 .80 70 1.65 25 1.00 75 1.75 30 1.10 80 1.80 35 1.20 85 1.85 40 1.30 90 1.90 45 1.35 95 1.95 50 1.40 100 2.00 If the percent coverage is between any five-point increment, then the factor for policyholders surplus per one hundred dollars ($100) of the face amount of the mortgage shall be prorated. (2) If the total indebtedness is at least 50 percent and not more than 75 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 50 percent of the amount required by paragraph (1) of subdivision (b). (3) If the total indebtedness is less than 50 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 25 percent of the amount required by paragraph (1) of subdivision (b). (c) If a policy of mortgage guaranty insurance provides coverage on a group of loans subject to an aggregate loss limit, the policyholders surplus shall be: (1) If the equity is not more than 50 percent and is at least 20 percent, or equity plus prior insurance or a deductible equals 25 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be calculated as follows: Policyholders Policyholders Surplus per $100 Surplus per $100 of the Face of the Face Percent Amount of the Percent Amount of the Coverage Mortgage Coverage Mortgage 1% $ .30 50% $ .825 5 .50 60 .85 10 .60 70 .875 15 .65 75 .90 20 .70 80 .925 25 .75 90 .95 30 .775 100 1.00 40 .80 If the percent coverage is between any specified increment, then the factor for policyholders surplus per one hundred dollars ($100) of the face amount of the mortgage shall be prorated. (2) If the equity is less than 20 percent or the equity plus prior insurance or a deductible is less than 25 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 200 percent of the amount required by paragraph (1) of subdivision (c). (3) If the equity is more than 50 percent or the equity plus prior insurance or a deductible is more than 55 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 50 percent of the amount of policyholders surplus required by paragraph (1) of subdivision (c). (d) If a policy of mortgage guaranty insurance provides for layers of coverage, deductibles or excess reinsurance, the required amount of policyholders surplus may be computed by subtraction of the required policyholders surplus for the lower percentage coverage limits from the required policyholders surplus for the upper or greater coverage limit. (e) If a policy of mortgage guaranty insurance provides for coverage on loans secured by second liens, the policyholders surplus shall be: (1) If the policy provides coverage on individual loans, the required amount of policyholders surplus shall be calculated according to subdivision (b) after the percent of coverage and the loan-to-value ratios have been determined as follows: (A) Divide the insured portion of the second loan by the entire loan indebtedness on the collateral property to determine the percent coverage. (B) Divide the entire loan indebtedness on the property by the value of the collateral property at the date of insurance to determine loan-to-value percent. (C) The face amount of insured mortgage shall mean the entire loan indebtedness on the property. (D) Equity shall mean the complement of the loan-to-value percent. (2) If the policy provides coverage on a group of loans subject to an aggregate loss limit, the policyholders surplus shall be calculated according to subdivision (c) after the percent of coverage and the loan-to-value ratios have been determined in accordance with paragraph (1). (f) If a policy of mortgage guaranty insurance provides for coverage on leases, the policyholders surplus shall be four dollars ($4) for each one hundred dollars ($100) of the insured amount of the lease. (g) (1) If a mortgage guaranty insurer will not have the amount of policyholders surplus required by this section, it shall cease transacting new business until such time that its policyholders surplus is in compliance with this section. At least 60 days prior to the time the policyholders surplus is estimated to fall below the amount required by this section, the insurer shall notify the commissioner and may request a waiver of the requirements of this subdivision. If the commissioner fails to issue an order in response to the waiver request within 60 days after the insurer requests a waiver, the insurer may continue transacting new business in California until the commissioner issues an order. The commissioner may retain consultants, including accountants, actuaries, or other experts, to assist the commissioner in the review of the information reasonably necessary to evaluate the waiver request made pursuant to this subdivision, and the insurer shall bear the commissioner’s cost of retaining those consultants. The insurer shall reimburse the commissioner for the cost of a hearing held pursuant to this subdivision unless the insurer has expressly waived the right to a hearing. Nothing in this subdivision is intended to limit the commissioner’s authority under any other provision of this code. (2) An insurer who notifies the commissioner within 10 business days following the effective date of this section that its policyholders surplus is estimated to fall below the amount required by this section shall be deemed to have complied with the 60-day notice required by subdivision (1). (Amended by Stats. 2009, Ch. 574, Sec. 1. (SB 291) Effective January 1, 2010.)
  29. 12640.06.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer may not declare dividends unless they come from undivided profits remaining after paid-in capital, paid-in surplus, and the contingency reserve are covered.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 2. Capital, Surplus and Contingency Reserve Requirements [12640.03 - 12640.06] ( Article 2 added by Stats. 1961, Ch. 719. ) ## 12640.06. A mortgage guaranty insurer shall not declare any dividends except from undivided profits remaining on hand over and above the aggregate of its paid-in capital, paid-in surplus and contingency reserve. (Added by Stats. 1961, Ch. 719.)
  30. 12640.07.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    Only a qualified stock or mutual casualty insurer may transact mortgage guaranty insurance in this state, and the insurance must be limited to the loan types and value cap stated here.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.07. (a) Mortgage guaranty insurance may be transacted in this state only by a stock or mutual casualty insurer holding a certificate of authority for the transaction of the insurance pursuant to this chapter, and shall be written only to insure either of the following: (1) Loans secured by first liens on authorized real estate securities not exceeding, at the time the loan is made, 103 percent of the fair market value of the authorized real estate security, as defined in subparagraph (A) of paragraph (1) of subdivision (b) of Section 12640.02. (2) Loans secured by junior liens, as defined in subparagraph (B) of paragraph (1) of subdivision (b) of Section 12640.02. (b) Any reciprocal insurer engaging in this type of business shall be bound by all provisions of this chapter, including the requirements as to paid-in capital and paid-in surplus. (Amended by Stats. 2002, Ch. 429, Sec. 2. Effective January 1, 2003.)
  31. 12640.08.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer must not insure loans on properties in a single housing tract or contiguous tract if the risk exceeds 10% of policyholders surplus.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.08. A mortgage guaranty insurer shall not insure loans secured by properties in a single housing tract or a contiguous tract in excess of ten (10) percent of the insurer’s policyholders surplus. In determining the amount of such risk, applicable reinsurance in any assuming insurer authorized to transact mortgage guaranty insurance in this State shall be deducted from the total direct risk insured. “Contiguous,” for the purposes of this section, means not separated by more than one-half mile. (Added by Stats. 1961, Ch. 719.)
  32. 12640.09.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    Mortgage guaranty insurers must keep coverage within stated risk limits, and lenders must disclose when borrowers pay the insurance cost.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.09. (a) A mortgage guaranty insurer shall limit its coverage for the class of insurance defined in paragraph (3) of subdivision (a) of Section 12640.02 to no more than a net of 30 percent at risk of the entire indebtedness to the insured or, a mortgage guaranty insurer may elect to pay the entire indebtedness to the insured and acquire title to the authorized real estate security. (b) (1) A mortgage guaranty insurer shall limit its coverage for the class of insurance defined in paragraph (2) of subdivision (a) of Section 12640.02, to no more than a net of 30 percent of risk of the combined indebtedness of all existing mortgage loan amounts secured by all liens or charges on the real estate. Instead, a mortgage guaranty insurer may elect to pay the entire indebtedness to the insured and acquire title to the authorized real estate security. (2) Notwithstanding paragraph (1), a mortgage guaranty insurer may elect to insure a portfolio of loans secured by instruments constituting junior liens on real estate, if the total amount at risk in any one portfolio shall not at any time exceed 20 percent of the original principal amount of mortgage loans secured by junior liens. (3) If the borrower is required to pay the cost of insurance written under paragraph (1) or (2), the lender shall disclose in writing to the borrower that the borrower is not a party to or a beneficiary of the mortgage guaranty insurance policy. (4) Notwithstanding subdivision (a) and paragraph (1) of subdivision (b), if Freddie Mac or Fannie Mae increases the required amount of mortgage guaranty insurance, the commissioner may adopt regulations to increase the maximum coverage limitation of a mortgage guaranty insurer to an amount not to exceed a net of 35 percent of risk of the entire indebtedness. (c) Notwithstanding subdivision (a) or (b), a mortgage guaranty insurer may extend its coverage for the class of insurance defined in paragraphs (2) and (3) of subdivision (a) of Section 12640.02 beyond the limits established by subdivisions (a) and (b) of this section, if the excess is insured by a contract of reinsurance. (d) (1) Notwithstanding any law to the contrary, mortgage guaranty insurance or reinsurance may be ceded by contract, if the assuming insurer is either of the following: (A) A mortgage guaranty insurer, which may be under common control with the ceding mortgage guaranty insurer, but which does not own, and is not owned by, in whole or in part, directly or indirectly, the ceding mortgage guaranty insurer. (B) An insurer or reinsurer, that may be under common control with the ceding mortgage guaranty insurer, but that is not owned by, in whole or in part, directly or indirectly, the ceding mortgage guaranty insurer or another mortgage guaranty insurer, that writes any type or types of insurance or reinsurance and that meets the following requirements: (i) Has paid-in capital and paid-in surplus totaling at least thirty-five million dollars ($35,000,000). (ii) Derives, on an annual basis, at least 50 percent of its premium income from reinsurance; or, alternatively, derives at least twenty-five million dollars ($25,000,000) of premium income per year from reinsurance. (iii) Establishes and maintains its share of the reserve liabilities required by Section 12640.16 if licensed in this state, or establishes, maintains, and funds in accordance with Section 922.4 or 922.5, its share of the reserve liabilities required by Section 12640.16 if not licensed in this state. (iv) Establishes and maintains its share of an amount equal to the greater of either the reserve liabilities required by Section 12640.04 or the policyholders surplus required by Section 12640.05 in a segregated trust which meets the requirements of Section 12640.091. (2) This section does not permit the assuming insurer or reinsurer to directly write mortgage guaranty insurance. (3) Any assuming insurer or reinsurer and the ceding mortgage guaranty insurer shall establish and maintain in the aggregate the reserves required by Sections 12640.04 and 12640.16. (e) This section does not apply to the California Housing Loan Insurance Fund or to any program it may develop in conjunction with any federal or federally sponsored mortgage lender or insurer. (Amended (as amended by Stats. 2012, Ch. 105, Sec. 1) by Stats. 2016, Ch. 62, Sec. 1. (AB 1645) Effective January 1, 2017.)
  33. 12640.091.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    A trust must satisfy listed conditions to qualify as a segregated trust, including asset location, funding, control of withdrawals, commissioner examination, and timely filings.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.091. (a) In order to qualify as a segregated trust under subdivision (d) of Section 12640.09, a trust shall meet all of the following requirements: (1) Be established by an insurer or reinsurer for the benefit of the ceding mortgage guaranty insurer. (2) Have the trust assets located in the mortgage guaranty insurer’s state of domicile, in the State of California, or in another jurisdiction which is approved by the commissioner. (3) Be funded by assets permitted by Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1, or by tax and loss bonds purchased pursuant to Section 832(e) of the Internal Revenue Code. (4) Be subject to withdrawals only by, and under the control of, the ceding mortgage guaranty insurer provided that written notification with adequate supporting documentation is filed with the commissioner within 15 calendar days after the withdrawal. (5) Consent to and be subject to examination by the commissioner. (6) Appoint an agent for service of process in the State of California and file the appointment with the commissioner within 30 calendar days after the effective date. (b) The trust agreement and any amendments to it shall be filed with the commissioner within 30 calendar days after its effective date. The commissioner may order a prospectively applicable modification, correction, disapproval, or termination of any trust arrangement, agreement, or amendment which fails to meet the requirements set forth in this chapter. Any order of the commissioner shall be in writing and shall specify the reasons for the modifications, corrections, disapproval, or termination. (c) The ceding mortgage guaranty insurer shall make quarterly, annual, and interim reports on the segregated trust account at the time as they are required or requested by the commissioner on forms prescribed by the commissioner. (d) The commissioner may adopt rules and regulations necessary to carry out the provisions of this section including appropriate rules or regulations to assure that the trust assets are legally segregated, reasonably liquid, secure, and accessible. (Added by Stats. 1990, Ch. 772, Sec. 3.)
  34. 12640.095.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer may reinsure with a specified type of reinsurer, or with another insurer that has written permission from the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.095. A mortgage guaranty insurer transacting the class of insurance defined in paragraph (2) of subdivision (a) of Section 12640.02 may reinsure with either the type of reinsurer defined in subdivision (d) of Section 12640.09, or, any other insurer which has received written permission from the commissioner to write the type of insurance defined in paragraph (2) of subdivision (a) of Section 12640.02. (Added by Stats. 1982, Ch. 1084, Sec. 4.)
  35. 12640.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    This section limits when an insurer can get or renew authority to sell mortgage guaranty insurance, and requires segregated accounting if the insurer also writes other insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.10. (a) An insurer that anywhere transacts any class of insurance other than mortgage guaranty insurance defined in paragraphs (1), (3), and (4) of subdivision (a) of Section 12640.02 is not eligible for the issuance of a certificate of authority to transact those classes of mortgage guaranty insurance in this state nor for the renewal thereof. An insurer with a certificate of authority to transact the business of credit insurance in this state may also transact the business of mortgage guaranty insurance as defined in paragraph (2) of subdivision (a) of Section 12640.02, provided the insurer has received the written permission of the commissioner. (b) An insurer that anywhere transacts the classes of insurance defined in paragraphs (2), (3), and (4) of subdivision (a) of Section 12640.02 is not eligible for the issuance of a certificate of authority to transact in this state the class of mortgage guaranty insurance defined in paragraph (1) of subdivision (a) of Section 12640.02. (c) An insurer authorized to transact the class of insurance defined in paragraph (2) of subdivision (a) of Section 12640.02 shall maintain segregated accounts with respect to that insurance in the following manner if it anywhere transacts any other class of insurance: (1) The minimum paid in capital and surplus required by Section 12640.03 and the reserves required to be established pursuant to Sections 12640.04 and 12640.16 shall be contributed to and maintained in the account. (2) The income and assets attributable to the segregated account shall continuously remain identifiable with the particular account, but, unless the commissioner so orders, the assets need not be kept physically separate from other assets of the insurer. The income, gains, and losses, whether or not realized, from assets attributable to the segregated account shall be credited to or charged against the account without regard to other income, gains, or losses of the insurer. (3) Assets attributable to the segregated account shall not be chargeable with any liabilities arising out of any other business of the insurer, and any assets not attributable to the account shall not be chargeable with any liabilities arising out of it. (4) The segregated account shall be deemed an insurer for purposes of any proceedings in cases of insolvency and delinquency instituted, pursuant to applicable provisions of this code; provided, however, that account shall not be subject to the provisions of Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1. (5) Assets allocated to the segregated account are the property of the insurer, which shall not hold itself out to be a trustee of the assets. (6) An insurer may own a particular asset in determinate proportions for that segregated account or for its general account. (7) An insurer may, by an identifiable act, transfer assets for fair consideration between its segregated account and its general account. (d) The written permission described in subdivision (a) shall be obtained by filing an application with the commissioner on a form prescribed by the commissioner accompanied by any additional information concerning the insurer, its conditions, and affairs, as the commissioner may require. A fee of two thousand two hundred forty-one dollars ($2,241) shall be paid in advance to the department for the filing of the application. (Amended by Stats. 2017, Ch. 534, Sec. 83. (AB 1699) Effective January 1, 2018.)
  36. 12640.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer may impose reasonable requirements on a lender, and certain application statements are treated as representations rather than warranties.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 4. Limitations and Restrictions for Transacting Business [12640.07 - 12640.11] ( Article 4 added by Stats. 1961, Ch. 719. ) ## 12640.11. (a) Nothing in this chapter (commencing with Section 12640.01) shall be construed as limiting the right of any mortgage guaranty insurer to impose reasonable requirements upon the lender with regard to the terms of any note or bond or other evidence of indebtedness secured by a mortgage or deed of trust, such as requiring a stipulated down payment by the borrower. (b) All statements and descriptions in any application for mortgage guaranty insurance or in negotiations for that insurance, and all documents relating thereto, submitted to the mortgage guaranty insurer shall be deemed to be representations and not warranties. Furthermore, misrepresentations and incorrect or incomplete statements in any such application, negotiations, and all documents relating thereto shall not prevent a recovery under a policy of mortgage guaranty insurance unless: (1) Fraudulent; or (2) Material either to the acceptance of the risk or to the hazard assumed by the insurer; or (3) The insurer in good faith would either not have issued the mortgage guaranty insurance policy or extended coverage thereunder, or would not have issued the policy or extended coverage in as large an amount or at the premium rate as applied for or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been known to the insurer as required by the application for the policy or for the extension of coverage or otherwise. (Amended by Stats. 1985, Ch. 1476, Sec. 1.)
  37. 12640.12.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. )

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    Every mortgage guaranty insurer must adopt, print, and make available a premium charge schedule.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. ) ## 12640.12. Every mortgage guaranty insurer shall adopt, print and make available a schedule of premium charges for mortgage guaranty insurance policies. The schedule shall show the entire amount of premium charge for each type of mortgage guaranty insurance policy issued by the insurer. (Added by Stats. 1961, Ch. 719.)
  38. 12640.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer may not pay commissions or similar consideration to certain agents or representatives of an owner or mortgagee, except for specified secondary mortgage market activities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. ) ## 12640.13. (a) No mortgage guaranty insurer shall pay to any person who is acting as agent, representative, attorney or employee of the owner, mortgagee of the prospective owner, or mortgagee of the real property or any interest therein, either directly or indirectly, any commission, or any part of its premium charges or any other consideration as an inducement for or as compensation on any mortgage guaranty insurance business. (b) Notwithstanding subdivision (a), or the provisions of Section 751, activities of mortgage guaranty insurers in dealing with the secondary mortgage market, which are made available to the mortgage lending industry, whether insureds or not, shall not be deemed to be unlawful rebates or commissions. Included, but not limited to such activities, are the following: (1) Services provided for the purpose of assisting in the purchase or sale of mortgage loans in the secondary market. (2) Preparation of forms necessary for the sale of mortgage loans in the secondary mortgage market. (3) Educational seminars dealing with issues affecting the mortgage lending industry. (Amended by Stats. 1981, Ch. 419, Sec. 1.)
  39. 12640.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer must not give rebates of premium charges or quote a premium lower than the current schedule or the price available to others for the same policy type.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. ) ## 12640.14. No mortgage guaranty insurer shall make any rebate of any portion of the premium charge shown by the schedule required by Section 12640.12. No mortgage guaranty insurer shall quote any premium charge to any person which is less than that currently available to others for the same type of mortgage guaranty insurance policy. The amount by which any premium charge is less than that called for by the current schedule of premium charges is an unlawful rebate. (Added by Stats. 1961, Ch. 719.)
  40. 12640.145.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. )

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    A mortgage guaranty insurer must not pay commission-based compensation for transacting insurance unless the person is licensed and subject to the listed chapter’s provisions and restrictions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. ) ## 12640.145. No mortgage guaranty insurer shall pay any compensation to any person for transacting insurance for or with it based in whole or in part upon a commission basis unless such person is licensed pursuant to and subject to all the provisions of and restrictions in Chapter 5, Part 2, Division 1 of this code. This section shall not be construed so as to affect the meaning of any other provisions of this article. (Added by Stats. 1963, Ch. 1284.)
  41. 12640.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. )

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    The commissioner may, after a hearing and 10 days’ written cease-and-desist notice, suspend or revoke a mortgage guaranty insurer’s certificate of authority if the insurer keeps paying commissions or making unlawful rebates in willful violation of this article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 5. Rebates and Commissions [12640.12 - 12640.15] ( Article 5 added by Stats. 1961, Ch. 719. ) ## 12640.15. The commissioner may after a hearing suspend or revoke the certificate of authority of any mortgage guaranty insurer which, after 10 days written notice from the commissioner requiring it to cease and desist, continues to pay any commission or to make any unlawful rebate in willful violation of the provisions of this article (commencing with Section 12640.12). The hearings of the commissioner shall be conducted in accordance with the Administrative Procedure Act, Chapter 5, Part 1, Division 3, Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (Added by Stats. 1961, Ch. 719.)
  42. 12640.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 6. Financial Statements [12640.16- 12640.16.] ( Article 6 added by Stats. 1961, Ch. 719. )

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    Mortgage guaranty insurers are subject to financial-statement rules, must compute reserves under specified methods, and the commissioner may set standards for some reserve calculations after hearings.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 6. Financial Statements [12640.16- 12640.16.] ( Article 6 added by Stats. 1961, Ch. 719. ) ## 12640.16. (a) The provisions of Article 10 (commencing with Section 900), Chapter 1, Part 2, Division 1, relating to financial statements, shall apply to mortgage guaranty insurers. (b) The unearned premium reserve shall be computed in accordance with the other applicable sections of this code, except that on all policies covering a risk period of more than one year the unearned premium reserve shall be computed in accordance with standards promulgated by the commissioner after appropriate hearings. (c) In addition to the contingency reserve required under Section 12640.04, the case basis method shall be used to determine the loss reserve, which shall include a reserve for claims reported and unpaid and claims incurred but not reported, including: (i) Estimated losses on insured loans which have resulted in the conveyance of property which remains unsold. (ii) Insured loans in the process of foreclosure. (iii) Insured loans in default for four or more months. (Added by Stats. 1961, Ch. 719.)
  43. 12640.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 7. Applicability of Other Laws [12640.17- 12640.17.] ( Article 7 added by Stats. 1961, Ch. 719. )

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    This section says the applicable provisions of the insurance code and other California statutes apply to the business authorized by this chapter, except where they conflict with the chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 7. Applicability of Other Laws [12640.17- 12640.17.] ( Article 7 added by Stats. 1961, Ch. 719. ) ## 12640.17. All the applicable provisions of this code and of other statutes of this state, except as the same may be in conflict herewith, shall apply to the operation and conduct of the business authorized by this chapter. (Amended by Stats. 1973, Ch. 77.)
  44. 12640.18.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 8. Additional Powers of Commissioner [12640.18- 12640.18.] ( Article 8 added by Stats. 1961, Ch. 719. )

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    The commissioner may adopt reasonable rules and regulations needed to carry out this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 8. Additional Powers of Commissioner [12640.18- 12640.18.] ( Article 8 added by Stats. 1961, Ch. 719. ) ## 12640.18. The commissioner may adopt, pursuant to Chapter 3.5 (commencing with Section 11340 ) of Part 1 of Division 3 of Title 2 of the Government Code, such reasonable rules and regulations as may be necessary to carry out the provisions of this chapter, including, but not limited to, appropriate restrictions as to investments, giving full consideration to the desirability of high liquidity. (Amended by Stats. 1982, Ch. 454, Sec. 126.)
  45. 12640.19.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 9. Advertising [12640.19- 12640.19.] ( Article 9 added by Stats. 1961, Ch. 719. )

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    Banks, savings and loan associations, and insurance companies cannot advertise their real estate loans as “insured loans” unless they also say the loans are insured by private insurers, name those insurers, and the insurance is from an insurer certificated to write in the state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 9. Advertising [12640.19- 12640.19.] ( Article 9 added by Stats. 1961, Ch. 719. ) ## 12640.19. No bank, savings and loan association or insurance company, any of whose authorized real estate securities are insured by mortgage guaranty insurance pursuant to this chapter (commencing with Section 12640.01) may state in any brochure, pamphlet, report or any form of advertising that the real estate loans of the bank, savings and loan association or insurance company are “insured loans” unless the brochure, pamphlet, report or advertising also clearly states that the loans are insured by private insurers and the names of the private insurers are given and shall not make any such statement at all unless such insurance is by an insurer certificated to write in this State. (Added by Stats. 1961, Ch. 719.)
  46. 12640.20.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 10. Fees [12640.20- 12640.20.] ( Article 10 added by Stats. 1981, Ch. 1131, Sec. 23. )

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    The commissioner must collect an upfront $472 fee from each mortgage guaranty insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 2A. Mortgage Guaranty Insurance [12640.01 - 12640.20] ( Chapter 2A added by Stats. 1961, Ch. 719. ) ## ARTICLE 10. Fees [12640.20- 12640.20.] ( Article 10 added by Stats. 1981, Ch. 1131, Sec. 23. ) ## 12640.20. The commissioner shall collect in advance a fee of four hundred seventy-two dollars ($472) from each mortgage guaranty insurer for the examination and analysis of the reinsurance contracts, final prospectus, and private placement memorandum filed with the commissioner after the issuance of a pool insurance policy. (Amended by Stats. 1985, Ch. 770, Sec. 26.5.)
  47. 12660.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Land Value Insurance [12660 - 12661] ( Chapter 3 enacted by Stats. 1935, Ch. 145. )

