Insurance Code — Part 3 | INS — United States — California law | Esheria

Insurance Code

Part 3 of 23 · provisions 401–600

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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

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  1. 10133.67.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may agree to pay a health care provider for a claim for covered health care benefits provided to an insured.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10133.67. Pursuant to Section 12921, the commissioner may also agree to payment to a health care provider who submitted a claim for health care benefits provided to an insured that are covered under the insured’s health insurance policy. (Added by Stats. 2005, Ch. 723, Sec. 7. Effective January 1, 2006.)
  2. 10133.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Disability insurers must pay certain hospitalization or medical aid benefits to the person who paid for or provided the aid, if required reimbursement information is submitted.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10133.7. (a) On and after January 1, 1994, any disability insurer shall pay group insurance benefits contingent upon, or for expenses incurred on account of, hospitalization or medical or surgical aid to the person or persons having provided or having paid for the hospitalization or medical or surgical aid where that person has qualified for reimbursement by submitting the items and information specified in subdivisions (b) and (c). The amount of any such payment shall not exceed the amount of benefit provided by the policy with respect to the service or billing of the provider of aid, and the amount of payments shall not exceed the amount of expenses incurred on account of the hospitalization or medical or surgical aid. Payment so made shall discharge the insurer’s obligation with respect to the amount so paid. (b) The items which shall be submitted to the insurer for reimbursement pursuant to subdivision (a) are as follows: (1) Proof of payment of medical services and a provider’s itemized bill for service. (2) In the case where the insured does not reside with the person or persons seeking hospitalization or medical or surgical aid, either a copy of the judicial order requiring the insured to provide dependent coverage or a state approved form verifying the existence of a judicial order to be filed with the insurer on an annual basis. (3) In the case where the insured does not reside with the person or persons seeking hospitalization or medical or surgical aid, and the provider is seeking direct reimbursement, an itemized bill with the signature of the custodial parent or guardian certifying that services being billed for have been provided and, on an annual basis, either a copy of the judicial order requiring the insured to provide dependent coverage or a state approved form verifying the existence of a judicial order. (c) When seeking payment from an insurer, a person shall provide an insurer the items specified in subdivision (b) with the name and address of the person to be reimbursed, the name and policy number of the insured, the name of the individual for whom hospitalization or medical or surgical aid has been provided, and other necessary information directly related to coverage under the policy. (d) In the case of a Medi-Cal beneficiary, where the State Department of Health Services has paid for the hospitalization or medical or surgical aid, any disability insurer shall pay group insurance benefits to the State Department of Health Services for expenses contingent upon, or incurred on account of hospitalization or medical or surgical aid. Payment so made shall discharge the insurer’s obligation with respect to the amount so paid. The amount of any such payment shall not exceed the amount of benefit provided by the policy with respect to the service or billing of the provider of aid, and the amount of payments shall not exceed the amount of expenses incurred on account of hospitalization or medical or surgical aid. (Added by Stats. 1993, Ch. 744, Sec. 2.5. Effective January 1, 1994.)