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    This section makes it a public offense to engage in, solicit, negotiate for, or help the business of guaranteeing or insuring land values in this state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Land Value Insurance [12660 - 12661] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## 12660. Any person who in this state engages in the business of guaranteeing or insuring land values, or who solicits or negotiates in this state for the purpose of, or in any manner aids, any person within or without this state to engage in such business, is guilty of a public offense and punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not exceeding one year, or by fine not exceeding ten thousand dollars ($10,000), or by both that fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 219. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  48. 12661.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Land Value Insurance [12660 - 12661] ( Chapter 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may suspend, revoke, or deny a license or certificate if the applicant, licensee, or certificate holder committed an act covered by section 12660.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6. INSURANCE COVERING LAND [12340 - 12661] ( Part 6 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 3. Land Value Insurance [12660 - 12661] ( Chapter 3 enacted by Stats. 1935, Ch. 145. ) ## 12661. The commissioner may suspend or revoke or may deny any license or certificate issued under any provision of this code in any case where the applicant or licensee or certificate holder has committed an act denounced by section 12660. (Repealed and added by Stats. 1939, Ch. 936.)
  49. 12670.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    The section says certain coverage providers and insurers must make conversion policies available, and the defined entities must also make continuation benefits available to specified former covered persons.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12670. It is the intent of the Legislature to ensure that persons covered by a group policy, who become ineligible for that coverage have access to benefits pursuant to this part by requiring employers, employee organizations, and other entities that provide that coverage to their employees or members to also make available conversion policies for those persons and to ensure that insurers as herein defined offer conversion policies. The conversion policy shall be the most popular preferred provider organization product offered to residents of this state under the provisions of the federal Health Insurance Portability and Accountability Act of 1996. In addition, it is the intent of the Legislature to encourage the continuation of group health coverage by requiring the entities herein defined to make available continuation benefits for widows, widowers, divorced spouses, and dependents who were covered by the group policy on the date of termination of coverage. (Amended by Stats. 2002, Ch. 799, Sec. 1. Effective January 1, 2003. Operative September 1, 2003, by Sec. 5 of Ch. 799.)
  50. 12671.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    This section defines several terms used in Part 6.1 of the Insurance Code, including group policy, conversion coverage, insurer, insurance, policyholder, premium, Medicare, and related ERISA and governmental plan terms.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12671. As used in this part, the following terms have the following meanings: (a) “Group policy” means a group health insurance policy providing medical, hospital, surgical, major medical, or comprehensive medical coverage issued by an insurer, a group contract issued by a hospital service corporation, or medical, hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members, except for self-insurance programs provided by employers that are not exempt from the federal Employee Retirement Income Security Act of 1974 (ERISA), as specified in subdivision (i). For the purposes of this part, a group policy not having an established annual renewal date shall be considered renewed on each anniversary of its effective date. (b) “Conversion coverage” means health insurance benefits providing hospital, surgical, major medical, or comprehensive medical coverage issued to an individual under a converted policy. (c) “Converted policy” means a policy or contract providing conversion coverage issued by an insurance company or by a hospital service corporation, or individual hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members. (d) “Insurer” means the entity issuing a group policy, an individual or converted policy, a hospital service contract or an employer or employee organization otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage to its employees or members. (e) “Insurance” refers to health insurance, major medical, or comprehensive coverage paid by premium or contribution under a group policy, a hospital service contract, or as otherwise provided by a policyholder to its employees or members other than by self-insuring except in the case of a plan that is exempt from ERISA, but does include an employer plan that is exempt from ERISA as specified in subdivision (i). “Insurance” does not include any of the following: (1) Coverage provided solely as an accrued liability or by reason of a disability extension. (2) Medicare supplement insurance. (3) Vision-only insurance. (4) Dental-only insurance. (5) CHAMPUS supplement insurance. (6) Hospital indemnity insurance. (7) Accident-only insurance. (8) Short-term limited duration health insurance. “Short-term limited duration health insurance” means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage. (9) Specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis. (f) “Policyholder” means the holder of a group policy issued by an insurer, a holder of a group contract issued by a hospital service corporation or an employer, employee association, or other entity otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage on a group basis to its employees or members. (g) “Premium” means contribution or other consideration paid or payable for coverage under a group policy or converted policy. (h) “Medicare” means Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded. (i) “Employer plan that is exempt from ERISA” means an employer plan that, pursuant to Section 1003 of Title 29 of the United States Code, is not covered by or that is exempt from Subchapter I (commencing with Section 1001) of Chapter 18 of Title 29 of the United States Code, except that, in the case of a governmental plan, it only includes a self-insured governmental plan as defined in subdivision (j). (j) “Self-insured governmental plan” means a self-insured plan established or maintained for its employees by a public entity, as defined in Section 811.2 of the Government Code, that is a governmental plan as defined in subdivision (32) of Section 1002 of Title 29 of the United States Code. (Amended by Stats. 2018, Ch. 687, Sec. 13. (SB 910) Effective January 1, 2019.)
  51. 12672.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    Certain terminated group health coverage members are entitled to a converted policy from the insurer, without evidence of insurability, if the group policy meets the section’s conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12672. (a) Any group policy issued, amended, or renewed in this state on or after January 1, 1983, which provides insurance for employees or members on an expense-incurred or service basis, other than for a specific disease or for accidental injuries only, shall contain a provision that an employee or member whose coverage under the group policy has been terminated for any reason except as provided in this part, shall be entitled to have a converted policy issued to him or her by the insurer under whose group policy he or she was covered, without evidence of insurability, subject to the terms and conditions of this part. (b) (1) This section shall be inoperative on January 1, 2014. (2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this section shall become operative on the date of that repeal or amendment. (3) For purposes of this subdivision, “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. (Amended by Stats. 2013, Ch. 441, Sec. 23. (AB 1180) Effective October 1, 2013. Inoperative, by its own provisions, on January 1, 2014, subject to condition for resuming operation.)
  52. 12673.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    Conversion coverage must be made available to an employee or member unless one of the stated termination or eligibility exceptions applies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12673. Conversion coverage shall be required to be made available to an employee or member unless such coverage under the group policy terminates for one or more of the following reasons: (a) The group policy or the policyholder’s participation in the group policy terminates and the insurance is replaced by similar coverage under another group policy within 60 days of the date of termination of the group coverage or the policyholder’s participation. (b) The employee or member has failed to make any required payment of the premium or contribution when due. (c) The employee or member had not been continuously covered during the three-month period immediately preceding the employee’s or member’s termination of coverage. (Amended by Stats. 1982, Ch. 1186, Sec. 5.)
  53. 12674.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    A converted policy must be issued to take effect the day after group coverage ends if the application and first premium are submitted to the insurer within 31 days, unless the insurer waives those requirements in writing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12674. A converted policy shall be issued effective on the day following the termination of coverage under the group policy if written application and the first premium payment for the conversion policy are made to the insurer not later than 31 days after the termination of insurance, unless such requirements are waived in writing by the insurer. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  54. 12675.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    The premium for conversion coverage must be set using the insurer’s rates for the covered person’s age and class of risk, and the type and amount of coverage provided.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12675. The premium for the conversion coverage shall be determined in accordance with the insurer’s rates applicable to the age and class of risk of each person to be covered and to the type and amount of coverage provided. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  55. 12676.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    Conversion coverage must include the employee or member and covered dependents. The insurer may also issue a separate converted policy for any dependent.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12676. The conversion coverage shall cover the employee or member and his or her dependents who were covered by the group policy on the date of termination of coverage. At the option of the insurer, a separate converted policy may be issued to cover any dependent. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  56. 12677.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    An insurer does not have to issue a converted policy for a person who is entitled to Medicare coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12677. The insurer shall not be required to issue a converted policy covering any person if such person is entitled to be covered by Medicare. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  57. 12678.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    An insurer does not have to issue a converted policy to a person if that person already has, or can get, similar benefits through another individual policy, group policy, or group coverage arrangement.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12678. The insurer shall not be required to issue a converted policy covering any person if any of the following exists: (a) The person is covered for similar benefits by another individual policy. (b) The person is covered or is eligible to be covered for similar benefits by another group policy. (c) The person is covered or is eligible to be covered for similar benefits under any arrangement of coverage for persons in a group whether insured or uninsured. (Amended by Stats. 2002, Ch. 799, Sec. 3. Effective January 1, 2003. Operative September 1, 2003, by Sec. 5 of Ch. 799.)
  58. 12679.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    A converted policy may let the insurer ask covered persons for information about similar benefits, and the insurer may refuse to renew only for specified reasons.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12679. A converted policy may provide that the insurer may at any time request information from any person covered thereunder as to whether he or she is covered for the similar benefits described in Section 12678. The converted policy shall provide that as of any premium due date the insurer may refuse to renew the policy or the coverage of any insured person for the following reasons only: (a) Failure of the individual covered by the converted policy to provide the requested information. (b) Fraud or material misrepresentation by the individual covered by the converted policy in applying for any benefits under the converted policy. (c) Eligibility of the individual covered by the converted policy for coverage under Medicare or under any other state or federal law providing for benefits similar to those provided by the converted policy. As used in this section, “state or federal law” does not include Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, or Title XIX of the United States Social Security Act. (d) Nonpayment of premium. (e) Coverage of the individual for similar benefits under another individual policy. (f) Eligibility of the individual covered by the converted policy for coverage under any arrangement for coverage for persons in a group whether insured or uninsured. (g) Other reasons approved by the Insurance Commissioner. (Amended by Stats. 1982, Ch. 1186, Sec. 7.5.)
  59. 12680.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    An insurer may limit conversion benefits when the person also receives benefits under Section 12678, so the combined benefits do not exceed 100% of covered benefit charges.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12680. If conversion coverage is issued and benefits are also provided to a person under Section 12678, the insurer may limit the conversion benefits provided or available for such person so that such conversion benefits together with benefits provided or available from the sources referred to in Section 12678 shall not exceed 100 percent of the charges for covered benefits. Priority of any coverages involved shall be determined by the effective dates, the earlier one being first. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  60. 12681.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    An insurer is not required to issue a converted policy that provides benefits beyond those in the group policy being converted.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12681. An insurer shall not be required to issue a converted policy providing benefits in excess of those provided under the group policy from which conversion is made. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  61. 12682.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    A converted policy may not exclude covered group-policy conditions as preexisting conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12682. The converted policy shall not exclude, as a preexisting condition, any condition covered by the group policy. The converted policy may provide for a reduction of its benefits by the amount of any such benefits payable under the group policy after the individual’s insurance terminates thereunder. The converted policy may also provide that during the first policy year the benefits payable under the converted policy, together with the benefits payable under the group policy, shall not exceed those that would have been payable had the individual’s coverage under the group policy remained in effect. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  62. 12682.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    This section lets certain employees or members convert terminated group coverage to nongroup membership, and it sets insurer, employer, and application/payment requirements for conversion coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12682.1. This section does not apply to a policy that primarily or solely supplements Medicare. The commissioner may adopt rules consistent with federal law to govern the discontinuance and replacement of plan policies that primarily or solely supplement Medicare. (a) (1) Every group policy entered into, amended, or renewed on or after September 1, 2003, that provides hospital, medical, or surgical expense benefits for employees or members shall provide that an employee or member whose coverage under the group policy has been terminated by the employer shall be entitled to convert to nongroup membership, without evidence of insurability, subject to the terms and conditions of this section. (2) If the health insurer provides coverage under an individual health insurance policy, other than conversion coverage under this part, it shall offer one of the two health insurance policies that the insurer is required to offer to a federally eligible defined individual pursuant to Section 10785. The health insurer shall provide this coverage at the same rate established under Section 10901.3 for a federally eligible defined individual. (3) If the health insurer does not provide coverage under an individual health insurance policy, it shall offer a health benefit plan contract that is the same as a health benefit contract offered to a federally eligible defined individual pursuant to Section 1366.35. The health insurer shall offer the most popular preferred provider organization plan that has the greatest number of enrolled individuals for its type of plan as of January 1 of the prior year, as reported by plans by January 31, 2003, and annually thereafter, that provide coverage under an individual health care service plan contract to the department or the Department of Managed Health Care. A health insurer subject to this paragraph shall provide this coverage with the same cost-sharing terms and at the same premium as a health care service plan providing coverage to that individual under an individual health care service plan contract pursuant to Section 1399.805. The health insurer shall file the health benefit plan contract it will offer, including the premium it will charge and the cost-sharing terms of the contract, with the Department of Insurance. (b) A conversion policy shall not be required to be made available to an employee or insured if termination of his or her coverage under the group policy occurred for any of the following reasons: (1) The group policy terminated or an employer’s participation terminated and the insurance is replaced by similar coverage under another group policy within 15 days of the date of termination of the group coverage or the employer’s participation. (2) The employee or insured failed to pay amounts due the health insurer. (3) The employee or insured was terminated by the health insurer from the policy for good cause. (4) The employee or insured knowingly furnished incorrect information or otherwise improperly obtained the benefits of the policy. (5) The employer’s hospital, medical, or surgical expense benefit program is self-insured. (c) A conversion policy is not required to be issued to any person if any of the following facts are present: (1) The person is covered by or is eligible for benefits under Title XVIII of the United States Social Security Act. (2) The person is covered by or is eligible for hospital, medical, or surgical benefits under any arrangement of coverage for individuals in a group, whether insured or self-insured. (3) The person is covered for similar benefits by an individual policy or contract. (4) The person has not been continuously covered during the three-month period immediately preceding that person’s termination of coverage. (d) Benefits of a conversion policy shall meet the requirements for benefits under this chapter. (e) Unless waived in writing by the insurer, written application and first premium payment for the conversion policy shall be made not later than 63 days after termination from the group. A conversion policy shall be issued by the insurer which shall be effective on the day following the termination of coverage under the group contract if the written application and the first premium payment for the conversion contract are made to the insurer not later than 63 days after the termination of coverage, unless these requirements are waived in writing by the insurer. (f) The conversion policy shall cover the employee or insured and his or her dependents who were covered under the group policy on the date of their termination from the group. (g) A notification of the availability of the conversion coverage shall be included in each evidence of coverage or other legally required document explaining coverage. However, it shall be the sole responsibility of the employer to notify its employees of the availability, terms, and conditions of the conversion coverage which responsibility shall be satisfied by notification within 15 days of termination of group coverage. Group coverage shall not be deemed terminated until the expiration of any continuation of the group coverage. For purposes of this subdivision, the employer shall not be deemed the agent of the insurer for purposes of notification of the availability, terms, and conditions of conversion coverage. (h) As used in this section, “hospital, medical, or surgical benefits under state or federal law” do not include benefits under Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, or Title XIX of the United States Social Security Act. (i) (1) On and after January 1, 2014, and except as provided in paragraph (2), this section shall not apply to any health insurance policies. (2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Section 300gg-91), paragraph (1) shall become inoperative on the date of that repeal or amendment and this section shall apply to health insurance policies issued, renewed, or amended on or after that date. (3) For purposes of this subdivision, “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. (Amended by Stats. 2013, Ch. 441, Sec. 24. (AB 1180) Effective October 1, 2013.)
  63. 12682.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    Some insurers must send a required notice to certain individual health policyholders at least 60 days before renewal, and the commissioner must adopt model notices by September 1, 2013.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12682.2. (a) (1) At least 60 days prior to the policy renewal date, an insurer that does not otherwise issue individual health insurance policies shall issue the notice described in paragraph (2) to any policyholder of an individual health insurance policy issued pursuant to Section 12682.1 that is not a grandfathered health plan. (2) The notice shall be in at least 12-point type and shall include all of the following information: (A) Notice that, as of the renewal date, the individual policy will not be renewed. (B) The availability of individual health coverage through Covered California, including at least all of the following: (i) That, beginning on January 1, 2014, individuals seeking coverage may not be denied coverage based on health status. (ii) That the premium rates for coverage offered by a health care service plan or a health insurer cannot be based on an individual’s health status. (iii) That individuals obtaining coverage through Covered California may, depending upon income, be eligible for premium subsidies and cost-sharing subsidies. (iv) That individuals seeking coverage must obtain this coverage during an open or special enrollment period, and describe the open and special enrollment periods that may apply. (b) (1) At least 60 days prior to the policy renewal date, an insurer that issues individual health insurance policies shall issue the notice described in paragraph (2) to a policyholder of an individual health insurance policy issued pursuant to Section 10785 or 12682.1 that is not a grandfathered health plan. (2) The notice shall be in at least 12-point type and shall include all of the following: (A) Notice that, as of the renewal date, the individual policy shall not be renewed. (B) Information regarding the individual health insurance policy that the insurer will issue as of January 1, 2014, which the insurer has reasonably concluded is the most comparable to the individual’s current policy. The notice shall include information on premiums for the possible replacement policy and instructions that the individual can continue their coverage by paying the premium stated by the due date. (C) Notice of the availability of other individual health coverage through Covered California, including at least all of the following: (i) That, beginning on January 1, 2014, individuals seeking coverage may not be denied coverage based on health status. (ii) That the premium rates for coverage offered by a health care service plan or a health insurer cannot be based on an individual’s health status. (iii) That individuals obtaining coverage through Covered California may, depending upon income, be eligible for premium subsidies and cost-sharing subsidies. (iv) That individuals seeking coverage must obtain this coverage during an open or special enrollment period, and describe the open and special enrollment periods that may apply. (c) No later than September 1, 2013, the commissioner, in consultation with the Department of Managed Health Care, shall adopt uniform model notices that health insurers shall use to comply with subdivisions (a) and (b) and Sections 10127.16, 10786, and 10965.13. Use of the model notices shall not require prior approval by the department. The model notices adopted for purposes of this section 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 commissioner may modify the wording of these model notices specifically for purposes of clarity, readability, and accuracy. (d) The notices required under this section are vital documents, pursuant to clause (iii) of subparagraph (B) of paragraph (1) of subdivision (b) of Section 10133.8, and shall be subject to the requirements of that section. (e) 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 any rules, regulations, or guidance issued pursuant to that law. (Added by Stats. 2013, Ch. 441, Sec. 25. (AB 1180) Effective October 1, 2013.)
  64. 12683.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    An eligible employee or member may obtain a converted policy with specified minimum benefits, including hospital, miscellaneous hospital, and surgical coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12683. Subject to the provisions and conditions of this part, if the group policy from which conversion is made covers the employee or member for basic hospital or surgical expense, the employee or member shall be entitled to obtain a converted policy providing at least the following minimum benefits: (a) Plan A. (1) Hospital room and board daily expense benefits up to two hundred dollars ($200) for a duration of 70 days. (2) Miscellaneous hospital expense benefits up to an amount of 10 times the hospital room and board daily expense benefits. (3) Surgical expense benefits according to a surgical procedures schedule consistent with those customarily offered by the insurer under a group or individual health insurance policy and providing a maximum benefit of four thousand eight hundred dollars ($4,800). (b) Plan B—75 percent of the dollar amounts of Plan A. (c) Plan C—50 percent of the dollar amounts of Plan A. (d) The maximum dollar amount for Plan A’s hospital room and board daily expense and surgical benefit may be redetermined by the Insurance Commissioner as to conversion coverage issued subsequent to that redetermination. The redetermination shall not be made more often than once in three years. The maximum dollar amount redetermined by the commissioner for hospital room and board shall not exceed 80 percent of the average semiprivate room rate then charged in the state. (e) Covered expenses under this section shall include benefits for expense incurred by the employee, member, or spouse in connection with pregnancy, provided that: (1) The pregnancy commenced while covered under the group policy from which conversion was made. (2) The expense is of a type which would have been covered under such group policy. (3) The conversion policy is in force when the expense is incurred. (Amended by Stats. 1993, Ch. 1210, Sec. 10. Effective January 1, 1994.)
  65. 12684.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    An eligible employee or member can get a converted policy with comprehensive medical coverage if the group policy included major or comprehensive medical insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12684. Subject to the provisions and conditions of this part, if the group policy from which conversion is made provides the employee or member with major medical or comprehensive medical insurance, the employee or member shall be entitled to obtain a converted policy providing comprehensive medical coverage providing at least the following benefits: (a) A payment per covered person for all covered medical expenses incurred during the person’s lifetime equal to one hundred thousand dollars ($100,000); provided, however, that for treatment of mental illness payment may be limited to ten thousand dollars ($10,000) during the person’s lifetime. (b) Payment of benefits at the rate of 75 percent of covered medical expenses; provided, however, that if coverage is provided for expenses incurred for outpatient treatment of mental illness, payment of benefits may be at the rate of 50 percent of such covered expenses, and the insurer may limit the amount of covered expense for each outpatient visit and the amount of benefits payable for expenses incurred during each calendar year for that outpatient treatment. (c) A cash deductible for each benefit period at the option of the insured of two hundred dollars ($200), five hundred dollars ($500), or one thousand dollars ($1,000), but not less than the cash deductible which applied to the insured under the group policy which entitles him or her to a converted policy. (d) Covered medical expenses shall include the charges for a semiprivate hospital room and board, but need not exceed the lesser of two hundred dollars ($200) per day or the hospital’s most common charge for a semiprivate room, covered expenses for intensive care shall be at least two and one-half times the covered hospital room and board charge. The maximum dollar amount for hospital room and board daily covered expense may be redetermined by the commissioner as to conversion coverage issued after the redetermination. That redetermination shall not be made more often than once in three years. The maximum dollar amount redetermined by the commissioner shall not exceed the average semiprivate room rate then charged in the state. (e) Covered expenses under this section shall include benefits for expense incurred by the employee, member, or spouse in connection with pregnancy, provided that: (1) The pregnancy commenced while covered under the group policy from which conversion was made. (2) The expense is of a type which would have been covered under such group policy. (3) The conversion policy is in force when the expense is incurred. (f) Covered expense under this section need not include expense for dental or vision care, or other optional benefits not normally offered by the insurer under a major medical or comprehensive medical expense plan. (Amended by Stats. 1993, Ch. 1210, Sec. 11. Effective January 1, 1994.)
  66. 12685.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    An insurer may choose to offer alternative group health conversion plans in addition to the plans required by this part.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12685. The insurer may, at its option, offer alternative plans for group health conversion in addition to those required by this part. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  67. 12686.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    This section lets a retiring employee or member elect conversion rights instead of continuing group insurance, and makes conversion coverage available to certain covered dependents when coverage ends for specified reasons.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12686. (a) In the event coverage would be continued under a group policy on an employee or member following his or her retirement prior to the time he or she is or could be covered by Medicare, the employee or member may elect, in lieu of the continuation of group insurance, to have the same conversion rights as would apply had that coverage terminated at retirement by reason of termination of employment or membership. (b) The converted policy may provide for reduction or termination of coverage of any person upon his or her eligibility for coverage under Medicare or under any other state or federal law providing for benefits similar to those provided by the converted policy. As used in this section, “state or federal law” does not include Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, or Title XIX of the United States Social Security Act. (c) Subject to the conditions set forth herein, the conversion coverage shall also be available to: (1) A covered dependent spouse and such children whose coverage terminates under the group policy by reason of the death of the employee or member, or a covered dependent spouse in the event such person ceases to be a qualified family member by reason of the termination of the marriage. (2) A child, solely with respect to himself or herself, whose coverage terminates because the child ceases to be a qualified family member under the group policy. (d) If the benefit levels required in Section 12683 or Section 12684 exceed the benefit levels provided under the group policy, the converted policy may offer benefits which are substantially similar to those provided under the group policy in lieu of those required in Section 12683 or Section 12684. (e) The insurer may elect to provide conversion coverage through a group insurance policy issued for that purpose in lieu of an individual policy. (f) An insurer required by this part to provide conversion coverage may provide such coverage through one or more other insurers authorized to provide disability insurance coverage in this state. (Amended by Stats. 1982, Ch. 1186, Sec. 10.5.)
  68. 12687.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    An employee or member who chooses among two or more conversion policies must make that choice within 31 days after the last date they were eligible for benefits under the group policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12687. Notwithstanding any other provision in this part, whenever an employee or member chooses among two or more conversion policies, such choice shall be made within 31 days from the last date when the employee or member was eligible for benefits under a group policy from which conversion is available. (Amended by Stats. 1982, Ch. 1186, Sec. 11.)
  69. 12688.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

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    Some insurers and hospital service corporations may offer service-basis conversion coverage, if it is approved by the commissioner and complies with this part.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12688. Notwithstanding any provision in this part to the contrary, a hospital service corporation or any insurer which customarily offers individual conversion coverage on a service basis may, in lieu of the expense incurred conversion coverage provided in Sections 12683 and 12684, make available conversion coverage on a service basis which complies with the intent of this part as approved by the commissioner. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  70. 12689.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    Policyholders must notify employees or members about conversion coverage within 15 days after group coverage ends, and the notice must be included in required coverage documents.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12689. A notification of the conversion coverage shall be included in each certificate of coverage or other legally required document explaining coverage; provided, however, that it shall be the sole responsibility of the policyholder to notify its employees or members of the availability, terms and conditions of conversion coverage which responsibility shall be satisfied by notification within 15 days of termination of group coverage. Group coverage shall not be deemed terminated until the expiration of any continuation of the group coverage. For purposes of this part, the policyholder shall not be deemed to be the agent of the insurer for purposes of notification of the availability, terms and conditions of conversion coverage. (Amended by Stats. 1984, Ch. 914, first Sec. 5.)
  71. 12690.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    Insurers are not prohibited from establishing one or more pools for issuing converted policies under this part.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12690. Nothing in this part shall prohibit insurers from establishing one or more pools from which the converted policies provided for on this part may be issued. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  72. 12691.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    A converted policy delivered outside this state may be in the form allowed in that other jurisdiction.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12691. A converted policy which is delivered in a jurisdiction other than this state may be in a form which could be delivered in such jurisdiction as a converted policy had the group policy been issued in such jurisdiction. (Added by Stats. 1981, Ch. 1096, Sec. 2. Operative January 1, 1983, by Sec. 5 of Ch. 1096.)
  73. 12692.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    Certain insurers and nonprofit hospital service plans must offer continuation coverage under group disability insurance, and insurers must tell group and prospective group policyholders that the coverage is available.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12692. On and after January 1, 1985, every insurer and nonprofit hospital service plan issuing group disability insurance which covers hospital, medical, or surgical expenses shall offer to group policyholders a continuation benefit which, if selected, shall have a duration of at least 90 days and which shall be offered consecutively to any federal requirement for continuation benefits. The terms and conditions shall include continuation benefit coverage for widows, widowers, divorced or legally separated spouses, spouses of covered employees becoming entitled to benefits under Title XVIII of the Social Security Act, and their dependents, including dependent children who cease to be dependent children under the plan, who were covered by the group contract on the date of termination of coverage. However, any existing provisions of law regarding termination of a dependent child status shall not be affected by this section. The continuation of coverage shall be available only under the following conditions: (a) Those eligible remain within the State of California, although the departure of a dependent child to another state shall not invalidate the continuation provisions for any other family members. (b) Those eligible do not marry or remarry, although the marriage of any dependent child shall not invalidate the continuation provisions for other family members. (c) Those eligible are not eligible for any comparable state, federal, or private group medical plan, although the eligibility of any dependent child shall not invalidate the continuation provisions for other family members. (d) Those eligible do not find employment with an employer that has a group plan of its own, even if the plan is less substantive, although the entry into such an employee plan by a dependent child shall not invalidate the continuation provisions for other family members. (e) The group policy is not terminated or the employer’s participation in the group policy is not terminated. (f) Those eligible do not knowingly furnish incorrect information or otherwise improperly obtain the benefits of the plan. (g) The continuing individual shall pay the premium amount in the manner specified in the group policy for both his or her share of the premium and the group policyholder’s share, if any. (h) Eligible persons under this section shall be notified in the same manner required for conversion notification pursuant to Section 12689. Every insurer shall communicate the availability of such coverage to all group policyholders and to all prospective group policyholders with whom they are negotiating. (Amended by Stats. 1988, Ch. 960, Sec. 2.)
  74. 12692.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. )