  3. 10133.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must issue health-insurance language-access regulations, and health insurers must provide translation and interpretation-related notices, translations, and access rules for limited-English-proficient insureds.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10133.8. (a) The commissioner shall, on or before January 1, 2006, promulgate regulations applicable to all individual and group policies of health insurance establishing standards and requirements to provide insureds with appropriate access to translated materials and language assistance in obtaining covered benefits. A health insurer that participates in the Healthy Families Program may assess the Healthy Families Program enrollee population separately from the remainder of its population for purposes of subparagraph (A) of paragraph (3) of subdivision (b). An insurer that chooses to separate its Healthy Families Program enrollment from the remainder of its population shall treat the Healthy Families Program population separately for purposes of determining whether subparagraph (A) of paragraph (3) of subdivision (b) is applicable and shall also treat the Healthy Families Program population separately for purposes of applying the percentage and numerical thresholds in subparagraph (A) of paragraph (3) of subdivision (b). (b) The regulations described in subdivision (a) shall include the following: (1) A requirement to conduct an assessment of the needs of the insured group, pursuant to this subdivision. (2) Requirements for surveying the language preferences and assessment of linguistic needs of insureds within one year of the effective date of the regulations that permit health insurers to utilize various survey methods, including, but not limited to, the use of existing enrollment and renewal processes, newsletters, or other mailings. Health insurers shall update the linguistic needs assessment, demographic profile, and language translation requirements every three years. However, the regulations may provide that the surveys and assessments by insurers of supplemental insurance products may be conducted less frequently than three years if the commissioner determines that the results are unlikely to affect the translation requirements. (3) Requirements for the translation of vital documents that include the following: (A) A requirement that all vital documents, as defined pursuant to subparagraph (B), be translated into an indicated language, as follows: (i) A health insurer with an insured population of 1,000,000 or more shall translate vital documents into the top two languages other than English as determined by the needs assessment pursuant to paragraph (2) and any additional languages when 0.75 percent or 15,000 of the insured population, whichever number is less, indicates in the needs assessment pursuant to paragraph (2) a preference for written materials in that language. (ii) A health insurer with an insured population of 300,000 or more but less than 1,000,000 shall translate vital documents into the top one language other than English as determined by the needs assessment pursuant to paragraph (2) and any additional languages when 1 percent or 6,000 of the insured population, whichever number is less, indicates in the needs assessment pursuant to paragraph (2) a preference for written materials in that language. (iii) A health insurer with an insured population of less than 300,000 shall translate vital documents into a language other than English when 3,000 or more or 5 percent of the insured population, whichever number is less, indicates in the needs assessment pursuant to paragraph (2) a preference for written materials in that language. (B) Specification of vital documents produced by the insurer that are required to be translated. The specification of vital documents shall not exceed that of the United States Department of Health and Human Services (HHS) Office for Civil Rights (OCR) Policy Guidance (65 Federal Register 52762 (August 30, 2000)), but shall include all of the following: (i) Applications. (ii) Consent forms. (iii) Letters containing important information regarding eligibility or participation criteria. (iv) Notices pertaining to the denial, reduction, modification, or termination of services and benefits, the right to file a complaint or appeal. (v) Notices advising limited-English-proficient persons of the availability of free language assistance and other outreach materials that are provided to insureds. (vi) Translated documents shall not include an insurer’s explanation of benefits or similar claim processing information that are sent to insureds unless the document requires a response by the insured. (C) For those documents described in subparagraph (B) that are not standardized but contain insured specific information, health insurers shall not be required to translate the documents into the threshold languages identified by the needs assessment pursuant to paragraph (2) but rather shall include with the document a written notice of the availability of interpretation services in the threshold languages identified by the needs assessment pursuant to paragraph (2). A health insurer subject to the requirements in Section 10133.11 shall also include with the documents a written notice of the availability of interpretation services in the top 15 languages spoken by limited-English-proficient (LEP) individuals in California as determined by the State Department of Health Care Services. (i) Upon request, the insured shall receive a written translation of those documents. The health insurer shall have up to, but not to exceed, 21 days to comply with the insured’s request for a written translation. If an enrollee requests a translated document, all timeframes and deadlines requirements related to the documents that apply to the health insurer and insureds under the provisions of this chapter and under any regulations adopted pursuant to this chapter shall begin to run upon the health insurer’s issuance of the translated document. (ii) For appeals that require expedited review and response in accordance with the statutes and regulations of this chapter, the health insurer may satisfy this requirement by providing notice of the availability and access to oral interpretation