    Verify source ↗

    Several sections do not apply to a group policy issued, amended, or renewed on or after September 1, 2003.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.1. HEALTH DISABILITY INSURANCE CONVERSION [12670 - 12692.5] ( Part 6.1 added by Stats. 1981, Ch. 1096, Sec. 2. ) ## 12692.5. Notwithstanding any other provision of this part, Sections 12672, 12673, 12674, 12675, 12676, 12677, 12678, 12679, 12680, 12681, 12682, 12683, 12684, 12685, 12686, 12687, 12688, 12689, 12690, 12691, and 12692 shall not apply to a group policy that is issued, amended, or renewed on or after September 1, 2003. (Added by Stats. 2002, Ch. 799, Sec. 4. Effective January 1, 2003. Operative September 1, 2003, by Sec. 5 of Ch. 799.)
  75. 12693.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 1. Purpose [12693- 12693.] ( Chapter 1 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The Legislature says a program should be in place to provide health coverage to children in households below 200% of the federal poverty level.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 1. Purpose [12693- 12693.] ( Chapter 1 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693. The Legislature declares all of the following: (a) Approximately 1.6 million California children, 17 percent of children ages 17 and under, have no health insurance. One in four California children, which is 2.3 million, rely on Medi-Cal for insurance coverage, while just over half of the state’s children, 53 percent, have employment-based coverage through a parent. (b) Most uninsured California children come from low-income families, with nearly 75 percent of uninsured children (1.2 million) living in families with incomes below 200 percent of the federal poverty level. Children whose families earn incomes between 100 and 200 percent of the federal poverty level, an estimated 580,000 children, are among the most vulnerable of populations. Their families make too much money to generally qualify for free Medi-Cal, are employed in working class jobs that typically do not offer insurance, and cannot afford private health insurance. In short, affordability remains a major barrier to obtaining coverage. (c) Notwithstanding the generally good health of children, health insurance coverage is important to ensure that they receive the health care that is essential to monitor their growth, nutrition, and development and to address potential health problems early. (d) Lack of insurance coverage for children results in reduced access to medical services, resulting in restricted access to primary and preventive care and increased reliance on emergency rooms and hospitals for treatment. Timely treatment for infectious and chronic diseases can prevent more serious medical conditions in children of all ages. (e) When a child is seriously ill or injured, the costs of needed medical care can force families into financial ruin. (f) That by July 1, 1998, there shall be in place a program providing access to health coverage to all children residing in households with family incomes below 200 percent of the federal poverty level. (g) It is the intent of the Legislature that the program comply with the requirements of Title XXI of the Social Security Act, also know as the State Children’s Health Insurance Program. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  76. 12693.01.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    For this part, the chapter’s definitions control how the part is read unless the context requires a different meaning.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.01. For purposes of this part, the definitions contained in this chapter shall govern the construction of this part, unless the context requires otherwise. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  77. 12693.02.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines who counts as an “Applicant” for coverage under the program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.02. (a) “Applicant” means a person over the age of 18 years who is a natural or adoptive parent; a legal guardian; or a caretaker relative, foster parent, or stepparent with whom the child resides, who applies for coverage under the program on behalf of a child. (b) “Applicant” also means any of the following: (1) A person 18 years of age who is applying on his or her own behalf for coverage under the program. (2) A person who is under 18 years of age and is an emancipated minor who is applying on his or her own behalf for coverage under the program. (3) A minor who is not living in the home of a natural or adoptive parent, a legal guardian, or a caretaker relative, foster parent or stepparent, who is applying on his or her own behalf for coverage under the program. (4) A minor who applies for coverage under the program on behalf of his or her child. (Amended by Stats. 1999, Ch. 146, Sec. 11. Effective July 22, 1999.)
  78. 12693.03.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    “Board” means the Managed Risk Medical Insurance Board.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.03. “Board” means the Managed Risk Medical Insurance Board. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  79. 12693.04.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    “Child” means a person under 19 years of age who is eligible for the program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.04. “Child” means a person who is under 19 years of age who is eligible for the program pursuant to Chapter 9 (commencing with Section 12693.70). (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  80. 12693.045.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “community provider plan.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.045. “Community provider plan” means that participating health plan in each geographic area that has been designated by the board as having the highest percentage of traditional and safety net providers in its provider network. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  81. 12693.05.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “county organized health system.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.05. “County organized health system” means a health care organization that contracts with the State Department of Health Services to provide comprehensive health care to all eligible Medi-Cal beneficiaries residing in the county, and that is operated directly by a public entity established by a county government pursuant to Section 14087.51 or 14087.54 of the Welfare and Institutions Code, or Chapter 3 (commencing with Section 101675) of Part 4 of Division 101 of the Health and Safety Code. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  82. 12693.06.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “family contribution” as the cost an applicant pays to enroll and take part in the program, excluding copayments for insured services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.06. “Family contribution” means the cost to an applicant to enable herself or himself or an eligible child or children to enroll in and participate in the program. Family contribution does not include copayments for insured services. The family contribution may be paid by a family contribution sponsor pursuant to Section 12693.17. (Amended by Stats. 1999, Ch. 146, Sec. 12. Effective July 22, 1999.)
  83. 12693.065.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “family value package” and lets the board expand that definition to include plans near the lowest price.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.065. “Family value package” means the combination of participating health, dental, and vision plans available to subscribers in each geographic area offering the lowest prices to the program. The board may define the family value package to include not only the combination of participating health, dental, and vision plans offering the absolute lowest price to the program but also the combination of health, dental, and vision plans within a fixed percentage or dollar amount of the absolute lowest price. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  84. 12693.07.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “Fund” as the Healthy Families Fund.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.07. “Fund” means the Healthy Families Fund. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  85. 12693.08.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “local initiative” as a prepaid health plan organized or designated by county government(s), or organized by stakeholders in a department-designated region, to provide comprehensive health care to eligible Medi-Cal beneficiaries.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.08. “Local initiative” means a prepaid health plan that is organized by, or designated by, a county government or county governments, or organized by stakeholders, of a region designated by the department to provide comprehensive health care to eligible Medi-Cal beneficiaries. The entities established pursuant to the following sections of the Welfare and Institutions Code are local initiatives: Sections 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, and 14087.96. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  86. 12693.09.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “participating dental plan.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.09. “Participating dental plan” means any of the following plans that is lawfully engaged in providing, arranging, paying for, or reimbursing the cost of personal dental services under insurance policies or contracts, or membership contracts, in consideration of premiums or other periodic charges payable to it, and that contract with the board to provide coverage to program subscribers: (a) A dental insurer holding a valid outstanding certificate of authority from the commissioner. (b) A specialized health care service plan as defined under subdivision (o) of Section 1345 of the Health and Safety Code. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  87. 12693.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “participating health plan” and lists the kinds of plans that can qualify.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.10. “Participating health plan” means any of the following plans that is lawfully engaged in providing, arranging, paying for, or reimbursing the cost of personal health care services under insurance policies or contracts, medical and hospital service arrangements, or membership contracts, in consideration of premiums or other periodic charges payable to it, and that contracts with the board to provide coverage to program subscribers: (a) A private health insurer holding a valid outstanding certificate of authority from the commissioner. (b) A health care service plan as defined under subdivision (f) of Section 1345 of the Health and Safety Code. (c) A county organized health system. (d) A local initiative. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  88. 12693.105.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    A health care service plan covered by this section must include a geographic managed care plan.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.105. A health care service plan, as defined in subdivision (b) of Section 12693.10, shall include a plan operating as a geographic managed care plan. (Added by Stats. 1997, Ch. 625, Sec. 2. Effective October 3, 1997.)
  89. 12693.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “participating vision care plan” for Healthy Families.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.11. “Participating vision care plan” means any of the following plans that is lawfully engaged in providing, arranging, paying for, or reimbursing the cost of personal vision services under insurance policies or contracts, or membership contracts, in consideration of premiums or other periodic charges payable to it, and that contract with the board to provide coverage to program subscribers: (a) A vision insurer holding a valid outstanding certificate of authority from the commissioner. (b) A specialized health care service plan as defined under subdivision (o) of Section 1345 of the Health and Safety Code. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  90. 12693.12.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    “Program” means the Healthy Families Program, including a purchasing pool for children’s health coverage and a purchasing credit mechanism that can provide financial assistance with dependent coverage costs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.12. “Program” means the Healthy Families Program, which includes a purchasing pool providing health coverage for children in families without access to affordable employer based dependent coverage and a purchasing credit mechanism through which families with access to employer based dependent coverage can receive financial assistance with the cost of dependent coverage for children. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  91. 12693.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “Purchasing credit member” as an applicant age 18 or a child who is eligible for and participates in the program’s purchasing credit component.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.13. “Purchasing credit member” means an applicant 18 years of age or a child who is eligible for and participates in the purchasing credit component of the program. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  92. 12693.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    “Subscriber” means an applicant age 18 or a child who is eligible for and participates in the program’s purchasing pool component.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.14. “Subscriber” means an applicant 18 years of age or a child who is eligible for and participates in the purchasing pool component of the program. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  93. 12693.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “supplemental coverage” and ties it to coverage that is at least 95% actuarially equivalent to the program’s purchasing pool coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.15. “Supplemental coverage” means coverage purchased by the program from (a) a private health insurer holding a valid outstanding certificate of authority from the Insurance Commissioner, or (b) a health care service plan as defined under subdivision (f) of Section 1345 of the Health and Safety Code to bring the coverage available to purchasing credit members into at least 95 percent actuarial equivalence with the coverage provided to subscribers through the purchasing pool component of the program. The coverage shall provide for any necessary adjustment of the cost-sharing levels charged to purchasing credit members to be equivalent to those charged to subscribers through the purchasing pool component of the program. Subscriber costs and benefits for the purchasing credit members shall be at least 95 percent actuarially equivalent to subscriber costs and benefits in the purchasing pool component. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  94. 12693.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “geographic managed care plan” as an entity operating under a specified contract in the Welfare and Institutions Code.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.16. “Geographic managed care plan” means an entity that is operating pursuant to a contract entered into under Article 2.91 (commencing with Section 14089) of Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code. (Added by Stats. 1997, Ch. 625, Sec. 3. Effective October 3, 1997.)
  95. 12693.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section defines “family contribution sponsor” as a person or entity that pays an applicant’s family contribution for 12 consecutive months.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 2. Definitions [12693.01 - 12693.17] ( Chapter 2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.17. “Family contribution sponsor” means a person or entity that pays the family contribution on behalf of an applicant for any period of 12 consecutive months and, notwithstanding Section 12693.70, if the sponsor is paying for the initial 12 months of eligibility, the payment for 12 months is made with the application. (Amended by Stats. 2002, Ch. 1161, Sec. 18. Effective September 30, 2002.)
  96. 12693.20.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The Healthy Families Program is created, and the Managed Risk Medical Insurance Board must administer it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.20. The Healthy Families Program is hereby created and shall be administered by the Managed Risk Medical Insurance Board. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  97. 12693.21.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board may administer the Healthy Families program and, when funds are insufficient, must take measures to limit enrollment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.21. The board may do all of the following consistent with the standards in this part: (a) Determine eligibility criteria for the program. (b) Determine the participation requirements of applicants, subscribers, purchasing credit members, and participating health, dental, and vision plans. (c) Determine when subscribers’ coverage begins and the extent and scope of coverage. (d) Determine family contribution amount schedules and collect the contributions. (e) Determine who may be a family contribution sponsor and provide a mechanism for sponsorship. (f) Provide or make available subsidized coverage through participating health, dental, and vision plans, in a purchasing pool, which may include the use of a purchasing credit mechanism, through supplemental coverage, or through coordination with other state programs. (g) Provide for the processing of applications, the enrollment of subscribers, and the distribution of purchasing credits. (h) Determine and approve the benefit designs and copayments required by health, dental, or vision plans participating in the purchasing pool component program. (i) Approve those health plans eligible to receive purchasing credits. (j) Enter into contracts. (k) Sue and be sued. (l) Employ necessary staff. (m) Authorize expenditures from the fund to pay program expenses that exceed subscriber contributions, and to administer the program as necessary. (n) Maintain enrollment and expenditures to ensure that expenditures do not exceed amounts available in the Healthy Families Fund and if sufficient funds are not available to cover the estimated cost of program expenditures, the board shall institute appropriate measures to limit enrollment. (o) Issue rules and regulations, as necessary. Until January 1, 2000, any rules and regulations issued pursuant to this subdivision may be adopted as emergency 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). The adoption of these regulations shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety or general welfare. The regulations shall become effective immediately upon filing with the Secretary of State. (p) Exercise all powers reasonably necessary to carry out the powers and responsibilities expressly granted or imposed by this part. (q) Notwithstanding any other provision of law, on and after January 1, 2011, impose any sanction on, and provide notice and a hearing to, participating health, dental, and vision plans consistent with Section 403 of the federal Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) by applying subsection (e) of Section 1932 of the federal Social Security Act. (Amended by Stats. 2010, Ch. 717, Sec. 26. (SB 853) Effective October 19, 2010.)
  98. 12693.22.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    For the 2009–10 and 2010–11 fiscal years, the board may adopt or readopt certain regulations as emergency rules, and it is exempt from stating facts showing immediate need and from review by the Office of Administrative Law.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.22. During the 2009–10 and 2010–11 fiscal years, the adoption and readoption of regulations to modify health, dental, and vision benefits or otherwise modify program requirements and operations consistent with the provisions of this part shall be deemed to be an emergency and necessary for the immediate preservation of public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (Added by Stats. 2009, Ch. 157, Sec. 2. (AB 1422) Effective September 22, 2009.)
  99. 12693.23.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Until July 1, 2012, the board’s adoption or readoption of certain health insurance regulations is treated as an emergency, and the board does not have to state facts showing immediate need or undergo Office of Administrative Law review.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 3. Creation of Program and Powers of the Board [12693.20 - 12693.23] ( Chapter 3 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.23. Until July 1, 2012, the adoption and readoption of regulations to implement subdivision (q) of Section 12693.21, subdivision (b) of Section 12693.26, or subdivision (l) of Section 56.30 of the Civil Code, or any provision of the federal Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) not addressed by those sections, shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (Added by Stats. 2010, Ch. 717, Sec. 27. (SB 853) Effective October 19, 2010.)
  100. 12693.25.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board may use a purchasing pool model, purchasing credits, supplemental coverage, or other appropriate means to meet this part’s purposes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.25. The board may use a purchasing pool model, issuance of purchasing credits, supplemental coverage, or other means as appropriate to meet the purposes of this part. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  101. 12693.26.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must create a purchasing pool and negotiate contracts for program benefits, and it may use non-participating entities in limited circumstances. Certain related interagency agreements and implementing contracts are exempt from competitive bidding and Department of General Services review or approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.26. (a) The board shall establish a purchasing pool for coverage of program subscribers to enable applicants without access to affordable and comprehensive employer-sponsored dependent coverage to provide their eligible children with health, dental, and vision benefits. The board shall negotiate separate contracts with participating health, dental, and vision plans for each of the benefit packages described in Chapters 5 (commencing with Section 12693.60), 6 (commencing with Section 12693.63), and 7 (commencing with Section 12693.65). (b) Notwithstanding any other provision of law, on and after January 1, 2011, the board may negotiate contracts with entities that are not participating health, dental, or vision plans, including, but not limited to, interagency agreements with the State Department of Health Care Services, to provide or pay for benefits to subscribers under this part, if necessary for any of the following purposes: (1) To comply with Section 403 of the federal Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) by applying paragraph (4) of subsection (a) of Section 1932 of the federal Social Security Act. (2) To comply with Section 503 of the federal Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) by applying subsection (bb) of Section 1902 of the federal Social Security Act. (3) To ensure that subscribers have adequate access to benefits under this part. (c) Any interagency agreement entered into by a state agency with the board pursuant to subdivision (b), and any other contract or contract amendment necessary to implement that agreement, shall be exempt from any provision of law relating to competitive bidding and from the review or approval of any division of the Department of General Services in the same manner as contracts entered into by the board are exempt pursuant to Section 12693.54. (Amended by Stats. 2010, Ch. 717, Sec. 28. (SB 853) Effective October 19, 2010.)
  102. 12693.27.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must create and manage a purchasing credit program, and employers and participating plans have several funding and fee restrictions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.27. (a) The board shall develop a purchasing credit mechanism to enable applicants with access to affordable and comprehensive employer-sponsored dependent coverage to have an eligible child enrolled in the employer’s health plan. Children enrolled in the purchasing credit mechanism may receive dental and vision benefits through the purchasing pool component of the program. (b) In order to be eligible for a purchasing credit, the employer shall make a meaningful contribution toward the cost of coverage for an employee’s dependents for whom an application is made for a purchasing credit. An employer’s contribution, including any increases or decreases in the contribution made after the effective date of this part, may not vary among employees based on wage base or job classification. (c) The board shall adopt appropriate mechanisms to recoup purchasing credit expenditures from an employer plan when the employees or dependents on behalf of whose coverage the payments are made are no longer enrolled in that plan. (d) An employer utilizing a purchasing credit arrangement and a participating health plan receiving a purchasing credit must use 100 percent of the funds for the purchase of coverage for purchasing credit members including dependent coverage. (e) A participating plan shall not assess the board for any portion of late fees, returned checks, or other fees in connection with an employer with group coverage who is also participating in the purchasing credit arrangement. (f) An applicant may begin coverage for dependents using a purchasing credit arrangement at any time. Purchasing credit members enrolling in employer-sponsored coverage shall not be considered late enrollees for the purposes of subdivision (d) of Section 1357 and subdivision (b) of Section 1357.50 of the Health and Safety Code, and subdivision (b) of Section 10198.6 and subdivision (l) of Section 10700. (g) Under no circumstances shall the employee’s share of cost, including, deductibles, copayments, and coinsurance, for dependent coverage, including any supplemental coverage necessary to meet the 95 percent actuarial standard established in Section 12693.15 be more than that required as the employee’s share of premium if the employee’s children were enrolled in the purchasing pool component of the program. (h) The board may limit participation in the purchasing credit program to those employers that provide employee health benefits through participation in public or private purchasing cooperatives. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  103. 12693.271.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Starting on the first day of the fifth month after enactment of the 2008–09 Budget Act, participating health, dental, and vision plan rates must be reduced from the July 1, 2007 rates by 5%, with an additional downward adjustment for reduced actuarial value tied to annual dental benefit limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.271. (a) The Legislature finds and declares that the state faces a fiscal crisis that requires unprecedented measures to reduce General Fund expenditures. (b) Notwithstanding any other provision of law, beginning the first day of the fifth month following the enactment of the 2008–09 Budget Act, the rates for the participating health, dental, and vision plans shall be set by reducing the rates that were in effect on July 1, 2007, by 5 percent, and by adjusting the July 1, 2007, rates downward to account for any reduction in the actuarial value of the benefits provided to subscribers as of the first day of the fifth month following the enactment of the 2008–09 Budget Act, associated with annual limitations on dental benefits. This requirement does not preclude the board from making other downward adjustments that it deems appropriate as a result of its annual rate negotiation process. (Added by Stats. 2008, Ch. 758, Sec. 16. Effective September 30, 2008.)
  104. 12693.28.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The program must be administered without discrimination based on the listed personal or status characteristics.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.28. The program shall be administered without regard to gender, gender identity, gender expression, race, creed, color, sexual orientation, health status, disability, or occupation. (Amended by Stats. 2011, Ch. 719, Sec. 28. (AB 887) Effective January 1, 2012.)
  105. 12693.29.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must notify families about health coverage availability and use suitable materials to do so; the State Department of Health Services and the board must also run an outreach and education campaign.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.29. (a) The board shall use appropriate and efficient means to notify families of the availability of health coverage from the program. (b) The State Department of Health Services in conjunction with the board shall conduct a community outreach and education campaign in accordance with Section 14067 of the Welfare and Institutions Code to assist in notifying families of the availability of health coverage for their children. (c) The board shall use appropriate materials, which may include brochures, pamphlets, fliers, posters, and other promotional items, to notify families of the availability of coverage through the program. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  106. 12693.30.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must make certain program information and services available in the languages required by the Government Code, and ensure interpreter and provider-directory information is available to subscribers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.30. (a) The board shall assure that written enrollment information issued or provided by the program is available to program subscribers and applicants in each of the languages identified pursuant to Chapter 17.5 (commencing with Section 7290) of Division 7 of Title 1 of the Government Code. (b) The board shall assure that phone services provided to program subscribers and applicants by the program are available in all of the languages identified pursuant to Chapter 17.5 (commencing with Sec. 7290) of Division 7 of Title 1 of the Government Code. (c) The board shall assure that interpreter services are available between subscribers and contracting plans. The board shall assure that subscribers are provided information within provider network directories of available linguistically diverse providers. (d) The board shall assure that participating health, dental, and vision plans provide documentation on how they provide linguistically and culturally appropriate services, including marketing materials, to subscribers. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  107. 12693.31.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    A participating health, dental, or vision plan may not give marketing material about program benefits or rates to an applicant or child in a program area unless the material has been reviewed and approved by the board.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.31. No participating health, dental, or vision plan shall, in an area served by the program, directly, or through an employee, agent, or contractor, provide an applicant, or a child with any marketing material relating to benefits or rates provided under the program unless the material has been both reviewed and approved by the board. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  108. 12693.32.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board may pay application assistance fees and set related rules, but outreach entities and participating plans face limits on solicitation and fee collection, and certain assistance must be free.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.32. (a) The board may pay designated individuals or organizations an application assistance fee, if the individual or organization assists an applicant to complete the program application, and the applicant is enrolled in the program as a result of the application. (b) The board may establish the list of eligible individuals, or categories of individuals and organizations, the amount of the application assistance payment, and rules necessary to assure the integrity of the payment process. (c) The board, as part of its community outreach and education campaign, may include community-based face-to-face initiatives to educate potentially eligible applicants about the program and to assist potential applicants in the application process. Those entities undertaking outreach efforts shall not include as part of their responsibilities the selection of a health plan and provider for the applicant. Participating plans shall be prohibited from directly, indirectly, or through their agents conducting in-person, door-to-door, mail, or telephone solicitation of applicants for enrollment except through employers with employees eligible to participate in the purchasing credit mechanism. However, information approved by the board on the providers and plans available to prospective subscribers in their geographic areas shall be distributed through any door-to-door activities for potentially eligible applicants and their children. (d) (1) All assistance offered to an individual applying to the program shall be free of charge. Except as provided in subdivision (a) or by a regulation adopted by the board, no individual or organization offering or providing assistance to an applicant to complete the program application shall solicit or receive any fee or remuneration from the applicant or subscriber for offering or providing that service. (2) A person who violates this subdivision or a regulation adopted by the board pursuant to this subdivision, shall be assessed a civil penalty of five hundred dollars ($500) for each violation. For this purpose, a violation occurs each day a solicitation is published on an Internet Web site or is otherwise circulated to the public. This penalty is in addition to any other remedy or penalty provided by law. All penalties collected under this paragraph shall be deposited in the State Treasury to the credit of the Healthy Families Fund. (3) A civil or administrative action brought under this article at the request of the board may be brought by the Attorney General in the name of the people of the State of California in a court of competent jurisdiction, or in a hearing through the Office of Administrative Hearings conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, except that when a civil action is to be filed in small claims court, the board may bring the action. The action shall be filed within three years of the date the board discovered the facts indicating a violation of this subdivision. (Amended by Stats. 2004, Ch. 234, Sec. 1. Effective January 1, 2005.)
  109. 12693.325.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    Participating health, dental, or vision plans may give application assistance, but only under listed conditions, and they face marketing and solicitation limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.325. (a) (1) Notwithstanding any provision of this chapter, a participating health, dental, or vision plan that is licensed and in good standing as required by subdivision (b) of Section 12693.36 may provide application assistance directly to an applicant acting on behalf of an eligible person who telephones, writes, or contacts the plan in person at the plan’s place of business, or at a community public awareness event that is open to all participating plans in the county, or at any other site approved by the board, and who requests application assistance. (2) A participating health, dental, or vision plan may also provide application assistance directly to an applicant only under the following conditions: (A) The assistance is provided upon referral from a government agency, school, or school district. (B) The applicant has authorized the government agency, school, or school district to allow a health, dental, or vision plan to contact the applicant with additional information on enrolling in free or low-cost health care. (C) The State Department of Health Care Services approves the applicant authorization form in consultation with the board. (D) The plan may not actively solicit referrals and may not provide compensation for the referrals. (E) If a family is already enrolled in a health plan, the plan that contacts the family cannot encourage the family to change health plans. (F) The board amends its marketing guidelines to require that when a government agency, school, or school district requests assistance from a participating health, dental, or vision plan to provide application assistance, that all plans in the area shall be invited to participate. (G) The plan abides by the board’s marketing guidelines. (b) A participating health, dental, or vision plan may provide application assistance to an applicant who is acting on behalf of an eligible or potentially eligible child in any of the following situations: (1) The child is enrolled in a Medi-Cal managed care plan and the participating plan becomes aware that the child’s eligibility status has or will change and that the child will no longer be eligible for Medi-Cal. In those instances, the plan shall inform the applicant of the differences in benefits and requirements between the Healthy Families Program and the Medi-Cal program. (2) The child is enrolled in a Healthy Families Program managed care plan and the participating plan becomes aware that the child’s eligibility status has changed or will change and that the child will no longer be eligible for the Healthy Families Program. When it appears a child may be eligible for Medi-Cal benefits, the plan shall inform the applicant of the differences in benefits and requirements between the Medi-Cal program and the Healthy Families Program. (3) The participating plan provides employer-sponsored coverage through an employer and an employee of that employer who is the parent or legal guardian of the eligible or potentially eligible child. (4) The child and his or her family are participating through the participating plan in COBRA continuation coverage or other group continuation coverage required by either state or federal law and the group continuation coverage will expire within 60 days, or has expired within the past 60 days. (5) The child’s family, but not the child, is participating through the participating plan in COBRA continuation coverage or other group continuation coverage required by either state or federal law, and the group continuation coverage will expire within 60 days, or has expired within the past 60 days. (c) A participating health, dental, or vision plan employee or other representative that provides application assistance shall complete a certified application assistant training class approved by the State Department of Health Care Services in consultation with the board. The employee or other representative shall in all cases inform an applicant verbally of his or her relationship with the participating health plan. In the case of an in-person contact, the employee or other representative shall provide in writing to the applicant the nature of his or her relationship with the participating health plan and obtain written acknowledgment from the applicant that the information was provided. (d) A participating health, dental, or vision plan that provides application assistance may not do any of the following: (1) Directly, indirectly, or through its agents, conduct door-to-door marketing or telephone solicitation. (2) Directly, indirectly, or through its agents, select a health plan or provider for a potential applicant. Instead, the plan shall inform a potential applicant of the choice of plans available within the applicant’s county of residence and specifically name those plans and provide the most recent version of the program handbook. (3) Directly, indirectly, or through its agents, conduct mail or in-person solicitation of applicants for enrollment, except as specified in subdivision (b), using materials approved by the board. (e) A participating health, dental, or vision plan that provides application assistance pursuant to this section is not eligible for an application assistance fee otherwise available pursuant to Section 12693.32, and may not sponsor a person eligible for the program by paying his or her family contribution amounts or copayments, and may not offer applicants any inducements to enroll, including, but not limited to, gifts or monetary payments. (f) A participating health, dental, or vision plan may assist applicants acting on behalf of subscribers who are enrolled with the participating plan in completing the program’s annual eligibility review package in order to allow those applicants to retain health care coverage. (g) Each participating health, dental, or vision plan shall submit to the board a plan for application assistance. All scripts and materials to be used during application assistance sessions shall be approved by the board and the State Department of Health Care Services. (h) Each participating health, dental, or vision plan shall provide each applicant with the toll-free telephone number for the Healthy Families Program. (i) When deemed appropriate by the board, the board may refer a participating health, dental, or vision plan to the Department of Managed Health Care or the State Department of Health Care Services, as applicable, for the review or investigation of its application assistance practices. (j) The board shall evaluate the impact of the changes required by this section and shall provide a biennial report to the Legislature on or before March 1 of every other year. To prepare these reports, the State Department of Health Care Services, in cooperation with the board, shall code all the application packets used by a managed care plan to record the number of applications received that originated from managed care plans. The number of applications received that originated from managed care plans shall also be reported on the board’s Web site. In addition, the board shall periodically survey those families assisted by plans to determine if the plans are meeting the requirements of this section, and if families are being given ample information about the choice of health, dental, or vision plans available to them. (k) Nothing in this section shall be seen as mitigating a participating health, dental, or vision plan’s responsibility to comply with all federal and state laws, including, but not limited to, Section 1320a-7b of Title 42 of the United States Code. (Amended by Stats. 2007, Ch. 483, Sec. 38. Effective January 1, 2008.)
  110. 12693.326.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    A new subscriber may switch plans once within the first three months of coverage, for any reason.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.326. Notwithstanding any other provision of this part, a new subscriber in the program shall be allowed to switch his or her choice of plans once within the first three months of coverage for any reason. (Amended by Stats. 2004, Ch. 234, Sec. 3. Effective January 1, 2005.)
  111. 12693.33.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The State Department of Health Services and the board must develop a joint Medi-Cal and program application and enrollment form for children, and the department must seek any federal approval needed to implement it, subject to federal law and feasibility.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.33. To the extent feasible and permissible under federal law and with receipt of necessary federal approvals, the State Department of Health Services and the board shall develop a joint Medi-Cal and program application and enrollment form for children. The department shall seek any federal approval necessary to implement a combined application form. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  112. 12693.34.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board may set geographic areas for participating health, dental, and vision plans, and this section does not restrict certain county or local health programs from serving subscribers in their licensed areas.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.34. (a) The board may establish geographic areas within which participating health, dental, and vision plans may offer coverage to subscribers. (b) Nothing in this section shall restrict a county organized health system or a local initiative from providing service to program subscribers in their licensed geographic service area. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  113. 12693.35.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    Participating health, dental, and vision plans must meet listed operating standards, and participating health plans must have a contract-tracking system before the contract starts and use it throughout the contract.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.35. Participating health, dental, and vision plans shall have, but need not be limited to, all of the following operating characteristics satisfactory to the board in consultation with the plan’s licensing or regulatory oversight agency: (a) Strong financial condition, including the ability to assume the risk of providing and paying for covered services. A participating plan may utilize reinsurance, provider risk sharing, and other appropriate mechanisms to share a portion of the risk. (b) Adequate administrative management. (c) A satisfactory grievance procedure. (d) Participating plans that contract with or employ health care providers shall have mechanisms to accomplish all of the following, in a manner satisfactory to the board: (1) Review the quality of care covered. (2) Review the appropriateness of care covered. (3) Provide accessible health care services. (e) (1) Before the effective date of the contract, the participating health plan shall have devised a system for identifying in a simple and clear fashion both in its own records and in the medical records of subscribers the fact that the services provided are provided under the program. (2) Throughout the duration of the contract, the plan shall use the system described in paragraph (1). (f) Plans licensed by the Department of Managed Health Care shall be deemed to meet the requirements of subdivisions (a) to (d), inclusive, of this section. (Amended by Stats. 2015, Ch. 190, Sec. 67. (AB 1517) Effective January 1, 2016.)
  114. 12693.36.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board is not subject to licensure or regulation by the named departments, and participating health, dental, and vision plans must be licensed, stay in good standing, and show proof of that standing when applying to the program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.36. (a) Notwithstanding any other provision of law, the board shall not be subject to licensure or regulation by the Department of Insurance or the Department of Managed Health Care, as the case may be. (b) Participating health, dental, and vision plans that contract with the program and are regulated by either the Insurance Commissioner or the Department of Managed Health Care shall be licensed and in good standing with their respective licensing agencies. In their application to the program, those entities shall provide assurance of their standing with the appropriate licensing entity. (Amended by Stats. 2005, Ch. 80, Sec. 4. Effective July 19, 2005.)
  115. 12693.37.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must contract with a broad range of health plans, publish selection criteria and notice, and manage plan selection and contract awards using those criteria rather than relying only on one agency’s adequacy determination.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.37. (a) The board shall contract with a broad range of health plans in an area, if available, to ensure that subscribers have a choice from among a reasonable number and types of competing health plans. The board shall develop and make available objective criteria for health plan selection and provide adequate notice of the application process to permit all health plans a reasonable and fair opportunity to participate. The criteria and application process shall allow participating health plans to comply with their state and federal licensing and regulatory obligations, except as otherwise provided in this chapter. Health plan selection shall be based on the criteria developed by the board. (b) (1) In its selection of participating plans the board shall take all reasonable steps to assure the range of choices available to each applicant, other than a purchasing credit member, shall include plans that include in their provider networks and have signed contracts with traditional and safety net providers. (2) Participating health plans shall be required to submit to the board on an annual basis a report summarizing their provider network. The report shall provide, as available, information on the provider network as it relates to: (A) Geographic access for the subscribers. (B) Linguistic services. (C) The ethnic composition of providers. (D) The number of subscribers who selected traditional and safety net providers. (c) (1) The board shall not rely solely on the Department of Managed Health Care’s determination of a health plan network’s adequacy or geographic access to providers in the awarding of contracts under this part. The board shall collect and review demographic, census, and other data to provide to prospective local initiatives, health plans, or specialized health plans, as defined in this act, specific provider contracting target areas with significant numbers of uninsured children in low-income families. The board shall give priority to those plans, on a county-by-county basis, that demonstrate that they have included in their prospective plan networks significant numbers of providers in these geographic areas. (2) Targeted contracting areas are those ZIP Codes or groups of ZIP Codes or census tracts or groups of census tracts that have a percentage of uninsured children in low-income families greater than the overall percentage of uninsured children in low-income families in that county. (d) In each geographic area, the board shall designate a community provider plan that is the participating health plan which has the highest percentage of traditional and safety net providers in its network. Subscribers selecting such a plan shall be given a family contribution discount as described in Section 12693.43. (e) The board shall establish reasonable limits on health plan administrative costs. (Amended by Stats. 2000, Ch. 857, Sec. 75. Effective January 1, 2001.)
  116. 12693.38.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must contract with enough dental and vision plans, publish objective selection criteria, give notice of the application process, and set reasonable administrative cost limits. Participating dental plans must file an annual provider-network report with the board.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.38. (a) The board shall contract with a sufficient number of dental and vision plans to assure that dental and vision benefits are available to all subscribers. The board shall develop and make available objective criteria for dental and vision plan selection and provide adequate notice of the application process to permit all dental and vision plans a reasonable and fair opportunity to participate. The criteria and application process shall allow participating dental and vision plans to comply with their state and federal licensing and regulatory obligations, except as otherwise provided in this part. Dental and vision plan selection shall be based on the criteria developed by the board. (b) Participating dental plans shall be required to submit to the board on an annual basis a report summarizing their provider network. The report shall provide, as available, information on the provider network as it relates to each of the following: (1) Geographic access for the subscribers. (2) Linguistic services. (3) The ethnic composition of providers. (c) The board shall establish reasonable limits on dental plan administrative costs. (Amended by Stats. 1998, Ch. 285, Sec. 1. Effective August 13, 1998.)
  117. 12693.39.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must create a process to decide which employer-sponsored health plans can receive a program purchasing credit, and that process must ensure certain plan features are at least 95% actuarially equivalent to those for program subscribers in the purchasing pool.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.39. The board shall establish a process for determining which employer-sponsored health plans are eligible to receive a purchasing credit issued by the program. The process shall assure that the benefits, copayments, coinsurance, and deductibles are no less than 95 percent actuarially equivalent to those provided to program subscribers enrolled in the purchasing pool. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  118. 12693.40.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must contract with health plans to provide supplemental coverage when the employer-sponsored plan is not 95% actuarially equivalent; if that supplemental coverage is available and provided, the plan may become eligible for purchasing credits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.40. The board shall contract with health plans to provide coverage supplemental to that provided by an applicant’s or applicant’s spouse’s employer-sponsored health plan for the purchasing credit member, if the employer-sponsored plan’s benefits are not 95 percent actuarially equivalent to those provided to subscribers. If supplemental coverage is available and provided, the plan may then, notwithstanding Section 12693.39, become eligible to receive purchasing credits. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  119. 12693.41.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must coordinate with Health Services on preenrollment, accept the followup application as a Healthy Families application, and may adopt emergency regulations and use the state fiscal intermediary for processing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.41. (a) The board shall consult and coordinate with the State Department of Health Services in implementing a preenrollment program into the Healthy Families Program or the Medi-Cal program pursuant to subdivision (b) of Section 14011.7 of the Welfare and Institutions Code. The board shall accept the followup application provided for in Section 14011.7 of the Welfare and Institutions Code as an application for the Healthy Families Program. Preenrollment shall be administered by the State Department of Health Services to provide full-scope benefits pursuant to Medi-Cal program requirements, at no cost to the applicant. (b) The board may use the state fiscal intermediary for medicaid to process the eligibility determinations and payments required pursuant to Section 14011.7 of the Welfare and Institutions Code. (c) The board shall be exempt from the requirements of Chapter 7 (commencing with Section 11700) of Division 3 of Title 2 of the Government Code and Chapter 3 (commencing with Section 12100) of Part 2 of Division 2 of the Public Contract Code as those requirements apply to the use of processing services by the state fiscal intermediary. (d) The board may adopt emergency regulations to implement preenrollment into the Healthy Families Program or the Medi-Cal program pursuant to Section 14011.7 of the Welfare and Institutions Code. The emergency regulations shall include, but not be limited to, regulations that implement any changes in rules relating to eligibility, enrollment, and disenrollment in the programs pursuant to Sections 12693.45 and 12693.70. The initial adoption of emergency regulations and one readoption of the initial regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, and general welfare. Initial emergency regulations and the first readoption of those regulations shall be exempt from review by the Office of Administrative Law. The initial emergency regulations and one readoption of those regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and publication in the California Code of Regulations and each shall remain in effect for no more than 180 days. (e) This section shall become operative on April 1, 2003. (Repealed (in Sec. 19) and added by Stats. 2002, Ch. 1161, Sec. 20. Effective September 30, 2002. Section operative April 1, 2003, by its own provisions.)
  120. 12693.42.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    Purchasing credits issued by the board, or a contractor for the board, must not cost the program more than enrolling the subscriber in the lowest-cost available plan, and administrative and supplemental-product costs must be included in that calculation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.42. Any purchasing credit issued by the board, or a contractor acting on behalf of the board, pursuant to this part shall have an overall cost to the program no greater than the cost to the program to enroll the subscriber in the lowest cost plan available to the subscriber through the purchasing pool. Administrative costs and the cost to the program of any supplemental product shall be included in the calculation of the cost of the purchasing credit program and deducted from the amount of the purchasing credit. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  121. 12693.43.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Applicants must pay family contributions unless they have a family contribution sponsor, and the board must set package options, give certain discounts, and provide notice when premiums change.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.43. (a) Applicants applying to the purchasing pool shall agree to pay family contributions, unless the applicant has a family contribution sponsor. Family contribution amounts consist of the following two components: (1) The flat fees described in subdivision (b) or (d). (2) Any amounts that are charged to the program by participating health, dental, and vision plans selected by the applicant that exceed the cost to the program of the highest cost Family Value Package in a given geographic area. (b) In each geographic area, the board shall designate one or more Family Value Packages for which the required total family contribution is: (1) Seven dollars ($7) per child with a maximum required contribution of fourteen dollars ($14) per month per family for applicants with annual household incomes up to and including 150 percent of the federal poverty level. (2) (A) Nine dollars ($9) per child with a maximum required contribution of twenty-seven dollars ($27) per month per family for applicants with annual household incomes greater than 150 percent and up to and including 200 percent of the federal poverty level and for applicants on behalf of children described in clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a) of Section 12693.70. (B) Commencing the first day of the fifth month following the enactment of the 2008–09 Budget Act, the family contribution pursuant to this paragraph shall be twelve dollars ($12) per child with a maximum required contribution of thirty-six dollars ($36) per month per family. (C) Commencing November 1, 2009, the family contribution pursuant to this paragraph shall be sixteen dollars ($16) per child with a maximum required contribution of forty-eight dollars ($48) per month per family. (D) Subject to prior federal authorization, the family contribution pursuant to this paragraph shall be thirty dollars ($30) per child with a maximum required contribution of ninety dollars ($90) per month per family, or any lesser increase in family contributions as is authorized by the federal Department of Health and Human Services. The family contribution required by this subparagraph shall commence the first day of the third month following the later of the following: (i) The effective date of the act adding this subparagraph. (ii) Receipt of federal authorization for the contribution in the form of an approved amendment to California’s state plan under Title XXI of the federal Social Security Act or a waiver of one or more requirements of Title XXI of the federal Social Security Act. (3) (A) On and after July 1, 2005, fifteen dollars ($15) per child with a maximum required contribution of forty-five dollars ($45) per month per family for applicants with annual household income to which subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is applicable. Notwithstanding any other provision of law, if an application with an effective date prior to July 1, 2005, was based on annual household income to which subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is applicable, then this subparagraph shall be applicable to the applicant on July 1, 2005, unless subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is no longer applicable to the relevant family income. The program shall provide prior notice to any applicant for currently enrolled subscribers whose premium will increase on July 1, 2005, pursuant to this subparagraph and, prior to the date the premium increase takes effect, shall provide that applicant with an opportunity to demonstrate that subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is no longer applicable to the relevant family income. (B) Commencing the first day of the fifth month following the enactment of the 2008–09 Budget Act, the family contribution pursuant to this paragraph shall be seventeen dollars ($17) per child with a maximum required contribution of fifty-one dollars ($51) per month per family. (C) Commencing November 1, 2009, the family contribution pursuant to this paragraph shall be twenty-four dollars ($24) per child with a maximum required contribution of seventy-two dollars ($72) per month per family. (D) Subject to prior federal authorization, the family contribution pursuant to this paragraph shall be forty-two dollars ($42) per child with a maximum required contribution of one hundred twenty-six dollars ($126) per month per family, or any lesser increase in family contributions as is authorized by the federal Department of Health and Human Services. The family contribution required by this subparagraph shall commence the first day of the third month following the later of the following: (i) The effective date of the act adding this subparagraph. (ii) Receipt of federal authorization for the contribution in the form of an approved amendment to California’s state plan under Title XXI of the federal Social Security Act or a waiver of one or more requirements of Title XXI of the federal Social Security Act. (c) Combinations of health, dental, and vision plans that are more expensive to the program than the highest cost Family Value Package may be offered to and selected by applicants. However, the cost to the program of those combinations that exceeds the price to the program of the highest cost Family Value Package shall be paid by the applicant as part of the family contribution. (d) The board shall provide a family contribution discount to those applicants who select the health plan in a geographic area that has been designated as the Community Provider Plan. The discount shall reduce the portion of the family contribution described in subdivision (b) to the following: (1) A family contribution of four dollars ($4) per child with a maximum required contribution of eight dollars ($8) per month per family for applicants with annual household incomes up to and including 150 percent of the federal poverty level. (2) (A) Six dollars ($6) per child with a maximum required contribution of eighteen dollars ($18) per month per family for applicants with annual household incomes greater than 150 percent and up to and including 200 percent of the federal poverty level and for applicants on behalf of children described in clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a) of Section 12693.70. (B) Commencing the first day of the fifth month following the enactment of the 2008–09 Budget Act, the family contribution pursuant to this paragraph shall be nine dollars ($9) per child with a maximum required contribution of twenty-seven dollars ($27) per month per family. (C) Commencing November 1, 2009, the family contribution pursuant to this paragraph shall be thirteen dollars ($13) per child with a maximum required contribution of thirty-nine dollars ($39) per month per family. (D) Subject to prior federal authorization, the family contribution pursuant to this paragraph shall be twenty-seven dollars ($27) per child with a maximum required contribution of eighty-one dollars ($81) per month per family, or any lesser increase in family contributions as is authorized by the federal Department of Health and Human Services. The family contribution required by this subparagraph shall commence the first day of the third month following the later of the following: (i) The effective date of the act adding this subparagraph. (ii) Receipt of federal authorization for the contribution in the form of an approved amendment to California’s state plan under Title XXI of the federal Social Security Act or a waiver of one or more requirements of Title XXI of the federal Social Security Act. (3) (A) On and after July 1, 2005, twelve dollars ($12) per child with a maximum required contribution of thirty-six dollars ($36) per month per family for applicants with annual household income to which subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is applicable. Notwithstanding any other provision of law, if an application with an effective date prior to July 1, 2005, was based on annual household income to which subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is applicable, then this subparagraph shall be applicable to the applicant on July 1, 2005, unless subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is no longer applicable to the relevant family income. The program shall provide prior notice to any applicant for currently enrolled subscribers whose premium will increase on July 1, 2005, pursuant to this subparagraph and, prior to the date the premium increase takes effect, shall provide that applicant with an opportunity to demonstrate that subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70 is no longer applicable to the relevant family income. (B) Commencing the first day of the fifth month following the enactment of the 2008–09 Budget Act, the family contribution pursuant to this paragraph shall be fourteen dollars ($14) per child with a maximum required contribution of forty-two dollars ($42) per month per family. (C) Commencing November 1, 2009, the family contribution pursuant to this paragraph shall be twenty-one dollars ($21) per child with a maximum required contribution of sixty-three dollars ($63) per month per family. (D) Subject to prior federal authorization, the family contribution pursuant to this paragraph shall be thirty-nine dollars ($39) per child with a maximum required contribution of one hundred seventeen dollars ($117) per month per family, or any lesser increase in family contributions as is authorized by the federal Department of Health and Human Services. The family contribution required by this subparagraph shall commence the first day of the third month following the later of the following: (i) The effective date of the act adding this subparagraph. (ii) Receipt of federal authorization for the contribution in the form of an approved amendment to California’s state plan under Title XXI of the federal Social Security Act or a waiver of one or more requirements of Title XXI of the federal Social Security Act. (e) Applicants, but not family contribution sponsors, who pay three months of required family contributions in advance shall receive the fourth consecutive month of coverage with no family contribution required. (f) Applicants, but not family contribution sponsors, who pay the required family contributions by an approved means of electronic fund transfer shall receive a 25-percent discount from the required family contributions. (g) It is the intent of the Legislature that the family contribution amounts described in this section comply with the premium cost-sharing limits contained in Section 2103 of Title XXI of the Social Security Act. If the amounts described in subdivision (a) are not approved by the federal government, the board may adjust these amounts to the extent required to achieve approval of the state plan. (h) The adoption and one readoption of regulations to implement paragraph (3) of subdivision (b) and paragraph (3) of subdivision (d) shall be deemed to be an emergency and necessary for the immediate preservation of public peace, health, and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe specific facts showing the need for immediate action and from review by the Office of Administrative Law. For purpose of subdivision (e) of Section 11346.1 of the Government code, the 120-day period, as applicable to the effective period of an emergency regulatory action and submission of specified materials to the Office of Administrative Law, is hereby extended to 180 days. (i) The board may adopt, and may only one time readopt, regulations to implement the changes to this section that are effective the first day of the fifth month following the enactment of the 2008–09 Budget Act. The adoption and one-time readoption of a regulation authorized by this section is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted for this purpose from the requirements of subdivision (b) of Section 11346.1 of the Government Code. (j) The program shall provide prior notice to any applicant for a subscriber whose premium will increase as a result of amendments made to this section and shall provide the applicant with an opportunity to demonstrate that, based on reduced family income, the subscriber is subject to a lower premium pursuant to this section. (k) The adoption and readoption, by the board, of regulations to implement the changes made to this section by the act that added this subdivision shall be deemed to be an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (Amended by Stats. 2011, Ch. 3, Sec. 1. (AB 97) Effective March 24, 2011.)
  122. 12693.44.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must set family contribution amounts for purchasing credit members equal to the amounts charged in the purchasing pool, and those members cannot be charged more than the applicant’s cost under the pool calculation rule.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.44. (a) The board shall establish family contribution amounts for purchasing credit members that are equivalent to the amounts charged to subscribers participating in the purchasing pool portion of the program. Purchasing credit members shall not be required to pay family contribution amounts greater than the cost to the applicant if the purchasing credit members were enrolled in the purchasing pool component of the program. When calculating the cost to the applicant to participate in the purchasing pool, the family contribution discounts provided in subdivisions (c), (d), and (e) of Section 12693.34 shall not be considered. Purchasing credit members shall be eligible for dental and vision coverage through the purchasing pool at no additional premium charge. (b) The family contribution amounts paid on behalf of a purchasing credit member may be paid directly to the applicant’s employer through a payroll deduction or other mechanism. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  123. 12693.45.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    After two months of nonpayment and at least 30 days’ written notice, subscribers or purchasing credit members may be disenrolled for failure to pay family contributions. The board may also arrange collection actions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.45. (a) After two consecutive months of nonpayment of family contributions by an applicant, and a reasonable written notice period of no less than 30 days is provided to the applicant, subscribers or purchasing credit members may be disenrolled for an applicant’s failure to pay family contributions. The board may impose or contract for collection actions to collect unpaid family contributions. (b) Subject to any additional requirements of federal law, disenrollments shall be effective at the end of the second consecutive month of nonpayment. (Amended by Stats. 2002, Ch. 1161, Sec. 22. Effective September 30, 2002.)
  124. 12693.46.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board may bar certain applicants from reenrolling in the program for up to six months if they drop coverage after enrolling in the pool.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.46. The board may prohibit applicants who drop coverage after enrolling in the pool from reenrollment in the program for up to six months. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  125. 12693.47.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The program may place a lien on certain compensation or benefits recovered by a subscriber or applicant.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.47. The program may place a lien on compensation or benefits, recovered or recoverable by a subscriber or applicant from any party or parties responsible for the compensation or benefits for which benefits have been provided under a policy issued under this part. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  126. 12693.48.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board may adjust payments to a participating health plan if it finds the plan has a significantly disproportionate share of high- or low-risk subscribers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.48. The board may adjust payments made to a participating health plan if the board finds that the plan has a significantly disproportionate share of high- or low-risk subscribers. Prior to making this finding, the program shall obtain validated data from participating health plans. Reporting requirements shall be administratively compatible with the methods of operation of the health plans. Any adjustments to payments shall utilize demographic and other factors which are actuarially related to risk. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  127. 12693.49.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    An applicant dissatisfied with a participating plan must first try to resolve the dispute with that plan. The board must also ensure plans inform subscribers about available oversight and report grievance data annually, and the information must be available to applicants on request in a board-set format.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.49. (a) When an applicant is dissatisfied with any action or inaction of a participating plan in which a subscriber is enrolled through the purchasing pool, the applicant shall first attempt to resolve the dispute with the participating plan according to its established policies and procedures. (b) The board shall assure that all participating health, dental, and vision plans make subscribers aware of the regulatory oversight available to the applicant by the participating health, dental, or vision plan’s licensing or state oversight entity. (c) The board shall assure that all participating health, dental, and vision plans report to the board, at least once a year, the number and types of benefit grievances filed by applicants on behalf of subscribers in the program. This information shall be available to applicants upon request in a format determined by the board. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  128. 12693.50.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must coordinate with the State Department of Health Services, the state must seek approval for needed state plan amendments, and the program can be implemented only after all necessary federal approvals are obtained. The board may adopt emergency regulations, which must cover eligibility, enrollment, and disenrollment changes; the initial regulations and first readoption are exempt from Office of Administrative Law review and can remain in effect for up to 180 days.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.50. (a) The board shall consult and coordinate with the State Department of Health Services to implement the Medi-Cal to Healthy Families Accelerated Enrollment program pursuant to Section 14011.65 of the Welfare and Institutions Code. (b) The state shall seek approval of any amendments to the state plan, necessary to implement Section 14011.65 of the Welfare and Institutions Code in accordance with Title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.). Notwithstanding any other provision of law, only when all necessary federal approvals have been obtained shall Section 14011.65 of the Welfare and Institutions Code be implemented. (c) The board may adopt emergency regulations to implement the provision of accelerated eligibility benefits pursuant to this section and as described under Section 14011.65 of the Welfare and Institutions Code. The emergency regulations shall include, but not be limited to, regulations that implement any changes in rules relating to program eligibility, enrollment, and disenrollment. The initial adoption of emergency regulations and one readoption of the initial regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, and general welfare. Initial emergency regulations and the first readoption of those regulations shall be exempt from review by the Office of Administrative Law. The initial emergency regulations and one readoption of those regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and publication in the California Code of Regulations, and each shall remain in effect for no more than 180 days. (Added by Stats. 2005, Ch. 80, Sec. 4.5. Effective July 19, 2005.)
  129. 12693.51.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    A subscriber may transfer enrollment between participating health plans, subject to board regulations. The board must also arrange coverage transfers in specified cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.51. (a) A transfer of enrollment from one participating health plan to another may be made by a subscriber at times and under conditions as may be prescribed by regulations of the board. (b) The board shall provide for the transfer of coverage of any subscriber to another participating plan (1) if a contract with any participating plan under which the subscriber receives coverage is canceled or not renewed and (2) at least once a year upon request in a manner as determined by the board, and (3) if a subscriber moves to an area that the current health plan does not serve. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  130. 12693.515.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    A subscriber assigned to certain clinics or their employees is treated as assigned to the clinic for coverage purposes, not to the individual provider.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.515. (a) Effective July 1, 2004, any subscriber who affirmatively selects, or is assigned by default to, a federally qualified health center, as defined by Section 1396(d)(l)(2) of Title 42 of the United States Code, a rural health clinic, as defined by Section 1396(d)(l)(1) of Title 42 of the United States Code, or a primary care clinic that is licensed under Section 1204 of the Health and Safety Code, or is exempt from licensure under subdivision (h) of Section 1206 of the Health and Safety Code, shall be deemed to have been assigned directly to the federally qualified health center, the rural health clinic, or the primary care clinic, and not to any individual provider who performs services on behalf of the federally qualified health center, the rural health clinic, or the primary care clinic. (b) (1) When a subscriber is assigned, from any source, to a physician who is an employee of a federally qualified health center, a rural health clinic, or a primary care clinic, the assignment shall constitute an assignment to that federally qualified health center, rural health clinic, or primary care clinic for purposes of the subscriber’s health care coverage. (2) When a subscriber is assigned, from any source, to a dentist who is an employee of a federally qualified health center, a rural health clinic, or a primary care clinic, the assignment shall constitute an assignment to that federally qualified health center, rural health clinic, or primary care clinic for purposes of the subscriber’s dental coverage. (3) When a subscriber is assigned, from any source, to an optometrist who is an employee of a federally qualified health center, a rural health clinic, or a primary care clinic, the assignment shall constitute an assignment to that federally qualified health center, rural health clinic, or primary care clinic for purposes of the subscriber’s vision coverage. (c) This section shall not limit any rights a subscriber may have to select an available primary care physician within a health care service plan’s service area pursuant to Section 1373.3 of the Health and Safety Code. (Added by Stats. 2003, Ch. 139, Sec. 1. Effective January 1, 2004.)
  131. 12693.52.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board may arrange stop-loss coverage or risk-sharing arrangements to reduce the program’s financial exposure for subscriber health care costs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.52. The board may negotiate or arrange for stop-loss insurance coverage that limits the program’s fiscal responsibility for the total costs of health services provided to program subscribers, or arrange for participating health plans to share or assure the financial risk for a portion of the total cost of health care services to program subscribers, or both. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  132. 12693.53.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must develop and use cost containment measures for the program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.53. The board shall develop and utilize appropriate cost containment measures to maximize the coverage offered under the program. Those measures may include limiting the expenditure of state funds for this purpose to the price to the state for the lowest cost plan contracting with the program and creation of program rules that restrict the ability of employers or applicants to drop existing coverage in order to qualify children for the program. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  133. 12693.54.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    Contracts entered under this part are exempt from competitive bidding rules and from review or approval by any division of the Department of General Services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.54. A contract entered pursuant to this part shall be exempt from any provision of law relating to competitive bidding, and shall be exempt from the review or approval of any division of the Department of General Services. The board shall not be required to specify the amounts encumbered for each contract, but may allocate funds to each contract based on the projected or actual subscriber enrollments to a total amount not to exceed the amount appropriate for the program including family contributions. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  134. 12693.55.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. )

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    A health care provider given proof of enrollment in the program must not seek reimbursement or payment for covered services from anyone other than the patient’s participating health plan or certain board-contracting entities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 4. Administration [12693.25 - 12693.55] ( Chapter 4 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.55. (a) A health care provider who is furnished documentation of a person’s enrollment in the program shall not seek reimbursement nor attempt to obtain payment for any covered services provided to that person other than from the participating health plan covering that person or from other entities that the board enters into contracts or interagency agreements with to provide or pay for benefits under this part pursuant to Section 12693.26. (b) The provisions of subdivision (a) do not apply to any copayments required under this part for the covered services provided to the person. (c) For purposes of this section, “health care provider” means any professional person, organization, health facility, or other person or institution licensed by the state to deliver or furnish health care services. (Amended by Stats. 2011, Ch. 29, Sec. 1. (AB 102) Effective June 29, 2011.)
  135. 12693.60.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section requires subscriber coverage to meet federal coverage requirements and, unless otherwise provided, to match the health benefits state employees receive, with one mental-health inpatient care substitution option allowed. It also exempts the board’s implementing regulations from certain immediate-action and administrative review requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.60. (a) Coverage provided to subscribers shall meet the federal coverage requirements in Section 2103 of Title XXI of the Social Security Act. Except as otherwise provided in this part, the covered health benefits provided to subscribers shall be equivalent to those provided to state employees through the Public Employees’ Retirement System for the most recent plan year preceding the applicable program plan year, except that the plans may provide a mechanism for inpatient hospital care provided under the mental health benefit through which applicants may agree to a treatment plan in which each inpatient day may be substituted for two residential treatment days or three day treatment program days. (b) The adoption and readoption, by the Managed Risk Medical Insurance Board, of regulations to implement the changes made to this section by the act that added this subdivision, shall be deemed to be an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (Amended by Stats. 2011, Ch. 3, Sec. 1.5. (AB 97) Effective March 24, 2011.)
  136. 12693.61.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Participating health plans must develop referral memoranda of understanding for certain subscribers, and the board must set up reimbursement accounting and reimburse counties; counties that sign such an MOU must pay the nonfederal share.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.61. The following provisions apply for subscribers who have been identified by the participating health plans as potentially seriously emotionally disturbed. (a) Participating plans, to the extent feasible, including plans receiving purchasing credits shall develop memoranda of understanding, consistent with criteria established by the board in consultation with the State Department of Health Care Services, for referral of subscribers who are seriously emotionally disturbed to a county mental health department. This referral does not relieve a participating plan from providing the mental health coverage specified in its contract, including assessment of, and development of, a treatment plan for serious emotional disturbance. Plans may contract with county mental health departments to provide for all, or a portion of, the services provided under the program’s mental health benefit. (b) The board shall establish an accounting process under which counties providing services to subscribers who have been determined to be seriously emotionally disturbed pursuant to Section 5600.3 of the Welfare and Institutions Code can claim federal reimbursement for the services. The board shall reimburse counties pursuant to the rates set by the State Department of Health Care Services in accordance with Sections 5705, 14705.7, 14705, 14708, 14711, and 14718 of the Welfare and Institutions Code. The actual amount reimbursed by the board shall be the federal share of the cost of the subscriber. (c) This section shall only become operative with federal approval of the State Child Health Plan and the approval of federal financial participation. (d) Counties choosing to enter into a memorandum of understanding pursuant to subdivision (a) shall provide the nonfederal share of cost for the subscriber. (Amended by Stats. 2012, Ch. 34, Sec. 38. (SB 1009) Effective June 27, 2012. Section conditionally operative as provided in subd. (c).)
  137. 12693.615.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must set subscriber copayments and enforce limits on charges, while plans and coverage may not impose deductibles, preexisting-condition exclusions, or health-status-based rate differences.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.615. (a) The board shall establish the required subscriber copayment levels for specific benefits consistent with the limitations of Section 2103 of Title XXI of the Social Security Act. The copayment levels established by the board shall, to the extent possible, reflect the copayment levels established for state employees, effective January 1, 1998, through the Public Employees’ Retirement System. Except as otherwise provided in this section, under no circumstances shall copayments exceed the copayment level established for state employees for the most recent plan year preceding the applicable program plan year through the Public Employees’ Retirement System. Total annual copayments charged to subscribers shall not exceed two hundred fifty dollars ($250) per family. The board shall instruct participating health plans to work with their provider networks to provide for extended payment plans for subscribers utilizing a significant number of health services for which copayments are charged. The board shall track the number of subscribers who meet the copayment maximum in each year and make adjustments in the amount if a significant number of subscribers reach the copayment maximum. (b) No deductibles shall be charged to subscribers for health benefits. (c) Coverage provided to subscribers shall not contain any preexisting condition exclusion requirements. (d) No participating health, dental, or vision plan shall exclude any subscriber on the basis of any actual or expected health condition or claims experience of that subscriber or a member of that subscriber’s family. (e) There shall be no variations in rates charged to subscribers including premiums and copayments, on the basis of any actual or expected health condition or claims experience of any subscriber or subscriber’s family member. The only variation in rates charged to subscribers, including copayments and premiums, that shall be permitted is that which is expressly authorized by Section 12693.43. (f) There shall be no copayments for preventive services as defined in Section 1367.35 of the Health and Safety Code. (g) There shall be no annual or lifetime benefit maximums in any of the coverage provided under the program. (h) Plans that receive purchasing credits pursuant to Section 12693.39 shall comply with subdivisions (b), (c), (d), (e), (f), and (g). (i) (1) Effective October 1, 2011, or the first day of the month following 120 days after the federal approval required by subparagraphs (A) and (B) of paragraph (3), whichever occurs later, copayments for emergency room and inpatient hospital services shall be set by the board as follows: (A) Fifty dollars ($50) for outpatient emergency room services. The copayment shall be waived if the subscriber is hospitalized. (B) One hundred dollars ($100) for each hospital inpatient day up to a maximum of two hundred dollars ($200) per admission. (2) The changes made to the copayments in paragraph (1) shall not increase the maximum annual copayment of two hundred fifty dollars ($250) per family described in subdivision (a). (3) The changes made to the copayments in paragraph (1) shall be implemented only if, and to the extent that, both of the following occur: (A) The state receives prior federal authorization to implement the copayments in the form of an approved amendment to the state plan under Title XXI of the federal Social Security Act or a waiver of one or more requirements of Title XXI of the federal Social Security Act. (B) The state receives prior federal authorization for, and implements, copayments in the same amounts for all children enrolled in the Medi-Cal program through an approved amendment to the state plan under Title XIX of the federal Social Security Act or a waiver of one or more requirements of Title XIX of the federal Social Security Act. (4) Notwithstanding paragraph (1), the state shall not implement the copayments otherwise required by this subdivision at an earlier date than the state implements copayments in the same amounts for all children in the Medi-Cal program. (5) The adoption and readoption, by the Managed Risk Medical Insurance Board, of regulations to implement the changes made to this section by the act that added this subdivision, shall be deemed to be an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (Amended by Stats. 2011, Ch. 3, Sec. 1.7. (AB 97) Effective March 24, 2011.)
  138. 12693.62.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. )

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    A participating plan is not responsible for certain CCS Program-authorized services for an eligible subscriber, and it must refer suspected eligible children to the California Children’s Services Program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 5. Health Benefits and Copayments [12693.60 - 12693.62] ( Chapter 5 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.62. Notwithstanding any other provision of law, for a subscriber who is determined by the California Children’s Services Program to be eligible for benefits under the program pursuant to Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, a participating plan shall not be responsible for the provision of, or payment for, the particular services authorized by the California Children’s Services Program for the particular subscriber for the treatment of a California Children’s Services Program eligible medical condition. Participating plans shall refer a child who they reasonably suspect of having a medical condition that is eligible for services under the California Children’s Services Program to the California Children’s Services Program. The California Children’s Services Program shall provide case management and authorization of services if the child is found to be medically eligible for the California Children’s Services Program. Diagnosis and treatment services that are authorized by the California Children’s Services Program shall be performed by paneled providers for that program and approved special care centers of that program in accordance with treatment plans approved by the California Children’s Services Program. All other services provided under the participating plan shall be available to the subscriber. (Amended by Stats. 1999, Ch. 146, Sec. 17. Effective July 22, 1999.)
  139. 12693.63.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 6. Dental Benefits and Copayments [12693.63 - 12693.64] ( Chapter 6 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must set dental benefits and copayments for the program, and it may set a dental coverage cap and implement regulations. Subscribers cannot be charged copayments for preventive or diagnostic services or a deductible for dental benefits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 6. Dental Benefits and Copayments [12693.63 - 12693.64] ( Chapter 6 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.63. (a) The board shall determine the dental benefits to be provided to subscribers by the program. These benefits shall be consistent with those provided to state employees through the Department of Personnel Administration, the predecessor to the Department of Human Resources, on July 1, 1997, except that orthodontia shall only be a benefit when it is determined to be medically necessary. (b) The board shall establish the required subscriber copayment levels for dental benefits. The copayment levels established by the board shall, to the extent possible, reflect the copayment levels provided to state employees through the Department of Personnel Administration, the predecessor to the Department of Human Resources, on July 1, 1997, except that no copayment shall be charged for medically necessary orthodontia services. There shall be no subscriber copayments for preventive and diagnostic services, including, but not limited to, examinations, teeth cleaning, X-rays, topical fluoride treatments, space maintainers, and sealants. (c) No deductible shall be charged to subscribers for dental benefits. (d) (1) The board may establish a cap on the amount of dental coverage provided to a subscriber in a given benefit year effective on and after the first day of the fifth month following enactment of the 2008–09 Budget Act. This dental coverage cap shall not be lower than one thousand five hundred dollars ($1,500) per subscriber per benefit year. (2) The board may adopt, and may only one-time readopt, regulations to implement paragraph (1). The adoption and one-time readoption of a regulation authorized by this paragraph is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted for this purpose from the requirements of subdivision (b) of Section 11346.1 of the Government Code. (Amended by Stats. 2018, Ch. 903, Sec. 18. (SB 1504) Effective January 1, 2019.)
  140. 12693.64.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 6. Dental Benefits and Copayments [12693.63 - 12693.64] ( Chapter 6 added by Stats. 1997, Ch. 623, Sec. 2. )

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    A participating plan does not have to cover or pay for certain CCS-authorized services for an eligible subscriber, but all other plan services remain available.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 6. Dental Benefits and Copayments [12693.63 - 12693.64] ( Chapter 6 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.64. Notwithstanding any other provision of law, for a subscriber who is determined by the California Children’s Services Program to be eligible for benefits under the program pursuant to Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, a participating plan shall not be responsible for the provision of, or payment for, the particular services authorized by the California Children’s Services Program for the particular subscriber for the treatment of a California Children’s Services Program eligible medical condition. All other services provided under the participating plan shall be available to the subscriber. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  141. 12693.65.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 7. Vision Benefits and Copayments [12693.65 - 12693.66] ( Chapter 7 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must provide vision benefits to subscribers, set subscriber copayment levels, and make the benefits and copayments match the stated federal and state comparators as closely as the section requires.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 7. Vision Benefits and Copayments [12693.65 - 12693.66] ( Chapter 7 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.65. (a) Vision benefits shall be provided to subscribers and shall meet the federal coverage requirements in Section 2103 of Title XXI of the Social Security Act. (b) The covered benefits shall be equivalent to those provided to state employees through the Department of Human Resources, except for tinted lenses and also photochromatic lenses, unless otherwise deemed medically necessary. (c) The board shall establish the required subscriber copayment levels for vision benefits consistent with the limitations of Section 2103 of Title XXI of the Social Security Act. The copayment levels established by the board shall, to the extent possible, reflect the copayment levels provided to state employees through the Department of Human Resources. (d) From March 1, 2011, to June 30, 2012, inclusive, the adoption and readoption, by the board, of regulations to modify vision benefits pursuant to this section, including, but not limited to, restriction of providers through which covered vision benefits may be obtained, restriction of benefits for services from nonparticipating providers, or restriction of products and materials provided as benefits pursuant to this section, shall be deemed to be an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (Amended by Stats. 2012, Ch. 665, Sec. 174. (SB 1308) Effective January 1, 2013.)
  142. 12693.66.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 7. Vision Benefits and Copayments [12693.65 - 12693.66] ( Chapter 7 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    For CCS-eligible subscribers, a participating plan does not cover or pay for CCS-authorized services for the eligible condition, but must still make all other plan services available.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 7. Vision Benefits and Copayments [12693.65 - 12693.66] ( Chapter 7 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.66. Notwithstanding any other provision of law, for a subscriber who is determined by the California Children’s Services Program to be eligible for benefits under the program pursuant to Article 5 (commencing with Section 123800) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, a participating plan shall not be responsible for the provision of, or payment for, the particular services authorized by the California Children’s Services Program for the particular subscriber for the treatment of a California Children’s Services Program eligible medical condition. All other services provided under the participating plan shall be available to the subscriber. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  143. 12693.68.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 8. Linkages with Public Programs [12693.68 - 12693.69] ( Chapter 8 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must encourage plans to maintain workable protocols for screening, referral, and care coordination for children needing supplemental services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 8. Linkages with Public Programs [12693.68 - 12693.69] ( Chapter 8 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.68. The board shall encourage all plans, including those receiving purchasing credits, that provide services under the program to have viable protocols for screening and referring children needing supplemental services outside of the scope of the screening, preventive, and medically necessary and therapeutic services covered by the contract to public programs providing such supplemental services for which they may be eligible, as well as for coordination of care between the plan and the public programs. The public programs for which plans may be required to develop screening, referral, and care coordination protocols may include the California Children’s Services Program, the regional centers, county mental health programs, substance use disorder programs administered by the State Department of Health Care Services, and programs administered by local education agencies. (Amended by Stats. 2013, Ch. 22, Sec. 75. (AB 75) Effective June 27, 2013. Operative July 1, 2013, by Sec. 110 of Ch. 22.)
  144. 12693.69.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 8. Linkages with Public Programs [12693.68 - 12693.69] ( Chapter 8 added by Stats. 1997, Ch. 623, Sec. 2. )