services. (D) A requirement that health insurers advise limited-English-proficient insureds of the availability of interpreter services. (4) Standards to ensure the quality and accuracy of the written translation and that a translated document meets the same standards required for the English version of the document. The English language documents shall determine the rights and obligations of the parties, and the translated documents shall be admissible in evidence only if there is a dispute regarding a substantial difference in the material terms and conditions of the English language document and the translated document. (5) Requirements for individual access to interpretation services that include the following: (A) A requirement that an interpreter meets, at a minimum, all of the following qualifications: (i) Demonstrated proficiency in both English and the target language. (ii) Knowledge in both English and the target language of health care terminology and concepts relevant to health care delivery systems. (iii) Adheres to generally accepted interpreter ethics principles, including client confidentiality. (B) A requirement that the insured with limited English proficiency shall not be required to provide their own interpreter or rely on a staff member who does not meet the qualifications described in subparagraph (A) to communicate directly with the limited-English-proficient insured. (C) A requirement that the insured with limited English proficiency shall not be required to rely on an adult or minor child accompanying the insured to interpret or facilitate communication except under either of the following circumstances: (i) In an emergency, as described in Section 1317.1 of the Health and Safety Code, if a qualified interpreter is not immediately available for the insured with limited English proficiency. (ii) If the individual with limited English proficiency specifically requests that the accompanying adult interpret or facilitate communication, the accompanying adult agrees to provide that assistance, and reliance on that accompanying adult for that assistance is appropriate under the circumstances. (6) Standards to ensure the quality and timeliness of oral interpretation services provided by health insurers. (c) In developing the regulations, standards, and requirements described in this section, the commissioner shall consider the following: (1) Publications and standards issued by federal agencies, including the Culturally and Linguistically Appropriate Services (CLAS) in Health Care issued by the United States Department of Health and Human Services Office of Minority Health in December 2000, and the United States Department of Health and Human Services (HHS) Office for Civil Rights (OCR) Policy Guidance 65 (65 Federal Register 52762 (August 30, 2000)). (2) Other cultural and linguistic requirements under state programs, including the Medi-Cal Managed Care Policy Letters, cultural and linguistic requirements imposed by the State Department of Health Care Services on health care service plans that contract to provide Medi-Cal managed care services, and cultural and linguistic requirements imposed by the Managed Risk Medical Insurance Board on health insurers that contract to provide services in the Healthy Families Program. (3) Standards adopted by other states pertaining to language assistance requirements for health insurers. (4) Standards established by California or nationally recognized accrediting, certifying, or licensing organizations and medical and health care interpreter professional associations regarding interpretation services. (5) Publications, guidelines, reports, and recommendations issued by state agencies or advisory committees, such as the report to the Legislature from the Task Force on Culturally and Linguistically Competent Physicians and Dentists required pursuant to former Section 852 of the Business and Professions Code. (6) Examples of best practices relating to language assistance services by health care providers and health insurers that contract for alternative rates of payment with providers, including existing practices. (7) Information gathered from complaints to the commissioner and consumer assistance help lines regarding language assistance services. (8) The cost of compliance and the availability of translation and interpretation services and professionals. (9) Flexibility to accommodate variations in networks and method of service delivery. The commissioner shall allow for health insurer flexibility in determining compliance with the standards for oral and written interpretation services. (d) In designing the regulations, the commissioner shall consider all other relevant guidelines in an effort to accomplish maximum accessibility within a cost-efficient system of indemnification. The commissioner shall seek public input from a wide range of interested parties. (e) Services, verbal communications, and written materials provided by or developed by the health insurers that contract for alternative rates of payment with providers, shall comply with the standards developed under this section. (f) Beginning on January 1, 2008, the department shall report biennially to the Legislature regarding health insurer compliance with the standards established by this section, including results of compliance audits made in conjunction with other audits and reviews. The department shall also utilize the reported information to make recommendations for changes that further enhance standards pursuant to this section. The commissioner shall work to ensure that the biennial reports required by this section, and the data collected for the reports, do not require duplicative or conflicting data collection with other reports that may be required by government-sponsored programs. The commissioner may also delay or otherwise phase in implementation of the standards and requirements in recognition of costs and availability of translation and interpretation services and professionals. (g) This section does not prohibit government purchasers from including in their contracts additional translation or interpretation requirements, to meet the linguistic and cultural needs, beyond those set forth pursuant to this section. (Amended by Stats. 2026, Ch. 27, Sec. 58. (SB 164) Effective June 29, 2026.)