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    Certain Healthy Families children with CCS-eligible conditions must have medically necessary treatment services authorized and paid for by the California Children’s Services Program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 8. Linkages with Public Programs [12693.68 - 12693.69] ( Chapter 8 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.69. A child enrolled in the Healthy Families Program who has a medical condition that is eligible for services pursuant to the California Children’s Services Program, and whose family is not financially eligible for the California Children’s Services Program, shall have the medically necessary treatment services for their California Children’s Services Program eligible medical condition authorized and paid for by the California Children’s Services Program. County expenditures for the payment of services for the child shall be waived and these expenditures shall be paid for by the state from Title XXI funds that are applicable and state general funds. (Added by Stats. 1999, Ch. 146, Sec. 18. Effective July 22, 1999.)
  145. 12693.70.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    An applicant must meet program eligibility rules for a child and follow enrollment, income, and contribution requirements; the board must also run income-certification processes and coordinate infant-program transitions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.70. To be eligible to participate in the program, an applicant shall meet all of the following requirements: (a) Be an applicant applying on behalf of an eligible child, which means a child who is all of the following: (1) Less than 19 years of age. An application may be made on behalf of a child not yet born up to three months prior to the expected date of delivery. Coverage shall begin as soon as administratively feasible, as determined by the board, after the board receives notification of the birth. However, no child less than 12 months of age shall be eligible for coverage until 90 days after the enactment of the Budget Act of 1999. (2) Not eligible for no-cost full-scope Medi-Cal or Medicare coverage at the time of application. (3) In compliance with Sections 12693.71 and 12693.72. (4) A child who meets citizenship and immigration status requirements that are applicable to persons participating in the program established by Title XXI of the Social Security Act, except as specified in Section 12693.76. (5) A resident of the State of California pursuant to Section 244 of the Government Code; or, if not a resident pursuant to Section 244 of the Government Code, is physically present in California and entered the state with a job commitment or to seek employment, whether or not employed at the time of application to or after acceptance in, the program. (6) (A) In either of the following: (i) In a family with an annual or monthly household income equal to or less than 200 percent of the federal poverty level. (ii) (I) When implemented by the board, subject to subdivision (b) of Section 12693.765 and pursuant to this section, a child under the age of two years who was delivered by a mother enrolled in the Access for Infants and Mothers Program as described in Part 6.3 (commencing with Section 12695). Commencing July 1, 2007, eligibility under this subparagraph shall not include infants during any time they are enrolled in employer-sponsored health insurance or are subject to an exclusion pursuant to Section 12693.71 or 12693.72, or are enrolled in the full scope of benefits under the Medi-Cal program at no share of cost. For purposes of this clause, any infant born to a woman whose enrollment in the Access for Infants and Mothers Program begins after June 30, 2004, shall be automatically enrolled in the Healthy Families Program, except during any time on or after July 1, 2007, that the infant is enrolled in employer-sponsored health insurance or is subject to an exclusion pursuant to Section 12693.71 or 12693.72, or is enrolled in the full scope of benefits under the Medi-Cal program at no share of cost. Except as otherwise specified in this section, this enrollment shall cover the first 12 months of the infant’s life. At the end of the 12 months, as a condition of continued eligibility, the applicant shall provide income information. The infant shall be disenrolled if the gross annual household income exceeds the income eligibility standard that was in effect in the Access for Infants and Mothers Program at the time the infant’s mother became eligible, or following the two-month period established in Section 12693.981 if the infant is eligible for Medi-Cal with no share of cost. At the end of the second year, infants shall again be screened for program eligibility pursuant to this section, with income eligibility evaluated pursuant to clause (i), subparagraphs (B) and (C), and paragraph (2) of subdivision (a). (II) Effective on October 1, 2013, or when the State Department of Health Care Services has implemented Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code, whichever is later, eligibility for coverage in the program pursuant to this clause shall terminate. The board shall coordinate with the State Department of Health Care Services to implement Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code, including transition of subscribers to the AIM-Linked Infants Program. The State Department of Health Care Services shall administer the AIM-Linked Infants Program, pursuant to Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code, to address the health care needs of children formerly covered pursuant to this clause. (B) All income over 200 percent of the federal poverty level but less than or equal to 250 percent of the federal poverty level shall be disregarded in calculating annual or monthly household income. (C) In a family with an annual or monthly household income greater than 250 percent of the federal poverty level, any income deduction that is applicable to a child under Medi-Cal shall be applied in determining the annual or monthly household income. If the income deductions reduce the annual or monthly household income to 250 percent or less of the federal poverty level, subparagraph (B) shall be applied. (b) The applicant shall agree to remain in the program for six months, unless other coverage is obtained and proof of the coverage is provided to the program. (c) An applicant shall enroll all of the applicant’s eligible children in the program. (d) In filing documentation to meet program eligibility requirements, if the applicant’s income documentation cannot be provided, as defined in regulations promulgated by the board, the applicant’s signed statement as to the value or amount of income shall be deemed to constitute verification. (e) An applicant shall pay in full any family contributions owed in arrears for any health, dental, or vision coverage provided by the program within the prior 12 months. (f) By January 2008, the board, in consultation with stakeholders, shall implement processes by which applicants for subscribers may certify income at the time of annual eligibility review, including rules concerning which applicants shall be permitted to certify income and the circumstances in which supplemental information or documentation may be required. The board may terminate using these processes not sooner than 90 days after providing notification to the Chair of the Joint Legislative Budget Committee. This notification shall articulate the specific reasons for the termination and shall include all relevant data elements that are applicable to document the reasons for the termination. Upon the request of the Chair of the Joint Legislative Budget Committee, the board shall promptly provide any additional clarifying information regarding implementation of the processes required by this subdivision. (Amended by Stats. 2014, Ch. 31, Sec. 35. (SB 857) Effective June 20, 2014.)
  146. 12693.71.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The board must review applications for signs that families dropped employer-sponsored dependent coverage to join the program, may reject applications when the children had employer-sponsored insurance within the last three months, and must create exceptions in specified hardship-type cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.71. (a) The board shall monitor applications to determine whether employers and employees have dropped employer-sponsored dependent coverage in order to participate in the program. (b) The board may disapprove an application if it is determined that the children to be covered under the application were covered by an employer-sponsored insurance within the last three months. (c) If the board imposes the limitation identified in subdivision (b) or (d), it shall also establish exceptions to this limitation in cases where prior coverage ended due to reasons unrelated to the availability of the program. This shall include, but not be limited to: (1) Loss of employment due to factors other than voluntary termination. (2) Change to a new employer that does not provide an option for dependent coverage. (3) Change of address so that no employer sponsored coverage is available. (4) Discontinuation of health benefits to all employees of the applicant’s employer. (5) Expiration of COBRA coverage period. (6) Coverage provided pursuant to an exemption authorized under subdivision (i) of Section 1367 of the Health and Safety Code. (d) If the board determines, based on evidence gathered during a reasonable period of program operation, that a substantial share of funds expended for the program are providing health coverage for children that have discontinued employer-based coverage in order to enter the program or if required by the federal government for state plan approval, the board may take actions to increase the three-month time limit specified in subdivision (b), to such a time limit that cannot exceed six months. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  147. 12693.72.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board may disapprove an application in limited circumstances involving prior coverage, but only if federal law requires it. If it uses a time limit, that limit cannot be longer than the federal requirement, and the board must create exceptions for certain non-program-related prior coverage ends.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.72. (a) The board may disapprove an application if it is determined that the children to be covered under the application were covered by an individual health care service plan contract or individual disability insurance policy during a specified period of time prior to the date of application only if required by the federal government for state plan approval. This time limitation period shall not exceed the time period required by the federal government. (b) If the board imposes the time limitation identified in subdivision (a), it shall also establish exceptions to this limitation in cases where the prior coverage ended due to reasons unrelated to the availability of the program. This shall include, but not be limited to, the prior coverage being pursuant to a health plan operating pursuant to an exemption authorized by subdivision (i) of Section 1367 of the Health and Safety Code. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  148. 12693.73.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Children excluded from Title XXI coverage are generally not eligible for coverage under this program, with stated exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.73. Notwithstanding any other provision of law, children excluded from coverage under Title XXI of the Social Security Act are not eligible for coverage under the program, except as specified in clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a) of Section 12693.70 and Section 12693.76. (Amended by Stats. 2003, Ch. 230, Sec. 19. Effective August 11, 2003.)
  149. 12693.74.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The child remains continuously eligible for the program up to age five, but only if federal financial participation is available and subdivision (e) is satisfied.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.74. (a) To the extent federal financial participation is available, and subject to subdivision (e), the child shall remain continuously eligible for the program up to five years of age. The department shall seek any federal approvals that may be necessary to implement this subdivision. (b) (1) Implementation of this section is contingent on all of the following conditions: (A) All necessary federal approvals have been obtained by the department pursuant to subdivision (e). (B) The Legislature has appropriated funding to implement this section after a determination that ongoing General Fund resources are available to support the ongoing implementation of this section in the 2024–25 fiscal year and subsequent fiscal years. (C) The department has determined that systems have been programmed to implement this section. (2) The department shall issue a declaration certifying the date that all conditions in paragraph (1) have been met. The department shall post the declaration on its internet website and provide a copy of the declaration to the Secretary of State, the Secretary of the Senate, the Chief Clerk of the Assembly, and the Legislative Counsel. (c) If at any time the director determines that the eligibility criteria established under this section for the program may jeopardize the state’s ability to receive federal financial participation under the federal Patient Protection and Affordable Care Act (Public Law 111-148), any amendment or extension of that act, or any similar federal legislation affecting federal financial participation, the director may alter the eligibility criteria to the extent necessary for the state to receive that federal financial participation. (d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and Chapter 4 (commencing with Section 12693.25) and Part 6.1 (commencing with Section 12670), the department may implement, interpret, or make specific this section, in whole or in part, through all-county letters or similar instructions, without taking any further regulatory action. (e) This section shall be implemented only to the extent that any necessary federal approvals are obtained, and federal financial participation is available and not otherwise jeopardized. (f) (1) If the voters approve the addition of Chapter 7.5 (commencing with Section 14199.100) to Part 3 of Division 9 of the Welfare and Institutions Code at the November 5, 2024, statewide general election, this section shall become operative on January 1, 2025, or the date certified by the department pursuant to paragraph (2) of subdivision (b), whichever is later. (2) If the voters do not approve the addition of Chapter 7.5 (commencing with Section 14199.100) to Part 3 of Division 9 of the Welfare and Institutions Code at the November 5, 2024, statewide general election, this section shall be repealed as of January 1, 2025. (Amended (as added by Stats. 2022, Ch. 47, Sec. 36) by Stats. 2024, Ch. 40, Sec. 25. (SB 159) Effective June 29, 2024. Section conditionally operative on January 1, 2025, or later, as prescribed by its own provisions.)
  150. 12693.75.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The program must use a simple mail-in application process, and for certain referred children it must use the school lunch application and related supplemental forms to decide eligibility.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.75. (a) The program shall make use of a simple and easy to understand mail-in application process. (b) For children referred pursuant to Section 14005.41 of the Welfare and Institutions Code, the program shall utilize the school lunch application and any supplemental forms received pursuant to Section 14005.41 of the Welfare and Institutions Code to make an eligibility determination and shall request additional information only as needed to complete the eligibility process. (c) The Managed Risk Medical Insurance Board may adopt emergency regulations to implement subdivision (b) and coordinate with all other state and local government entities in the implementation of Section 49557.2 of the Education Code and Section 14005.41 of the Welfare and Institutions Code. Any rules and regulations issued by the board pertaining to the implementation of this section may be adopted as emergency 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). The adoption and one readoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare, and shall be exempt from review by the Office of Administrative Law. Any emergency regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and publication in the California Code of Regulations, and shall remain in effect for not more than 180 days unless the department readopts those regulations. The regulations shall become effective immediately upon filing with the Secretary of State. (Amended by Stats. 2004, Ch. 729, Sec. 2. Effective January 1, 2005.)
  151. 12693.755.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must expand eligibility for this part, starting four months after federal approval of the related waiver, and must implement a coverage program for eligible uninsured parents and responsible adults.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.755. (a) Subject to subdivision (b), commencing four months after the initial federal approval is obtained pursuant to the waiver described in subdivision (b), the board shall expand eligibility under this part to uninsured parents of, and as defined by the board, adults responsible for, children enrolled to receive coverage under this part or who are enrolled to receive the full scope of Medi-Cal services with no share of cost and whose income does not exceed 250 percent of the federal poverty level, before applying the income disregard provided for in subparagraph (B) of paragraph (6) of subdivision (a) of Section 12693.70. (b) (1) The board shall implement a program to provide coverage under this part to any uninsured parent or responsible adult who is eligible pursuant to subdivision (a), pursuant to the waiver identified in paragraph (2). (2) The program shall be implemented only in accordance with a State Child Health Insurance Program waiver pursuant to Section 1397gg(e)(2)(A) of Title 42 of the United States Code, to provide coverage to uninsured parents and responsible adults, and shall be subject to the terms, conditions, and duration of the waiver. The services shall be provided under the program only if the waiver is approved by the federal Centers for Medicare and Medicaid Services, and, except as provided under the terms and conditions of the waiver, only to the extent that federal financial participation is available and funds are appropriated specifically for this purpose. (Amended by Stats. 2001, Ch. 171, Sec. 15. Effective August 10, 2001.)
  152. 12693.76.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    This section says a child, and an uninsured parent or responsible adult, cannot be made ineligible solely because of the person’s date of entry into the United States, but implementation depends on the annual Budget Act and available funding.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.76. (a) Notwithstanding any other provision of law, a child who meets the definition of the term defined in subsection (b) or (c) of Section 1641 of Title 8 of the United States Code shall not be determined ineligible solely on the basis of the child’s date of entry into the United States. (b) Notwithstanding any other provision of law, subdivision (a) may only be implemented to the extent provided in the annual Budget Act. (c) Notwithstanding any other provision of law, any uninsured parent or responsible adult who meets the definition of the term defined in subsection (b) or (c) of Section 1641 of Title 8 of the United States Code shall not be determined to be ineligible solely on the basis of that person’s date of entry into the United States. (d) Notwithstanding any other provision of law, subdivision (c) may only be implemented to the extent of funding provided in the annual Budget Act. (Amended by Stats. 2021, Ch. 296, Sec. 37. (AB 1096) Effective January 1, 2022.)
  153. 12693.765.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    A specified child is treated as eligible to participate in the program at birth, but only subject to subdivision (b).

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 9. Eligibility [12693.70 - 12693.765] ( Chapter 9 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.765. (a) Notwithstanding any other provision of law and subject to subdivision (b), a child described in clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a) of Section 12693.70 shall be deemed eligible to participate in the program at birth. (b) Notwithstanding any other provision of law, subdivision (a) and clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a) of Section 12693.70 may only be implemented to the extent that funds are appropriated for that purpose in the annual Budget Act or other statute. (Added by Stats. 2003, Ch. 230, Sec. 20. Effective August 11, 2003.)
  154. 12693.77.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 10. Fiscal Integrity [12693.77- 12693.77.] ( Chapter 10 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must develop safeguards for program integrity, may share applicant and subscriber data with Health Services for Medi-Cal eligibility determinations, and false eligibility declarations can lead to misdemeanor liability and up to one year of coverage denial.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 10. Fiscal Integrity [12693.77- 12693.77.] ( Chapter 10 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.77. (a) The board shall develop safeguards to assure the fiscal integrity of the program. (b) The program shall ensure that subscribers are not eligible for no-cost full-scope Medi-Cal coverage. The board may provide data on applicants and subscribers to the State Department of Health Services for determination of Medi-Cal eligibility. The State Department of Health Services shall identify those subscribers enrolled in the program who are concurrently enrolled in Medi-Cal with no share of cost. (c) Any person who intentionally makes false declarations as to his or her eligibility or any person who intentionally makes false declarations as to eligibility on behalf of any other person seeking eligibility under this part for which that person is not eligible shall be guilty of a misdemeanor. (d) Plans and providers shall be subject to Section 550 of the Penal Code. (e) Any person who intentionally makes false declarations as to his or her eligibility or any person who intentionally makes false declarations as to eligibility on behalf of any other person seeking eligibility under this part for which that person is not eligible may be denied coverage for up to one year from the date of the denial of coverage by the board. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  155. 12693.80.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must use due diligence when creating participation standards for the program, and the standards should minimize incentives to drop or reduce dependent health coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.80. The board shall use due diligence in the creation of participation standards for the program that minimize the incentive for employers or applicants to drop or reduce dependent health coverage. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  156. 12693.81.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Insurers, insurance agents or brokers, and administrators must not refer or arrange applications for the program when the purpose is to separate an employee or dependent from group health coverage. An employee applicant has a personal right of action to enforce this rule.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.81. (a) It shall constitute unfair competition for purposes of Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code for an insurer, an insurance agent or broker, or an administrator, as defined in Section 1759, to refer an individual employee or employee’s dependent to the program, or arrange for an individual employee or employee’s dependent to apply for the program, for the purpose of separating that employee or employee’s dependent from group health coverage in connection with the employee’s employment. (b) Any employee applicant in subdivision (a) shall have personal right of action to enforce subdivision (a). (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  157. 12693.82.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    An employer must not refer an employee or dependent to the program, or arrange an application to it, if the purpose is to separate them from group health coverage tied to employment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.82. It shall constitute an unfair labor practice contrary to public policy, and enforceable under Section 95 of the Labor Code, for any employer to refer an individual employee or employee’s dependent to the program, or to arrange for an individual employee or employee’s dependent to apply to the program, for the purpose of separating that employee or employee’s dependent from group health coverage provided in connection with the employee’s employment. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  158. 12693.83.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    An employer may not change employee cost-sharing or coverage to make employees or their dependents enroll in the program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.83. (a) It shall constitute an unfair labor practice contrary to public policy and enforceable under Section 95 of the Labor Code for any employer to change the employee-employer share-of-cost ratio based upon the employee’s wage base or job classification or to make any modification of coverage for employees and employee’s dependents in order that the employees or employee’s dependents enroll in the program established pursuant to this part. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  159. 12693.84.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    For certain sections, “group health coverage” includes specified group disability insurance policies, group health care service plan contracts, and self-insured employee welfare benefit plans.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 11. Protection Against Substitution of Benefits [12693.80 - 12693.84] ( Chapter 11 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.84. For purposes of Sections 12693.82 and 12693.83, group health coverage includes any group disability insurance policy covering hospital, medical, or surgical expenses, group health care service plan contract, or self-insured employee welfare benefit plan. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  160. 12693.85.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    An applicant may appeal certain written program decisions to the board.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.85. Program decisions described in this section may be appealed to the board. If an applicant believes that a written decision on one of the following specified issues was made in violation of the program statutes or regulations, or other written representation of program policy made to the individual by the program or the board, that individual may file an appeal with the board. Decisions that may be appealed are the following: (a) A decision that a child is not qualified to participate or continue to participate in the program. (b) A decision that a child is not eligible for enrollment or continuing enrollment in the program. (c) A decision as to the effective date of coverage. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  161. 12693.86.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    An appeal must be filed in writing with the executive director within 60 calendar days, and it must include specified supporting information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.86. (a) An appeal shall be filed in writing with the executive director within 60 calendar days of the date of the notice of the decision being appealed. (b) An appeal shall include all of the following: (1) A copy of any decision being appealed, or a written statement of the action or failure to act being appealed. (2) A statement specifically describing the issues that are disputed by the appellant. (3) A statement specifically describing the program statute or regulation, or other written representation of program policy that the appellant believes the program or board violated. (4) A statement of the resolution requested by the appellant. (5) Any other relevant information the appellant wants to include. (c) Any appeal that does not specifically allege a violation of a program statute or regulation, or other written representation of program policy will be deemed to be a request for program review pursuant to Section 12693.88. (d) An appeal that specifically alleges a violation of program statute or regulation or other written representation of program policy, but fails to include any other necessary information, shall be returned to the appellant without review. The appellant may resubmit the appeal. The resubmittal shall be filed within the time limits of subdivision (a) or within 20 calendar days of the receipt of the returned appeal, whichever is later. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  162. 12693.87.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Appellants who file an appeal get an initial administrative review, and they may seek further review and later request a hearing if they are dissatisfied with the executive director’s decision.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.87. (a) Any appellant who files an appeal pursuant to Section 12693.85 shall receive an initial administrative review of the appeal. (b) Administrative reviews of appeals shall be conducted in two steps. Each appeal will be reviewed by the program to determine if the requested resolution is required by the statutes and regulations governing the program, or required in order to be consistent with a written representation of program policy made by the program or the board. If so, the appropriate action will be taken within 30 days of the receipt of the appeal, and the appellant will be notified. If not, the appellant will be so notified within 30 days of the receipt of the appeal and informed that he or she may request review by the executive director. This request must be filed in writing with the executive director within 30 days of the date of the notice of the program determination and shall include the information specified in subdivision (b) of Section 12693.86. (c) In conducting an administrative review of an appeal, the executive director may contact the appellant and any other party for further information. (d) The executive director’s decision shall be in writing. (e) The appellant retains the right to request an administrative hearing if the appellant is not satisfied with the decision of the executive director. Such a request shall be filed within 30 calendar days of receipt of the executive director’s decision. It shall include a clear and concise statement of what action is being appealed, and the reasons the executive director’s decision is not correct. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  163. 12693.88.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must establish a program review process, and some subscribers or purchasing credit members may ask for a program decision to be reviewed if they cannot file an appeal.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.88. In addition to the appeal process established above, the board shall establish a program review process. If a subscriber or purchasing credit member is not eligible to file an appeal pursuant to Section 12693.85, but wants to have any program decision reviewed, he or she may request that the program review the decision. A review pursuant to this section is separate from and independent of an appeal pursuant to Section 12693.85, and a person that files a request pursuant to this section shall not, thereby, gain any right of appeal. Pursuant to Section 12693.49, any dissatisfaction with an action of a participating health, vision, or dental plan shall be resolved with the plan rather than by requesting program review. When an appeal that requests an administrative hearing is received, the appeal shall be set for hearing as provided in Section 12693.89. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  164. 12693.89.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    Appeals hearings must follow the cited California regulations as modified here, and the board has specific timing and procedure options.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 12. Appeals [12693.85 - 12693.89] ( Chapter 12 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.89. (a) Administrative hearings of appeals shall be conducted according to the appeal procedures, including pre- and post-hearing procedures, set forth in Article 3 (commencing with Section 1140) of Chapter 2 of Division 2 of Title 1 of the California Code of Regulations. Article 3 (commencing with Section 1140) is hereby incorporated by reference, subject to the following modifications: (1) Reference to the Health and Welfare Agency or the component department shall be deemed reference to the Managed Risk Medical Insurance Board. (2) Reference to the private nonprofit human service organization shall be deemed reference to the appellant. (3) Reference to Health and Safety Code sections providing the bases, grounds, authorization, or procedures for appeals shall be deemed reference to the bases and authorization, for appeal found in Section 12693.85 and the appeal procedures found in this section. (4) The 30-day time period specified in subdivision (b) of Section 1140 of Title 1 of the California Code of Regulations shall be extended to 60 days, and the 10-day time period in subdivision (a) of Section 1141 of Title 1 of the California Code of Regulations shall be extended to 30 days. (5) If the proposed decision submitted to the board is not adopted as the decision, the board may itself decide the case on the record, or may refer the case to the same hearing officer to take additional evidence. If the case is referred back to the hearing officer, the hearing officer shall prepare a new proposed decision based on the additional evidence and the record of the prior hearing. (6) The decision of the board shall be issued within 90 days following the initial hearing or, if the case is referred back to the hearing officer, within 90 days of the second hearing. (b) The board may elect to have a hearing conducted by an Administrative Law Judge employed by the Office of Administrative Hearings pursuant to the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  165. 12693.91.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 14. Rural Demonstration Project [12693.91 - 12693.915] ( Chapter 14 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The department may run up to five rural demonstration projects and must set eligibility and grant-review criteria after public comment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 14. Rural Demonstration Project [12693.91 - 12693.915] ( Chapter 14 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.91. (a) The State Department of Health Services, in conjunction with the Managed Risk Medical Insurance Board, the County Medical Services Program board, and the Rural Health Policy Council, may develop and administer up to five demonstration projects in rural areas that are likely to contain a significant level of uninsured children, including seasonal and migratory worker dependents. In addition to any other funds provided pursuant to this section the grants for demonstration projects may include funds pursuant to subdivision (d). (b) The purpose of the demonstration projects shall be to fund rural collaborative health care networks to alleviate unique problems of access to health care in rural areas. (c) The State Department of Health Services, in conjunction with the Managed Risk Medical Insurance Board and Rural Health Policy Council, shall establish the criteria and standards for eligibility to be used in requests for proposals or requests for application, the application review process, determining the maximum amount and number of grants to be awarded, preference and priority of projects, and compliance monitoring after receiving comment from the public. (d) The grants may include funds for purchasing equipment, making capital expenditures, and providing infrastructure, including, but not limited to, salaries and payment of leaseholds. The funds under this subdivision may only be awarded to qualified eligible health care entities as determined by the State Department of Health Services. Title to any equipment or capital improvement purchased or acquired with grant funds shall vest in the grantee for the public good and not the state. Capital expenditures shall not include the acquisition of land. Notwithstanding subdivision (e), this subdivision shall be implemented only when funds are appropriated in the annual Budget Act or another statute to fund the cost of implementing this subdivision. (e) This section shall only become operative upon federal approval of the state plan or subsequent amendments for the program and approval of federal financial participation. (Amended by Stats. 2003, Ch. 230, Sec. 21. Effective August 11, 2003. Section operative as prescribed in subd. (e).)
  166. 12693.915.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 14. Rural Demonstration Project [12693.91 - 12693.915] ( Chapter 14 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The Legislature says rural demonstration project funding should be used prudently and cost-efficiently, including seeking federal matching funds and using specified accounts and federal funds for the Healthy Families Program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 14. Rural Demonstration Project [12693.91 - 12693.915] ( Chapter 14 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.915. (a) It is the intent of the Legislature to utilize fiscal resources in the most prudent and cost-efficient manner and to maximize the use of federal funds for services when feasible. Therefore, the Legislature intends to access funds from the Unallocated Account in the Cigarette and Tobacco Products Surtax Fund created in Section 30122 of the Revenue and Taxation Code, and as appropriated in the annual Budget Act, and to use these funds to obtain a 65-percent federal match through California’s allocation from the State Children’s Health Insurance Program (SCHIP). These funds will then be used under the state’s Healthy Families Program specifically for the rural demonstration projects established in Section 12693.91. (b) Notwithstanding Section 30122 of the Revenue and Taxation Code, funding for the rural demonstration projects as provided under the Health Families Program may be made available from the funds appropriated from the Unallocated Account in the Cigarette and Tobacco Products Surtax Fund and from funding received pursuant to Title XXI of the federal Social Security Act. These funds shall be used as provided under Section 12693.91. (c) Subdivision (b) constitutes an amendment of the Tobacco Tax and Health Protection Act of 1988, as added by Proposition 99. (Added by Stats. 2003, Ch. 161, Sec. 1. Effective August 2, 2003.)
  167. 12693.92.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The program must prepare an annual report and give copies to the Legislature and other interested parties. The board must add specified preventive-services and child-health information to the report and promptly share federal submittals and later amendments with legislative committees.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.92. (a) The program shall prepare an annual report in conformance with the requirements of Section 2108 of Title XXI of the Social Security Act (P.L. 105-33). A copy of the report shall be provided to the Legislature and other interested parties. (b) As soon as possible, but no later than July 1, 2000, the board shall include in its annual report information on (1) how assurance of preventive services by health plans and health care providers is achieved; (2) the performance of health plans and providers in providing preventive services and addressing barriers to service delivery; and (3) the mechanism or mechanisms that will be used to identify changes over time in the health status of children enrolled in the program. Beginning no later than July 1, 2001, the report shall include information about changes in the health status of children participating in the program. (c) The board shall immediately provide the fiscal and policy committees of the Legislature with a copy of their submittal to the federal government to meet the requirements for state plan provisions as contained in Chapter 1 of Title XXI of the Social Security Act. Any and all subsequent amendments to the state plan shall also be provided accordingly. (Added by Stats. 1997, Ch. 623, Sec. 2. Effective January 1, 1998.)
  168. 12693.925.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The Managed Risk Medical Insurance Board must report specified information to the Legislature and seek input from advisory and stakeholder groups.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.925. (a) The Managed Risk Medical Insurance Board shall report to the Legislature on or before January 30, 2004, the following information with respect to the State Children’s Health Insurance Program: (1) A list of the categories of vulnerable children who should be the targets of public health initiatives, including, but not limited to, immigrant children, homeless children, and other children that face health disparities. (2) Recommendations on innovative methods available under the federal program for addressing health needs and barriers to care for the identified groups of vulnerable children. The board shall report as many recommendations as possible that are available under the federal program and the expected impact of each recommendation. (3) Recommendations on innovative methods available under the federal program for developing in urban areas initiatives similar to the rural demonstration projects. The board shall report as many recommendations as possible that are available under the federal program and the expected impact of each recommendation. (b) The board shall seek input, at regularly scheduled meetings of the board, from the Healthy Families Advisory Panel and stakeholder organizations, including, but not limited to, organizations that represent immigrant and homeless populations, other communities that experience health disparities, and traditional providers of care to low-income populations. (c) This section shall be implemented only to the extent that federal financial participation is obtained. (Added by Stats. 2002, Ch. 800, Sec. 2. Effective January 1, 2003.)
  169. 12693.93.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board must prepare an evaluation of the program and related state efforts to expand coverage to children, and include specific measures of preventive services and children’s health status over time.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.93. The board shall prepare an evaluation of the program and other state efforts to expand coverage to children in conformance with Section 2108 of Title XXI of the Social Security Act. The evaluation shall incorporate measurement of the delivery of preventive services by health plans and health care providers and assessment of changes over time in the health status of children participating in the program. (Amended by Stats. 2001, Ch. 745, Sec. 156. Effective October 12, 2001.)
  170. 12693.95.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. )

    Verify source ↗

    The board and the State Department of Health Care Services must prepare reports, request and collect data, and, in some cases, negotiate agreements about drug and alcohol treatment services for children in the Healthy Families Program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 15. Reports [12693.92 - 12693.95] ( Chapter 15 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.95. (a) The board in consultation with the Department of Alcohol and Drug Programs shall provide the Legislature by April 15, 1998, a proposal assessing the viability of providing additional drug and alcohol treatment services for children enrolled in the program. If the board determines that it is feasible to provide additional federal funds received pursuant to Title XXI (commencing with Section 2101) of the Social Security Act to counties to finance drug and alcohol services and required federal approval is obtained, the board shall negotiate with participating health plans to establish memoranda of understanding between plans and counties to facilitate referral of children in need of these services. (b) Based on the April 15, 1998, report by the board to the Legislature, the Legislature finds and declares that there is a statewide gap in publicly funded alcohol and other drug treatment for adolescents which is significant and systemic. (1) Therefore, the State Department of Health Care Services, in cooperation with the board, shall do the following: (A) Review capacity needs for the Healthy Families Program target group after year one data has been collected and an assessment of the adequacy of the benefit can be made. (B) Request that counties provide data on the number of adolescents requesting alcohol and other drug treatment and whether they are participating in the Healthy Families Program. (2) The board shall do the following: (A) Request the participating health plans to voluntarily collect data, as prescribed by the board, on the number of children needing services that exceed the substance abuse benefit in their plan. (B) Upon contract renewal, require participating health plans to collect and report the data. (C) By September 1, 1999, provide the policy and fiscal committees of the Legislature with an analysis of the data obtained by the Department of Alcohol and Drug Programs and from the participating health plans. (Amended by Stats. 2013, Ch. 22, Sec. 76. (AB 75) Effective June 27, 2013. Operative July 1, 2013, by Sec. 110 of Ch. 22.)
  171. 12693.96.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16. Funds [12693.96 - 12693.97] ( Chapter 16 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The section creates the Healthy Families Fund and lets the board control spending from it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16. Funds [12693.96 - 12693.97] ( Chapter 16 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.96. (a) There is hereby created in the State Treasury the Healthy Families Fund which is, notwithstanding Section 13340 of the Government Code, continuously appropriated to the board for the purposes specified in this part.(b) The board shall authorize the expenditure from the fund of any state funds, federal funds, or family contributions deposited into the fund. This shall include the authority for the board to authorize the State Department of Health Services to transfer funds appropriated to the department for the program to the Healthy Families Fund, and to also deposit those funds in, and to disburse those funds from, the Healthy Families Fund. (c) Notwithstanding any other provision of law, this part shall be implemented only if, and to the extent that, as provided under Title XXI of the Social Security Act, federal financial participation is available and state plan approval is obtained, except as specified in Section 12693.76. (d) Nothing in this part is intended to establish an entitlement for individual coverage. (Added by renumbering Section 12963.96 by Stats. 1999, Ch. 146, Sec. 23. Effective July 22, 1999.)
  172. 12693.97.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16. Funds [12693.96 - 12693.97] ( Chapter 16 added by Stats. 1997, Ch. 623, Sec. 2. )

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    The State Department of Health Services and the board may look for and use federal-law options to use charitable funding as matching money for federal funds.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16. Funds [12693.96 - 12693.97] ( Chapter 16 added by Stats. 1997, Ch. 623, Sec. 2. ) ## 12693.97. The State Department of Health Services and the board may explore and utilize any options available under federal law to allow the use of charitable funding as a match for federal funds for use in the provision of coverage by private and public not-for-profit organizations consistent with the provisions of this part. (Added by renumbering Section 12963.97 by Stats. 1999, Ch. 83, Sec. 129. Effective January 1, 2000.)
  173. 12693.98.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. )

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    This section creates a bridge benefits program that gives eligible children one month of Healthy Families coverage, administered by the board and 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 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. ) ## 12693.98. (a) (1) The Medi-Cal-to-Healthy Families Bridge Benefits Program is hereby established to provide any child who meets the criteria set forth in subdivision (b) with a one calendar-month period of health care benefits in order to provide the child with an opportunity to apply for the Healthy Families Program established under Chapter 16 (commencing with Section 12693). (2) The Medi-Cal-to-Healthy Families Bridge Benefits Program shall be administered by the board and the State Department of Health Care Services. (b) (1) Any child who meets all of the following requirements shall be eligible for one calendar month of Healthy Families benefits funded by Title XXI of the Social Security Act, known as the State Children’s Health Insurance Program: (A) He or she has been receiving, but is no longer eligible for, full-scope Medi-Cal benefits without a share of cost. (B) He or she is eligible for full-scope Medi-Cal benefits with a share of cost. (C) He or she is under 19 years of age at the time he or she is no longer eligible for full-scope Medi-Cal benefits without a share of cost. (D) He or she has family income at or below 200 percent of the federal poverty level. (E) He or she is not otherwise excluded under the definition of “targeted low-income child” under subsections (b)(1)(B)(ii), (b)(1)(C), and (b)(2) of Section 2110 of the Social Security Act (42 U.S.C. Secs. 1397jj(b)(1)(B)(ii), 1397jj(b)(1)(C), and 1397jj(b)(2)). (2) The one calendar month of benefits under this chapter shall begin on the first day of the month following the last day of the receipt of benefits without a share of cost. (c) The income methodology for determining a child’s family income, as required by paragraph (1) of subdivision (b) shall be the same methodology used in determining a child’s eligibility for the full scope of Medi-Cal benefits. (d) The one calendar-month period of Healthy Families benefits provided under this chapter shall be identical to the scope of benefits that the child was receiving under the Medi-Cal program without a share of cost. (e) The one calendar-month period of Healthy Families benefits provided under this chapter shall only be made available through a Medi-Cal provider or under a Medi-Cal managed care arrangement or contract. (f) Except as provided in subdivision (j), nothing in this section shall be construed to provide Healthy Families benefits for more than a one calendar-month period under any circumstances, including the failure to apply for benefits under the Healthy Families Program or the failure to be made aware of the availability of the Healthy Families Program, unless the circumstances described in subdivision (b) reoccur. (g) (1) This section shall become operative on the first day of the second month following the effective date of this section, subject to paragraph (2). (2) Under no circumstances shall this section become operative until, and shall be implemented only to the extent that, all necessary federal approvals, including approval of any amendments to the State Child Health Plan have been sought and obtained and federal financial participation under the federal State Children’s Health Insurance Program, as set forth in Title XXI of the Social Security Act, has been approved. (h) This section shall become inoperative if an unappealable court decision or judgment determines that any of the following apply: (1) The provisions of this section are unconstitutional under the United States Constitution or the California Constitution. (2) The provisions of this section do not comply with the State Children’s Health Insurance Program, as set forth in Title XXI of the Social Security Act. (3) The provisions of this section require that the health care benefits provided pursuant to this section are required to be furnished for more than two calendar months. (i) If the State Child Health Insurance Program waiver described in Section 12693.755 is approved, and at the time the waiver is implemented, the benefits described in this section shall also be available to persons who meet the eligibility requirements of the program and are parents of, or, as defined by the board, adults responsible for, children enrolled to receive coverage under this part or enrolled to receive full-scope Medi-Cal services with no share of cost. (j) The one month of benefits provided in this section shall be increased to two months commencing on implementation of the waiver referred to in Section 12693.755. (k) This section shall cease to be implemented on the date that the Director of Health Care Services executes a declaration stating that implementation of the Healthy Families Presumptive Eligibility Program established pursuant to Section 12693.98a has commenced, and as of that date is repealed. (Amended by Stats. 2007, Ch. 483, Sec. 39. Effective January 1, 2008. Section operative as prescribed in subd. (g). Conditionally inoperative as provided in subd. (h). Repealed as of date prescribed in subd. (k). Note: Operational conditions in subd. (g) originated in the addition by Stats. 1998, Ch. 310.)
  174. 12693.981.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. )

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    This section creates a bridge benefits program for eligible Healthy Families enrollees and assigns the board to administer it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. ) ## 12693.981. (a) (1) The Healthy Families-to-Medi-Cal Bridge Benefits Program is hereby established to provide any person enrolled for coverage under this part who meets the criteria set forth in subdivision (b) with a two calendar-month period of health care benefits in order to provide the person with an opportunity to apply for Medi-Cal. (2) The Healthy Families-to-Medi-Cal Bridge Benefits Program shall be administered by the board. (b) (1) Any person who meets all of the following requirements shall be eligible for two additional calendar months of Healthy Families benefits: (A) He or she has been receiving, but is no longer eligible for, benefits under the program. (B) He or she appears to be income eligible for full-scope Medi-Cal benefits without a share of cost. (2) The two additional calendar months of benefits under this chapter shall begin on the first day of the month following the last day of the person’s eligibility for benefits under the program. (c) The two-calendar-month period of Healthy Families benefits provided under this chapter shall be identical to the scope of benefits that the person was receiving under the program. (d) Nothing in this section shall be construed to provide Healthy Families benefits for more than a two calendar-month period under any circumstances, including the failure to apply for benefits under the Medi-Cal program or the failure to be made aware of the availability of the Medi-Cal program unless the circumstances described in subdivision (b) reoccur. (e) This section shall become inoperative if an unappealable court decision or judgment determines that any of the following apply: (1) The provisions of this section are unconstitutional under the United States Constitution or the California Constitution. (2) The provisions of this section do not comply with the State Children’s Health Insurance Program, as set forth in Title XXI of the federal Social Security Act. (3) The provisions of this section require that the health care benefits provided pursuant to this section are required to be furnished for more than two calendar months. (f) The board shall cease to provide the benefits described in this section to any additional individuals on the date that the State Department of Health Care Services implements the presumptive eligibility program established pursuant to Section 14011.65b of the Welfare and Institutions Code and the Director of Health Care Services executes a declaration pursuant to subdivision (d) of that section stating that the program of presumptive eligibility has commenced. The board shall consult and coordinate with the State Department of Health Care Services in implementing presumptive eligibility under Section 14011.65b of the Welfare and Institutions Code for these individuals. (g) This section shall be repealed six months after the board ceases to provide benefits to additional individuals pursuant to this section. (Amended by Stats. 2007, Ch. 188, Sec. 20. Effective August 24, 2007. Repealed as of date prescribed by its own provisions.)
  175. 12693.982.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. )

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    This section defines “Medi-Cal” for this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. ) ## 12693.982. For purposes of this chapter, “Medi-Cal” means the state health care program established pursuant to Chapter 14 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code. (Added by Stats. 2001, Ch. 171, Sec. 17. Effective August 10, 2001.)
  176. 12693.98a

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. )

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    This section creates the Healthy Families Presumptive Eligibility Program, sets eligibility rules for children, and assigns administration and processing duties to the board, county, department, and Director of Health Care Services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. ) ## 12693.98a. (a) (1) The Healthy Families Presumptive Eligibility Program is hereby established to provide any child who meets the criteria set forth in subdivision (b) with presumptive eligibility benefits until the board has determined the child’s eligibility for the Healthy Families Program. (2) The Healthy Families Presumptive Eligibility Program shall be administered by the board. (b) (1) Any child who meets both of the following requirements shall be eligible for presumptive eligibility benefits under the Healthy Families Presumptive Eligibility Program: (A) He or she has been receiving, but is no longer eligible for, full-scope Medi-Cal benefits without a share of cost, or he or she is eligible for full-scope Medi-Cal benefits with a share of cost. (B) He or she otherwise appears to meet the income eligibility criteria for the Healthy Families Program. (2) The presumptive eligibility benefits under this section shall begin on the first day of the month following the last day of the receipt of Medi-Cal benefits without a share of cost. Presumptive eligibility benefits under this section shall terminate at the end of the month in which a child’s effective date in the Healthy Families Program begins or the end of the month in which the board determines that the child is not eligible for the Healthy Families Program. If the board determines that the child is eligible for the Healthy Families Program, the board shall enroll the child in the Healthy Families Program without an interruption in coverage. If the board determines that the child is ineligible for the Healthy Families Program, the board shall terminate the child’s benefits under the Healthy Families Presumptive Eligibility Program. (c) The income methodology for determining a child’s family income for the purposes of the Healthy Families Presumptive Eligibility Program, as required by paragraph (1) of subdivision (b), shall be the same methodology used in determining a child’s eligibility for the full scope of Medi-Cal benefits. (d) The scope of presumptive eligibility benefits provided under the Healthy Families Presumptive Eligibility Program shall be identical to the scope of benefits that the child was receiving under the Medi-Cal program without a share of cost. (e) The presumptive eligibility benefits provided under this section shall only be made available through a Medi-Cal provider or under a Medi-Cal managed care arrangement or contract. (f) When an application is forwarded by the county to the Healthy Families Program, the county shall send the application to the Healthy Families Program via an electronic application format defined by the department, provided that the department has implemented the automated interfaces necessary to accomplish electronic submission of applications from the county to the Healthy Families Program without requiring duplicative data entry by the county. The transmission of the electronic application to the Healthy Families Program shall occur within the timeframes designated by the department. (g) To the extent necessary, the department and the board may exchange a child’s case file solely for the purpose of determining the child’s eligibility for the Medi-Cal program or the Healthy Families Program, without requiring the family’s consent, to the extent allowed by federal law. Any information, including the child’s case file, shall be kept confidential by the department and the board pursuant to state and federal law, and it shall be used only for the determination or continuation of eligibility. (h) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department shall implement this section by means of all-county letters or similar instructions, without taking any further regulatory action. Thereafter, the department may adopt regulations, as necessary, to implement this section in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (i) This section shall be implemented when the state has sought and obtained approval of any amendments to its state plan necessary to implement the changes to this section, pursuant to this act, and has obtained funding under Title XXI of the Social Security Act (42 U.S.C. Sec. 1397aa et seq.) for the provision of benefits under this section. Until the changes to this section, made by this act, are implemented, the Medi-Cal to Healthy Families Bridge Program established pursuant to Section 12693.98 shall remain in effect. Notwithstanding any other provision of law, and only when all necessary federal approvals have been obtained by the state, this section shall be implemented only to the extent federal financial participation under Title XXI of the Social Security Act (42 U.S.C. Sec. 1397aa et seq.) is available to fund benefits provided under this section. (j) Upon implementation of the Healthy Families Presumptive Eligibility Program pursuant to this section, the Director of Health Care Services shall execute a declaration, which shall be retained by the director, stating that implementation of the section has commenced. (Amended by Stats. 2007, Ch. 483, Sec. 40. Effective January 1, 2008.)
  177. 12694.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. )

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    This section requires state and county actors to build and operate an automated WIC-to-Medi-Cal/Healthy Families enrollment gateway and to handle related privacy, data collection, and approval steps.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.1. Healthy Families Bridge Benefits Program [12693.98 - 12694] ( Chapter 16.1 added by Stats. 1998, Ch. 310, Sec. 28. ) ## 12694. (a) The board and the department, in collaboration with program offices for the California Special Supplemental Food Program for Women, Infants, and Children (WIC or the WIC program), local WIC agencies, counties in their capacity of making Medi-Cal eligibility determinations, advocates, information technology specialists, and other stakeholders, shall design, promulgate, and implement policies and procedures for an automated enrollment gateway system developed by the department and the board that performs, but is not limited to performing, the following functions: (1) To the extent that federal financial participation is available, allowing children applying to the WIC program to submit a simple electronic application to simultaneously obtain presumptive eligibility for Medi-Cal and Healthy Families under Title XIX (42) U.S.C. 1396 et seq.) and Title XXI (42 U.S.C. 1397aa et seq.) of the Social Security Act and apply for enrollment into the Medi-Cal program or the Healthy Families Program with the consent of their parent or guardian. (2) Modify the existing WIC enrollment system to obtain the minimum required data for enrollment in Medi-Cal and Healthy Families in order to provide an electronic transactional platform that is connected to the simple electronic application referenced in paragraph (1) and allowing for an interface between that application, the Medi-Cal Eligibility Data System (MEDS), and the Medi-Cal program or the Healthy Families Program, as relevant. (3) Providing an automated real-time connection with MEDS for the purpose of checking an applicant’s enrollment status. (4) Allowing for the electronic transfer of information to the Medi-Cal program or the Healthy Families Program, as relevant, for the purpose of making the final eligibility determination. (5) Checking, as relevant, available government databases for the purpose of electronically receiving information that is necessary to allow the Medi-Cal program or the Healthy Families Program to complete the eligibility determination. The department and the Managed Risk Medical Insurance Board shall comply with all applicable privacy and confidentiality provisions under federal and state law. (b) The automated enrollment gateway system shall be constructed with the capacity to be used by entities operating the WIC program. (c) The WIC application process shall be modified to provide an electronic application described in subdivision (a), which shall contain the information necessary to apply for the automated enrollment gateway system, supplemented by information required to apply for enrollment into the Medi-Cal program or the Healthy Families Program. (d) Benefits for applicants opting to simultaneously obtain presumptive eligibility for enrollment under this section shall continue until a final eligibility determination is made for the Medi-Cal program or the Healthy Families Program pursuant to Section 14011.8 of the Welfare and Institutions Code. (e) Operation of the automated enrollment gateway system for the WIC program shall occur within a timely and appropriate period as determined by the department and the board, in consultation with the stakeholders as provided in subdivision (a) subject to a specific appropriation being provided for that purpose in the Budget Act or in subsequent legislation. The automated enrollment gateway system shall comply with all applicable confidentiality and privacy protection in federal and state law and regulation. (f) The WIC program shall collect income and residency information necessary for the Medi-Cal program and the Healthy Families Program documentation requirements for applications submitted through the automated enrollment gateway system. To the extent allowed by the federal government, the Medi-Cal and Healthy Families programs shall rely on income information obtained by WIC and upon the income verification process performed by WIC. The Medi-Cal and Healthy Families programs shall collect and verify citizenship and immigration information as required under those programs. (g) Consistent with the provisions of this section, the Medi-Cal and Healthy Families programs may collect additional information needed to verify eligibility in those programs. (h) Counties shall accept and process for a Medi-Cal eligibility determination applications provided by the WIC gateway system and ensure timely processing of these applications and a timely eligibility determination and ending of presumptive eligibility. (i) The presumptive eligibility benefits provided under this section shall be identical to the benefits provided to children who receive full-scope Medi-Cal benefits without a share of cost, and shall only be made available through a Medi-Cal provider. (j) The confidentiality and privacy protections set forth in Sections 10850 and 14100.2 of the Welfare and Institutions Code and all other confidentiality and privacy protections in federal and state law and regulation shall apply to all children and families using the automated enrollment gateway system as described in this section. (k) The state shall promote and offer support to the WIC program for the use of the simple electronic application and the automated enrollment gateway system. (l) The board shall seek approval of any amendments to the state plan necessary to implement this section, in accordance with Title XXI (42 U.S.C. Sec. 1397aa et seq.) of the federal Social Security Act. (m) The department shall seek approval of any amendments to the state plan necessary to implement this section, in accordance with Title XIX (42 U.S.C. 1396 et seq.) of the federal Social Security Act. Notwithstanding any other provision of law, only when all necessary federal approvals have been obtained shall this section be implemented. (Added by Stats. 2006, Ch. 328, Sec. 5. Effective January 1, 2007.)
  178. 12694.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.2. Transition of Healthy Families Program Enrollees to Medi-Cal [12694.1 - 12694.2] ( Chapter 16.2 added by Stats. 2012, Ch. 28, Sec. 8. )

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    Healthy Families Program subscribers must transition to Medi-Cal when eligible, with an exemption for certain AIM-linked infants over 250% of the federal poverty level.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.2. Transition of Healthy Families Program Enrollees to Medi-Cal [12694.1 - 12694.2] ( Chapter 16.2 added by Stats. 2012, Ch. 28, Sec. 8. ) ## 12694.1. (a) Pursuant to Sections 14005.26 and 14005.27 of the Welfare and Institutions Code, subscribers enrolled in the Healthy Families Program pursuant to this part shall, no sooner than January 1, 2013, transition to the Medi-Cal program pursuant to Sections 14005.26 and 14005.27 of the Welfare and Institutions Code to the extent they are otherwise eligible. AIM-linked infants, as defined in Section 12695.03, with incomes above 250 percent of the federal poverty level are exempt from this transition. (b) The board shall coordinate with the State Department of Health Care Services to implement Sections 14005.26 and 14005.27 of the Welfare and Institutions Code. (c) The board’s actions to coordinate with the State Department of Health Care Services to implement Sections 14005.26 and 14005.27 of the Welfare and Institutions Code, as specified in subdivision (b), shall include, but not be limited to, all of the following: (1) Notwithstanding Section 12693.74, disenrollment of subscribers in the manner, and at the times, specified in Section 14005.27 of the Welfare and Institutions Code. The board may retain a subscriber in the program for longer than 12 months if needed to ensure a smooth transition to the Medi-Cal program. (2) In coordination with the State Department of Health Care Services, provision of reasonable notice to applicants concerning disenrollment of subscribers consistent with Section 14005.27 of the Welfare and Institutions Code. (3) Notwithstanding Section 12693.51, transfers of subscribers from one participating plan to another at the times and under the conditions prescribed by the board, without the obligation that the board provide an annual opportunity for subscribers to transfer from one participating plan to another. (d) Nothing in subdivision (e) of Section 12693.43 shall be construed to require any refund or adjustment of family contributions if an applicant has paid for three months of required family contributions in advance and the subscriber for whom the applicant has paid these family contributions is disenrolled pursuant to this section, or for any other reason, without receiving a fourth consecutive month of coverage. (e) (1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the board shall, without taking any further regulatory action, implement, interpret, or make specific this section by means of business rules, program bulletins, program correspondence to subscribers and contractors, letters, or similar instructions. (2) The board may adopt and readopt emergency regulations implementing this section. The adoption and readoption, by the board, of regulations implementing this section shall be deemed an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law. (f) The Healthy Families Program, pursuant to this part, shall cease to enroll new subscribers no sooner than the date transition begins pursuant to subdivision (a), and any transition of children shall be in compliance with the implementation plan or plans as contained in Section 14005.27 of the Welfare and Institutions Code. (Amended by Stats. 2013, Ch. 76, Sec. 141. (AB 383) Effective January 1, 2014.)
  179. 12694.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.2. Transition of Healthy Families Program Enrollees to Medi-Cal [12694.1 - 12694.2] ( Chapter 16.2 added by Stats. 2012, Ch. 28, Sec. 8. )

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    Certain civil service employees keep their jobs, status, and rights when the Managed Risk Medical Insurance Board’s functions are transferred to 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 6.2. HEALTHY FAMILIES [12693 - 12694.2] ( Part 6.2 added by Stats. 1997, Ch. 623, Sec. 2. ) ## CHAPTER 16.2. Transition of Healthy Families Program Enrollees to Medi-Cal [12694.1 - 12694.2] ( Chapter 16.2 added by Stats. 2012, Ch. 28, Sec. 8. ) ## 12694.2. All civil service employees who are currently employed by the Managed Risk Medical Insurance Board, whose functions are transferred to the State Department of Health Care Services as a result of the act adding this section, shall retain their positions, status, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) of Division 5 of Title 2 of the Government Code). (Added by Stats. 2012, Ch. 28, Sec. 8. (AB 1494) Effective June 27, 2012.)
  180. 127.