  4. 10133.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Health insurers must report certain cultural-appropriateness policies and procedures to the Department of Insurance within one year after the specified assessment, using the department’s required format.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Transfer [10129 - 10133.14] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10133.9. Within a year after the health insurer’s assessment pursuant to paragraph (2) of subdivision (b) of Section 10133.8, health insurers shall report to the Department of Insurance on internal policies and procedures related to cultural appropriateness, in a format specified by the department, in the following ways: (a) Collection of data regarding the insured population based on the needs assessment as required by paragraph (2) of subdivision (b) of Section 10133.8. (b) Education of health insurer staff who have routine contact with insureds regarding the diverse needs of the insured population. (c) Recruitment and retention efforts that encourage workforce diversity. (d) Evaluation of the health insurer’s programs and services with respect to the insurer’s enrollee populations, using processes such as an analysis of complaints and satisfaction survey results. (e) The periodic provision of information regarding the ethnic diversity of the insurer’s insured population and any related strategies to insurers providers. Insurers may use existing means of communication. (f) The periodic provision of educational information to insureds on the insurer’s services and programs. Insurers may use existing means of communication. (Added by Stats. 2003, Ch. 713, Sec. 5. Effective January 1, 2004.)
  5. 10134.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

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    This section defines key terms used for transfers of structured settlement payment rights.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10134. For the purposes of this article, the following terms have the following meanings: (a) “Buyer’s first right of refusal” means any provision in the transfer agreement or related documents that obligate the payee to give to the buyer the first choice or option to purchase any remaining structured settlement rights belonging to the payee. (b) “Dependents” include the payee’s spouse and minor children and all other family members and other persons for whom the payee is legally obligated to provide support, including alimony. (c) “Discounted present value” means the fair present value of future payments, as determined by discounting those payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service. (d) “Effective equivalent interest rate,” with respect to a transfer of structured settlement payment rights, means the annualized rate of interest on the net advance amount, calculated by treating the transferred structured settlement payments as if they were installment payments on a loan, with each payment applied first to accrued unpaid interest and then to principal. (e) “Expenses” means all broker’s commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, and charges that a payee would have to pay to transfer the structured settlement payment rights of a structured settlement agreement or that would be deducted from the gross consideration that would be paid to the payee in connection with the transfer of the structured settlement payment rights of a structured settlement agreement. (f) “Independent professional advice” means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser meeting all of the following requirements: (1) The adviser is engaged by a claimant or payee to render advice concerning the legal, tax, or financial implications of a structured settlement or a transfer of structured settlement payment rights. (2) The adviser’s compensation for rendering independent professional advice is not affected by occurrence or lack of occurrence of a settlement or transfer. (3) A particular adviser is not referred to the payee by the transferee or its agent, except that the transferee may refer the payee to a lawyer referral service or agency operated by a state or local bar association. (g) “Interested parties” means, with respect to a structured settlement agreement, the payee, the payee’s attorney, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party who has continuing rights or obligations under the structured settlement agreement. If the designated beneficiary is a minor, the beneficiary’s parent or guardian shall be an interested party. (h) “Payee” means an individual who received tax-free payments pursuant to a structured settlement agreement. (i) “Qualified assignment agreement” means an agreement providing for a qualified assignment within the meaning of Section 130 of Title 26 of the United States Code, as amended from time to time. (j) “Structured settlement agreement” means an arrangement for periodic payment of damages established by settlement or judgment in resolution of a tort claim in which the payment of the judgment or award is paid in whole, or in part, in periodic tax-free payments rather than a lump-sum payment. A structured settlement agreement entered into pursuant to Section 667.7 of the Code of Civil Procedure or Section 970.6 or 984 of the Government Code is not subject to the provisions of this article other than the requirements of Section 10138. (k) “Structured settlement obligor” means the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement. (l) “Structured settlement payment rights” means rights to receive periodic payments, including lump-sum payments, pursuant to a structured settlement agreement, whether from the settlement obligor or an annuity issuer. (m)“Terms of the structured settlement” include, with respect to a structured settlement agreement, the terms of the structured settlement agreement, annuity contract, qualified assignment agreement, and any order or approval of a court or responsible administrative authority or other governmental authority authorizing or approving the structured settlement. (n) “Transfer” means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made for consideration. (o) “Transfer agreement” means the agreement providing for the transfer, and any other document used to effectuate the transfer, from the payee to the transferee of structured settlement payment rights of a structured settlement agreement. (p) “Transferee” means any person receiving structured settlement payment rights resulting from a transfer. (Amended by Stats. 2009, Ch. 593, Sec. 1. (SB 510) Effective January 1, 2010.)
  6. 10135.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

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    This section limits when the article applies to structured settlement payment right transfers and adds a separate later start date for amendments made in the 2001–02 Regular Session.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10135. (a) This article is only applicable to transfers entered into on or after January 1, 2000. (b) Notwithstanding subdivision (a), the changes to this article made by the act amending this section in the 2001–02 Regular Session shall only be applicable to transfers entered into on or after January 1, 2002. (c) This article is only applicable to transfers of structured settlement payment rights if one of the following requirements is met: (1) The payee is domiciled in California at the time the transfer agreement is signed by the payee. (2) The payee is not domiciled in California at the time the transfer agreement is signed and the state where the payee is domiciled does not have a structured settlement transfer statute, but either the structured settlement obligor or annuity issuer is domiciled in California. (Amended by Stats. 2009, Ch. 593, Sec. 2. (SB 510) Effective January 1, 2010.)
  7. 10136.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

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    A structured settlement payment-rights transfer is ineffective unless this section’s requirements are met, including advance written disclosure, court approval, and required contract terms.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10136. (a) No direct or indirect transfer of structured settlement payment rights by a payee to which this article applies shall be effective, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to a transferee, unless all of the provisions of this section are satisfied. (b) Ten or more days before the payee executes a transfer agreement, the transferee shall provide the payee with a separate written disclosure statement, accurately completed with the information that applies to the transfer agreement, in substantially the following form, in at least 12-point type unless otherwise indicated (bracketed instructions shall not appear in the form): “Disclosure Notice Required By Law [14-point boldface type] You are selling (technically called ‘transferring’) your right to receive your payments under a structured settlement. You should get this disclosure notice at least 10 days before you sign any contract. IMPORTANT TERMS: [14-point boldface type ] You have agreed to sell to the transferee future payments totaling ____ dollars ($____) in exchange for a purchase price of ____ dollars ($____). Those future payments have a discounted present value equal to ____ dollars ($____), calculated by applying the discount rate of ____ percent utilized by the Internal Revenue Service to value annuities in probate proceedings. The purchase price to be paid to you was calculated using a discount rate of ____ percent. The purchase price payable to you is less than the present value of the future payments stated above because the discount rate of your transaction is greater than the rate utilized by the Internal Revenue Service. For comparison purposes: If you did not sell your right to receive structured settlement payments, but instead borrowed the net amount of $____ and paid that loan back in installments with each of the payments you are now selling, the equivalent interest rate you would be paying for that loan would be ____% per year. [The text and information set forth above under ‘IMPORTANT TERMS’ shall be in 14-point type and circumscribed by a box with a bold border] To figure the net amount we are paying, we have charged you for the following expenses: [itemize in a list by type and amount] for a total of $____ in expenses. You should get independent professional advice about whether selling your structured settlement payments is a good idea for you and for your dependents. You are advised to seek independent legal or financial advice regarding the transaction and, under the law, the cost of that advice, up to one thousand five hundred dollars ($1,500), will be paid by the transferee, the person or entity to whom you have agreed to transfer and assign the payments in question. The transferee or purchaser’s accountant, counsel, or actuary may not advise you in this transaction. You also should get independent professional advice from an accountant or lawyer experienced in tax matters about any income tax consequences from selling your structured settlement payments. We cannot give you the name of anyone to advise you. Court approval is needed [14-point boldface type]. A court must approve any agreement you sign to sell your rights under a structured settlement. You will not receive any money until the court approves the sale. Court approval could take more than 30 days following the day you sign an agreement selling your rights under a structured settlement. A sale of future structured settlement payments will mean that you will no longer receive the future payments that are sold. You are advised to enter into this transaction only after you have carefully considered the consequences of the transaction. You may cancel the contract before court approval [14-point boldface type]. You may cancel the agreement selling (or transferring) your rights under a structured settlement without any cost