    ## 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 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. )

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    This section says the chapter’s general provisions control how the chapter is applied and override conflicting laws, unless the context requires otherwise.

    ## 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 1.5. Risk Retention [125 - 140] ( Chapter 1.5 added by Stats. 1990, Ch. 1521, Sec. 1. ) ## 127. Unless the context otherwise requires, the general provisions hereinafter set forth shall govern the application of this chapter and supersede any other provisions of law in conflict. (Added by Stats. 1990, Ch. 1521, Sec. 1.)
  181. 12739.77.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.8. Program Transfers [12739.77 - 12739.79] ( Part 6.8 added by Stats. 2013, Ch. 448, Sec. 2. )

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    This section defines “Board” and “Employee” for this part.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.8. Program Transfers [12739.77 - 12739.79] ( Part 6.8 added by Stats. 2013, Ch. 448, Sec. 2. ) ## 12739.77. For the purposes of this part, the following terms have the following meanings: (a) “Board” means the Managed Risk Medical Insurance Board. (b) “Employee” means permanent or probationary civil service employee. (Added by Stats. 2013, Ch. 448, Sec. 2. (SB 800) Effective January 1, 2014.)
  182. 12739.78.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.8. Program Transfers [12739.77 - 12739.79] ( Part 6.8 added by Stats. 2013, Ch. 448, Sec. 2. )

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    When the board is dissolved or terminated, covered employees must transfer to the specified successor agency and keep their status, position, and rights; the department must also report on the transfers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.8. Program Transfers [12739.77 - 12739.79] ( Part 6.8 added by Stats. 2013, Ch. 448, Sec. 2. ) ## 12739.78. (a) (1) If any statute dissolves or terminates the board, any employee of the board who, immediately prior to the effective date of the dissolution or termination of the board, was assigned to the Healthy Families Program (Part 6.2 (commencing with Section 12693)), the Access for Infants and Mothers Program (Part 6.3 (commencing with Section 12695)), the County Health Initiative Matching Fund (Part 6.4 (commencing with Section 12699.50)), or the Major Risk Medical Insurance Program (Part 6.5 (commencing with Section 12700)) shall be transferred to the State Department of Health Care Services and shall retain his or her status, position, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) and Part 2.6 (commencing with Section 19815) of Division 5 of Title 2 of the Government Code). (2) If employees are transferred to the State Department of Health Care Services pursuant to this subdivision, the department shall prepare a report on the transfer of employees, and, if applicable, any functions transferred to the department upon dissolution or termination of the board. The report shall, at a minimum, describe any assignment of new activities to transferred employees and provide workload justification for the position authority transferred pursuant to this subdivision. The department shall submit the report to the fiscal and relevant policy committees of the Legislature by February 1 of the year following the year in which employees are transferred, and shall update the report, if necessary, by February 1 of each of the two years following submission of the report. The report may be included with any budget information submitted by the department to those committees. (b) (1) If any statute dissolves or terminates the board, any employee of the board who, immediately prior to the effective date of the dissolution or termination of the board, was assigned to the Federal Temporary High Risk Pool (Part 6.6 (commencing with Section 12739.5) and Part 6.7 (commencing with Section 12739.70)) shall be transferred to the California Health Benefit Exchange and shall retain his or her status, position, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) and Part 2.6 (commencing with Section 19815) of Division 5 of Title 2 of the Government Code). (2) This subdivision shall not apply to any employee who has transferred to the California Health Benefit Exchange pursuant to subdivision (b) of Section 12739.61 or Section 12739.79. (c) If any statute dissolves or terminates the board, an employee’s applicable reinstatement rights that would have applied to the board shall instead apply to the State Department of Health Care Services. (Amended by Stats. 2014, Ch. 31, Sec. 41. (SB 857) Effective June 20, 2014.)
  183. 12739.79.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.8. Program Transfers [12739.77 - 12739.79] ( Part 6.8 added by Stats. 2013, Ch. 448, Sec. 2. )

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    Certain board employees in the Federal Temporary High Risk Pool must be transferred to the California Health Benefit Exchange when their function ceases under Section 12739.61.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 6.8. Program Transfers [12739.77 - 12739.79] ( Part 6.8 added by Stats. 2013, Ch. 448, Sec. 2. ) ## 12739.79. Any permanent or probationary civil service employee who is employed by the board and assigned to the Federal Temporary High Risk Pool (Part 6.6 (commencing with Section 12739.5) and Part 6.7 (commencing with Section 12739.70)) and whose function ceases due to Section 12739.61 shall immediately be transferred to the California Health Benefit Exchange and shall retain his or her status, position, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) and Part 2.6 (commencing with Section 19815) of Division 5 of Title 2 of the Government Code). (Added by Stats. 2014, Ch. 31, Sec. 42. (SB 857) Effective June 20, 2014.)
  184. 12740.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. )

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    This section defines key terms used in Part 7, including home protection contract, home protection company, protection contract fee, and home or residential property.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. ) ## 12740. The definitions used in this section govern the construction and terms used in this part but shall not affect any other provisions of this code: (a) “Home protection contract” means a contract or agreement whereby a person, other than a builder, seller, or lessor of the home which is the subject of the contract, undertakes for a specified period of time, for a predetermined fee, to repair or replace all or any part of any component, system or appliance of a home necessitated by wear and tear, deterioration or inherent defect, arising during the effective period of the contract, and, in the event of an inspection conducted pursuant to subdivision (b) of Section 12761, by the failure of that inspection to detect the likelihood of any such loss. Such contract shall provide for a system of service for effectuating such repair or replacement and shall not include protection against consequential damage from the failure of any component, system or appliance. (b) “Home protection company” means any person licensed pursuant to this part which issues home protection contracts. (c) “Protection contract fee” means the consideration received, or to be received, by a home protection company for the issuance of any home protection contract. A home protection contract fee shall be the fee established by a home protection company for coverage extending one year from the effective date of the contract. Where initial coverage is provided for a period in excess of one year, the home protection contract fee shall be the annual fee, plus a separately stated pro rata portion of the annual fee for the period of coverage which exceeds one year. (d) “Home” or “residential property” as used in this part means any single or multiple unit or units, including mobilehomes, (as defined in Health and Safety Code Section 18211) used primarily for residential purposes. (Amended (as amended by Stats. 1981, Ch. 820) by Stats. 1987, Ch. 664, Sec. 5.)
  185. 12741.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. )

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    This section says Part 7 does not apply to certain home builder or appliance-related guarantees and service contracts, some qualified home-appliance repair/service contracts, and pest control service agreements under a separate code section. The section becomes operative on January 1, 2004.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. ) ## 12741. This part shall not apply to: (a) Performance guarantees or service contracts given by either the builder of a home or the manufacturer or seller of an appliance or other system or component, whether or not an identifiable charge is made for such guarantee or service contract. (b) Any service contract, guarantee, or warranty intending to guarantee or warrant the repairs or service of a home appliance, system or component, provided such service contract, guarantee, or warranty is issued by a person who has sold, serviced, repaired or provided replacement of that appliance, system or component at the time of, or prior to issuance of the contract, guarantee, or warranty; and, provided, further, that the person issuing the service contract, guarantee, or warranty does not engage in the business of a home protection company. (c) The provider of any pest control service agreement pursuant to Section 8516 of the Business and Professions Code. (d) This section shall become operative January 1, 2004. (Repealed (in Sec. 2) and added by Stats. 1997, Ch. 523, Sec. 3. Effective January 1, 1998. Section operative January 1, 2004, by its own provisions.)
  186. 12742.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. )

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    Home protection contracts and home protection companies are regulated only by this part, except where Section 12743 says otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. ) ## 12742. Home protection contracts and home protection companies, and all matters incident to or concerned with such contracts and companies, shall be exclusively subject to and regulated by the provisions of this part and, except as provided in Section 12743, shall not be governed by any other provision of this code. (Added by Stats. 1978, Ch. 1203.)
  187. 12743.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. )

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    This section says which Insurance Code provisions apply to home protection contracts and home protection companies, and it defines key terms used in those applied provisions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. ) ## 12743. The following provisions of this code shall be applicable to home protection contracts and home protection companies: (a) Sections 1 to 46, inclusive. (b) Chapter 3 (commencing with Section 330) of Part 1, Division 1. (c) Chapter 12 (commencing with Section 679.70) of Part 1, Division 1. (d) These provisions of Chapter 1, Part 2, Division 1: (1) Article 1 (commencing with Section 680). (2) Article 1.5 (commencing with Section 685). (3) Article 2 (commencing with Section 690). (4) Section 699, 699.5, 700, 701, 704, 704.5, 704.7, 705, 705.1, 707, 708, 709, 710, 713, 714, 715, 716, 717, 718, 720, and 725 of Article 3 (commencing with Section 699). (5) Section 750. (6) Article 5.5 (commencing with Section 770). (7) Article 6.5 (commencing with Section 790). (8) Article 8 (commencing with Section 820). (9) Article 9 (commencing with Section 880). (10) Article 11 (commencing with Section 939). (11) Article 13 (commencing with Section 980). (12) Article 14 (commencing with Section 1010). (13) Article 14.5 (commencing with Section 1065.1). (14) Article 15 (commencing with Section 1070). (15) Article 16 (commencing with Section 1080). (16) Article 17 (commencing with Section 1100). (e) These provisions of Chapter 2, Part 2, Division 1: (1) Article 1 (commencing with Section 1140). (2) Article 2 (commencing with Section 1150). (3) Article 3 (commencing with Section 1170). (4) Article 4 (commencing with Section 1190). (5) Article 4.7 (commencing with Section 1215). (6) Article 7 (commencing with Section 1250). (7) Article 8 (commencing with Section 1260). (f) Article 4 (commencing with Section 1610) of Chapter 4 of Part 2 of Division 1. (g) Article 3 (commencing with Section 1631) of Chapter 5 of Part 2 of Division 1. (h) Sections 1850, 1850.5, 1852, 1853.5, 1853.7, 1853.8, 1857, 1857.2, 1857.3, 1857.4, 1857.5, 1858, 1858.05, 1858.1, 1858.15, 1858.2, 1858.3, 1858.4, 1858.5, 1858.6, 1858.7, 1859, 1859.1, 1860, 1860.1, 1860.2 of Chapter 9, Part 2, Division 1. (i) Division 3 (commencing with Section 12900). (j) In any references in the provisions made applicable to this part by subdivisions (a) to (i) inclusive of this section: (1) “Insurer” shall mean home protection company. (2) “Insured” shall mean a home protection contract holder. (3) “Premium” shall mean protection contract fee. (4) “Policy” or “insurance” shall mean home protection contract. (k) When any provision of this code, other than this part, is applied to home protection companies, such provision shall be construed in accordance with the nature of home protection companies and the home protection business. In the event of any conflict between such other provision and this part, this part shall prevail. (Amended by Stats. 1981, Ch. 820, Sec. 4.)
  188. 12744.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. )

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    This section limits who may issue or offer home protection contracts in the state, gives certain admitted insurers permission to do so, exempts some foreign applicants from listed filing requirements, and lets the commissioner set application forms by regulation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. ) ## 12744. (a) No person shall issue or offer to issue home protection contracts in this state unless the person holds a home protection company license issued by the department, except as provided in subdivision (b) of this section. (b) An insurer admitted for the class of insurance defined in Section 120 is authorized, in addition to the underwriting powers granted by the class, to issue home protection contracts, but the provisions of this part shall not be otherwise applicable to those insurers or their contracts. (c) No license shall be granted to a foreign applicant that has not fulfilled the requirements of Sections 716 and 717. For purposes of this part, the term “class of insurance” as used in said sections shall mean the business of a home protection company. This section shall not prohibit the admission of a foreign home protection company that has actively transacted home protection business in its state of domicile for three years or more. (d) The commissioner shall by regulation prescribe forms for applications for home protection company licenses consistent with the provisions of this part. Any reference to certificate of authority in Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1, shall mean home protection company license. (e) (1) Subject to paragraph (2) and, notwithstanding subdivision (c) or any regulation to the contrary, the following requirements shall not apply to any foreign applicant: (A) Filing a financial statement certified by the applicant’s home state regulatory official as a true and correct copy of the statement filed with that official. This exemption applies only if the official does not require a home protection company or the applicant to file a financial statement. (B) Filing an examination report certified by the applicant’s home state regulatory official as a true and correct copy. This exemption applies only if the official does not prepare examination reports of home protection companies or has not prepared an examination report of the applicant. (C) Holding a certificate of authority as an insurance company. (2) The exemptions described in paragraph (1) apply only if the applicant’s chief executive officer stipulates that the company will provide financial reports in the same manner required of domestic home protection companies. (Amended by Stats. 2014, Ch. 324, Sec. 1. (AB 1130) Effective January 1, 2015.)
  189. 12745.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. )

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    A qualifying insurance holding company may invest in or operate certain service corporations, but those corporations are generally not licensed or regulated under this part except as stated here.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 1. Definitions and Licensing [12740 - 12745] ( Chapter 1 added by Stats. 1978, Ch. 1203. ) ## 12745. (a) Any insurance holding company subject to Article 4.7 (commencing with Section 1215) of Chapter 2 of Part 2 of Division 1, one of whose affiliates is a home protection company as defined in this part, may invest in or operate a corporation which provides home service contractor or dispatch services or appliance service or appliance repair services pursuant to a contract issued for that purpose. The corporation shall not be subject to licensing or regulation under this part except as set forth in this section, provided, that the contract shall not be sold in conjunction with, or otherwise attach to, the sale or any proposed sale of the real property to which it relates. (b) At the time of filing its registration statement under Section 1215.4, and annually thereafter, each affiliate owning or operating such a corporation shall file as a supplement thereto, a statement of the financial condition of the corporation prepared according to generally accepted accounting principles, and a designated list of the name and addresses of all agents, employees, and independent contractors utilized to issue or sell those contracts. Each statement of financial condition and designated list shall be certified as correct by an officer of the corporation. The commissioner may prescribe the form for the statement or list. (Added by Stats. 1986, Ch. 944, Sec. 2.)
  190. 12750.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    A home protection company meeting the contract-count condition must keep minimum net worth and part of that net worth must be paid-in capital.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12750. (a) A home protection company which has issued or renewed an aggregate number of 1,000 or less contracts in the preceding calendar year shall maintain a minimum net worth of forty thousand dollars ($40,000) and for each additional 500 contracts, or fraction thereof, up to 10,000 contracts, an additional twenty thousand dollars ($20,000). (b) Net worth is defined as the excess of admitted assets over all liabilities and required reserves. At least twenty thousand dollars ($20,000) of net worth shall consist of paid-in capital. (Amended by Stats. 1981, Ch. 820, Sec. 5.)
  191. 12751.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    A qualifying home protection company must put part of the fee from certain pre-1979 exempt home protection contracts into the reserve required by Section 985.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12751. Any home protection company which has issued and in force, prior to January 1, 1979, any contracts for home protection exempt from the provisions of this part pursuant to Section 12741, shall carry a portion of the fee received for such contracts in the reserve contemplated by Section 985, as though such fees were premiums subject to the provisions of that section, and such sums shall be deemed equivalent to premiums for purposes of that section but shall not be considered premiums for the purposes of Section 12202 of the Revenue and Taxation Code. (Added by Stats. 1978, Ch. 1203.)
  192. 12752.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    A home protection company must file an annual statement, and the commissioner may examine the company and set certain examination timing limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12752. (a) A home protection company shall file an annual statement exhibiting its conditions and affairs in accordance with Sections 900, 900.5, 900.8, 900.9, 902, 903, 903.5, 904, 922.1 to 922.8, inclusive, 923, 923.5, and 924. However, the required contents of the annual statement may vary from the requirements thereof, pursuant to regulations adopted by the commissioner in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, so as to adapt the requirements to the home protection business. This subdivision shall not be construed to limit the authority of the commissioner to request financial statements from licensees at any time. (b) The commissioner shall, before licensure and at other times as appears necessary, examine the business and affairs of a home protection company subject to this part. A home protection company so examined shall open its books and records for inspection by the commissioner and shall otherwise facilitate and cooperate in the examination. In making the examination, the commissioner shall have the rights specified in Section 733, and the examinee shall be subject to the obligations of Section 736. The commissioner shall not conduct more than one financial examination of a company in a five-year period, unless the commissioner finds that the financial condition of the company has deteriorated, thereby warranting an interim examination. (c) The commissioner may extend the period between examinations up to two additional years if the commissioner determines that conditions warrant the extension. In making that determination, the commissioner may consider all of the following factors: (1) The company’s reserves. (2) The company’s net worth. (3) Any other factors the commissioner considers relevant. (Amended by Stats. 2018, Ch. 431, Sec. 1. (AB 2142) Effective January 1, 2019.)
  193. 12753.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    Home protection companies must keep a reserve for unearned premiums of at least 40% of current contract premiums.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12753. (a) A home protection company shall maintain a reserve for unearned premiums in an amount not less than 40 percent of the aggregate premiums charged on its contracts currently in force. Amounts to be reserved shall be on a 12-month basis. Where the contract is for a period of more than 12 months, the reserve for unearned premiums for the period beyond 12 months shall be 100 percent of the pro rata portion of the contract fee attributable to the period of coverage in excess of 12 months. The unearned premium reserve for contracts exceeding 12 months shall be reduced to not less than 40 percent of the pro rata portion of the contract fee applicable to the next succeeding 12-month period, as of the first day of the succeeding 12-month period, and each succeeding 12-month period thereafter during which the contract is in effect. Where the home protection contract provides coverage during the selling or listing period of the real property to which the contract applies, the home protection contract fee applicable to this period of coverage shall be deemed fully earned upon the close of escrow, and receipt of payment of the applicable contract fee. (b) For purposes of this section, such reserve shall not include protection contract fees on home protection contracts to the extent provision is made for reinsurance of the outstanding risk on such contracts. (c) The commissioner may, by regulation, prescribe the format by which the reserve shall be reported. (Amended by Stats. 1987, Ch. 664, Sec. 6.)
  194. 12755.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    A home protection company is treated as insolvent when its net worth falls below 50% of the amount required by Section 12750.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12755. A home protection company shall be deemed insolvent whenever its net worth is reduced below 50 percent of the amount required by Section 12750. (Added by Stats. 1981, Ch. 820, Sec. 8.)
  195. 12756.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    A home protection company may invest only in the specified classes of assets, except for a commissioner-set amount that may be invested in certain tangible personal property used to repair or replace home components, systems, or appliances.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12756. A home protection company shall invest only in those assets defined in Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, except that an amount to be determined by the commissioner by regulation of its admitted assets may be invested in tangible personal property held by it for the purpose of repair or replacement of home components, systems or appliances under its home protection contracts. (Added by Stats. 1981, Ch. 820, Sec. 9.)
  196. 12757.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. )

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    Article 14.2 is not applicable to home protection companies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 2. Fiscal Requirements [12750 - 12757] ( Chapter 2 added by Stats. 1978, Ch. 1203. ) ## 12757. The provisions of Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1, shall not be applicable to home protection companies. (Added by Stats. 1981, Ch. 820, Sec. 10.)
  197. 12760.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. )

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    A home protection company may not pay commissions to induce the issuance or purchase of a home protection contract, and it may not require that contract as a condition for another insurance policy in a real property transaction.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. ) ## 12760. No home protection company shall pay a commission to any person as an inducement or compensation for the issuance, purchase or acquisition of a home protection contract, nor shall a home protection company or any other insurer either directly or indirectly, as a part of any real property transaction in which a home protection contract will be issued, purchased or acquired, require that a home protection contract be issued, purchased or acquired in conjunction with or as a condition precedent to the issuance, purchase or acquisition, by any person, of any other policy of insurance. The provisions of this section shall not prohibit payment of an override commission or marketing fee to an employee or commission sales agent who is the marketing representative of the home protection company or its parent, subsidiary, or affiliate on the sale or marketing of a home protection contract, provided such person is not a real estate licensee sharing in or entitled to share in, or affiliated with a real estate brokerage firm which is entitled to share in the real estate commission generated by the underlying real property transaction. (Repealed and added by Stats. 1981, Ch. 689, Sec. 4.)
  198. 12761.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. )

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    A home protection contract may not be provided free of charge, and certain contracts issued before a home sale must include consideration. A home protection company may require an onsite inspection before issuing a contract.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. ) ## 12761. (a) The furnishing of a home protection contract without charge to any person shall constitute a violation of this part. No home protection contract providing coverage prior to the time an interest in the home to which it attaches is sold shall be issued or delivered unless it provides for consideration. Such consideration may consist of a bona fide promise to pay the protection contract fee at the time of and only upon transfer of title. (b) A home protection company may require an onsite inspection as a prequalification for the issuance of a home protection contract, and in such event offer a report on the inspection in connection with a bona fide application for the issuance of such contract even though the issuance of a contract on the property which is the subject of the inspection does not occur. (Amended by Stats. 1986, Ch. 944, Sec. 4.)
  199. 12761.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. )

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    Certain qualifying home protection companies may provide coverage for a listing period, and those contracts are exempt from two listed provisions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. ) ## 12761.1. (a) A home protection company which was licensed as such on December 31, 1988, and as of that date was a franchisor of entities authorized by Section 771.1 to solicit, negotiate, or effect home protection contracts, or a parent, subsidiary, or affiliate of such a franchisor, and continues to be such a franchisor or parent, subsidiary, or affiliate of such a franchisor, may provide coverage for a listing period. (b) For the purposes of this section, a “listing period” means a period prior to the time an interest in the home to which the home protection coverage attaches is sold, during which there is in effect an exclusive right to sell listing as that term is defined in Section 1086 of the Civil Code, between the seller of that home and a franchisee of that franchisor. (c) Home protection contracts providing listing period coverage issued pursuant to this section shall be exempt from the provisions of both of the following: (1) Subdivision (c) of Section 12740, which requires a separately stated pro rata portion of the annual fee for the period of coverage which exceeds one year. (2) Subdivision (a) of Section 12753, which requires reserves for unearned premiums applicable to the listing period coverage provided under those home protection contracts. (Added by Stats. 1990, Ch. 1021, Sec. 1.)
  200. 12762.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. )

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    Home protection contracts must clearly state covered items, exclusions, contract terms, service fees, service limits, and how requests for service work; the commissioner may also adopt related regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 7. HOME PROTECTION [12740 - 12764] ( Part 7 added by Stats. 1978, Ch. 1203. ) ## CHAPTER 3. Other Provisions [12760 - 12764] ( Chapter 3 added by Stats. 1978, Ch. 1203. ) ## 12762. (a) A home protection contract shall specify, in clear and conspicuous terms, the following information: (1) Each of the appliances, systems and components covered by the contract. (2) All exclusions and limitations respecting the extent of coverage. (3) The period during which the contract will remain in effect, the protection contract fee and the renewal terms, if any. (4) With respect to the performance of services by the home protection company, all of the following: (A) The services to be performed by the company and the terms and conditions of such performance. (B) The service fee or fees, if any, to be charged for such services. (C) All limitations respecting the performance of services, including any restrictions as to the time period when or geographical area within which services may be requested or will be performed. (D) A statement that services will be performed upon telephonic request therefor to the company, without any requirement that claim forms or applications be filed prior to the rendition of service. (E) A representation that services will be initiated by or under the direction of the company within 48 hours after request is made for such services by any person entitled to make such request under the contract, or the agent of such person. (b) The commissioner may adopt, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, such reasonable regulations as may be necessary to make more specific the provisions of this section. Those regulations may also establish such other contract form standards and requirements as the commissioner may deem necessary and appropriate in the public interest. However, this section does not authorize the commissioner to specify those appliances, systems, or components which must be covered by a home protection contract except to the extent necessary to guarantee the equity of the exclusions from coverage offered or provided under a contract, or to the extent necessary to avoid illusory coverage due to the nature or extent of exclusions from the contract. (Amended by Stats. 1983, Ch. 142, Sec. 96.)

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