or obligation. You may cancel at any time before the court approves the contract. You will get notice of the date of the court hearing. If you want to cancel, you do not need any special form. But, you must cancel in writing. Send your cancellation to: [insert transferee’s name and address]. If you believe that you have been treated unfairly or have been misled, you should contact your local district attorney or the state Attorney General.” (c) The transfer agreement shall be written in at least 12-point type and shall be complete and without blank spaces to be completed after the payee’s signature. The transfer agreement shall set forth clear and conspicuously, and in no less than 12-point type, all of the following: (1) A statement that the agreement is not effective until the date on which a court enters a final order approving the transfer agreement and that payment to the payee pursuant to the transfer agreement will be delayed up to 30 days or more after the date the payee signed the transfer agreement in order for the court to review and approve the transfer agreement. (2) The amounts and due dates of the structured settlement payments to be transferred. (3) The aggregate amount of the structured settlement payments to be transferred. This amount shall be disclosed in the form prescribed in subdivision (b). (4) The aggregate amount of all expenses, if any, to be deducted from the purchase price to be paid to the payee in exchange for the payments to be transferred, and an itemization of all expenses by type and amount. (5) The amount payable to the payee, net of all expenses, in exchange for the payments to be transferred. This amount shall be disclosed in the form prescribed in subdivision (b). (6) The discounted present value of all structured settlement payments to be transferred and a statement that “This is the value of your structured settlement in current dollars.” This amount shall be disclosed in the form prescribed in subdivision (b). (7) The federal rate, as described in subdivision (c) of Section 10134, used in determining the discounted present value. (8) The effective equivalent interest rate, which shall be disclosed in the following statement: “YOU WILL BE PAYING THE EQUIVALENT OF AN INTEREST RATE OF ____% PER YEAR. Based on the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are transferring to us, if the transferred structured settlement payments were installment payments on a loan, with each payment applied first to accrued unpaid interest and then to principal, it would be as if you were paying interest to us of ____% per year, assuming funding on the effective date of transfer.” This percentage amount shall be disclosed in the form prescribed in subdivision (b) in the space for “the equivalent interest rate you would be paying for this loan would be ____% per year.” (9) The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted present value of the payments. (10) A statement that the payee should obtain independent professional advice regarding any federal and state income tax consequences arising from the proposed transfer, and that the transferee may not refer the payee to any specific adviser for that purpose. (11) A statement that the court approving the transfer agreement retains continuing jurisdiction to interpret and monitor implementation of the agreement as justice may require. (12) The following statement: “If you believe you were treated unfairly or were misled as to the nature of the obligations you assumed upon entering into this agreement, you should report those circumstances to your local district attorney or the office of the Attorney General.” (13) The following statement printed in 14-point type, circumscribed by a box with a bold border, and set forth immediately above or adjacent to the space reserved for the payee’s signature: “You have the right to cancel this agreement without any cost or obligation until the date the court approves this agreement. You will receive notice of the court hearing date when approval may occur. You must cancel in writing and send your cancellation to [insert transferee’s name and address].” (d) The contract for transferring the structured settlement payment rights may not violate Section 10138. (e) At any time before the date on which a court enters a final order approving the transfer agreement pursuant to Section 10139.5, the payee may cancel the transfer agreement, without cost or further obligation, by providing written notice of cancellation to the transferee. (Amended by Stats. 2010, Ch. 328, Sec. 144. (SB 1330) Effective January 1, 2011.)
  8. 10137.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    A transfer of structured settlement payment rights is void unless a court reviews and approves it and finds the listed conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10137. A transfer of structured settlement payment rights is void unless a court reviews and approves the transfer and finds the following conditions are met: (a) The transfer of the structured settlement payment rights is fair and reasonable and in the best interest of the payee, taking into account the welfare and support of his or her dependents. (b) The transfer complies with the requirements of this article, will not contravene other applicable law, and the court has reviewed and approved the transfer as provided in Section 10139.5. (Amended by Stats. 2009, Ch. 593, Sec. 4. (SB 510) Effective January 1, 2010.)
  9. 10138.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    A transfer agreement for structured settlement payment rights may not include listed prohibited terms, and any such term is void and unenforceable for a California resident seller.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10138. (a) A transfer agreement, as defined in subdivision (o) of Section 10134, shall not include any provision described in the paragraphs below. Any inclusion of a prohibited provision, with respect to a seller who is a California resident, shall make the provision void and unenforceable. (1) Any provision that waives the seller’s right to sue under any law, or in which the seller agrees not to sue, or that waives jurisdiction or standing to sue under the contract. (2) Any provision that requires the seller to indemnify and hold harmless the buyer, or to pay the buyer’s costs of defense, in any claim or action brought by the seller or on the seller’s behalf contesting the sale for any reason. (3) Any provision that waives benefits or rights conferred by law with respect to garnishment of wages. (4) Any provision providing that the contract is confidential or proprietary, belonging to the buyer. (5) Any provision in which the seller stipulates to a confession of judgment. (6) Any provision requiring the seller to pay the buyer’s attorney’s fees and costs if the purchase agreement is not completed. (7) Any provision requiring the seller to pay any tax liability arising under the federal tax laws, other than the seller’s own tax liability, if any, that results from the transfer. (8) Any provision providing for brokerage fees incurred in the contract to be deducted from the purchase price disclosed pursuant to paragraph (5) of subdivision (b) of Section 10136. (9) If the payee is domiciled in California at the time that the transfer agreement is signed by the payee, any forum selection provision providing for jurisdiction to be in a court outside of California for any action arising under the contract. (10) If the payee is domiciled in California at the time that the transfer agreement is signed by the payee, any choice-of-law provision that provides for controlling law to be other than California law in any action arising under the contract. (11) A provision that provides the transferee with a security interest or collateral interest in any structured settlement payment rights that exceed the actual dollar amount of the structured settlement payment rights being transferred. (12) Any provision that creates a “buyer’s first right of refusal” to purchase any remaining structured payment rights that the payee may desire to sell in the future. (b) The provisions in this section may not be waived by agreement of the parties. (Amended by Stats. 2009, Ch. 593, Sec. 5. (SB 510) Effective January 1, 2010.)
  10. 10139.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    The transferee must keep specified transfer documents for at least the later of three years after the last structured-settlement payment or five years after the transfer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10139. The transferee shall retain, for three years after the date of the last payment under the structured settlement agreement, or for five years after the date of the transfer, whichever date is later, a copy of the transferee’s petition for approval filed pursuant to Section 10139.5, a copy of the written disclosure statement required by subdivision (b) of Section 10136, a copy of the transfer agreement as defined in subdivision (o) of Section 10134, and, unless excepted pursuant to subparagraph (H) of paragraph (2) of subdivision (f) of Section 10139.5, a copy of the annuity contract, any qualified assignment agreement, the underlying structured settlement agreement, or any order or approval of any court or responsible administrative authority authorizing or approving the structured settlement, and a copy and proof of notice to the interested parties, and a verified statement from the transferee stating that all of the conditions set forth in Sections 10136, 10137, and 10138 have been met. (Amended by Stats. 2021, Ch. 401, Sec. 23. (AB 1578) Effective January 1, 2022.)
  11. 10139.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    A subsequent transfer of additional structured settlement payments may occur only if all requirements of this article are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10139.1. Any subsequent transfer of any additional structured settlement payments between the payee and transferee may be made only after compliance with all of the requirements of this article. (Repealed and added by Stats. 2001, Ch. 624, Sec. 8. Effective January 1, 2002.)
  12. 10139.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    A required notice under this article counts as given if it is mailed to the recipient’s last known address by first-class postage, at least five calendar days before the notice is due.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10139.2. Any notice required by this article shall be deemed to have been given if addressed to the recipient’s last known address and deposited, first class postage paid, in the United States mail not less than five calendar days prior to the date on which notice is required. (Added by renumbering Section 10141 (as added by Stats. 1999, Ch. 742) by Stats. 2000, Ch. 135, Sec. 115. Effective January 1, 2001.)
  13. 10139.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    The payee cannot waive this article, the transferee is responsible for compliance with specified sections, the payee is protected from penalties or liability for noncompliance, the transferee or assignee may owe taxes caused by the transfer or noncompliance, and the issuer or obligor cannot be required to split payments.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10139.3. (a) None of the provisions of this article may be waived by the payee. (b) Compliance with the requirements set forth in Sections 10136, 10137, and 10138 shall be solely the responsibility of the transferee in any transfer of structured settlement payment rights. (c) A payee who proposes to make a transfer of structured settlement payment rights shall not incur any penalty, shall not forfeit any application fee or other payment, and shall not otherwise incur any liability to the proposed transferee based on any failure of that transfer to satisfy the requirements of Sections 10136, 10137, and 10138. (d) The transferee and any assignee shall be liable to the structured settlement obligor and the annuity issuer for any and all taxes incurred as a consequence of the transfer or as a consequence of any failure of the transferee or assignee to comply with this article or the terms of the structured settlement agreement. (e) Neither the annuity issuer nor the structured settlement obligor may be required to divide any structured settlement payment between the payee and any transferee or assignee or between two or more transferees or assignees. (Amended by Stats. 2009, Ch. 593, Sec. 7. (SB 510) Effective January 1, 2010.)
  14. 10139.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    If a transferee violates this article, the violation is treated as an unfair business practice and the transferee is subject to the chapter’s penalties and other remedies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10139.4. A violation of this article by a transferee shall constitute an unfair business practice pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code and shall be subject to the penalties and other remedies of that chapter. (Added by Stats. 2001, Ch. 624, Sec. 10. Effective January 1, 2002.)
  15. 10139.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. )

    Verify source ↗

    Transfers of structured settlement payment rights are ineffective unless a court approves them in advance, and the transferee must follow notice, petition, and disclosure requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.3. Transfers of Structured Settlement Payment Rights [10134 - 10139.5] ( Article 2.3 added by Stats. 1999, Ch. 742, Sec. 1. ) ## 10139.5. (a) A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express written findings by the court that: (1) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents. (2) The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received that advice or knowingly waived, in writing, the opportunity to receive the advice. (3) The transferee has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), the transferee has provided the payee with a disclosure form that complies with Section 10136, and the transfer agreement complies with Sections 10136 and 10138. (4) The transfer does not contravene any applicable statute or the order of any court or other government authority. (5) The payee understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136. (6) The payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement. (b) When determining whether the proposed transfer should be approved, including whether the transfer is fair, reasonable, and in the payee’s best interest, taking into account the welfare and support of the payee’s dependents, the court shall consider the totality of the circumstances, including, but not limited to, all of the following: (1) The reasonable preference and desire of the payee to complete the proposed transaction, taking into account the payee’s age, mental capacity, legal knowledge, and apparent maturity level. (2) The stated purpose of the transfer. (3) The payee’s financial and economic situation. (4) The terms of the transaction, including whether the payee is transferring monthly or lump sum payments or all or a portion of his or her future payments. (5) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to pay for the future medical care and treatment of the payee relating to injuries sustained by the payee in the incident that was the subject of the settlement and whether the payee still needs those future payments to pay for that future care and treatment. (6) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to provide for the necessary living expenses of the payee and whether the payee still needs the future structured settlement payments to pay for future necessary living expenses. (7) Whether the payee is, at the time of the proposed transfer, likely to require future medical care and treatment for the injuries that the payee sustained in connection with the incident that was the subject of the settlement and whether the payee lacks other resources, including insurance, sufficient to cover those future medical expenses. (8) Whether the payee has other means of income or support, aside from the structured settlement payments that are the subject of the proposed transfer, sufficient to meet the payee’s future financial obligations for maintenance and support of the payee’s dependents, specifically including, but not limited to, the payee’s child support obligations, if any. The payee shall disclose to the transferee and the court his or her court-ordered child support or maintenance obligations for the court’s consideration. (9) Whether the financial terms of the transaction, including the discount rate applied to determine the amount to be paid to the payee, the expenses and costs of the transaction for both the payee and the transferee, the size of the transaction, the available financial alternatives to the payee to achieve the payee’s stated objectives, are fair and reasonable. (10) Whether the payee completed previous transactions involving the payee’s structured settlement payments and the timing and size of the previous transactions and whether the payee was satisfied with any previous transaction. (11) Whether the transferee attempted previous transactions involving the payee’s structured settlement payments that were denied, or that were dismissed or withdrawn prior to a decision on the merits, within the past five years. (12) Whether, to the best of the transferee’s knowledge after making inquiry with the payee, the payee has attempted structured settlement payment transfer transactions with another person or entity, other than the transferee, that were denied, or which were dismissed or withdrawn prior to a decision on the merits, within the past five years. (13) Whether the payee, or his or her family or dependents, are in or are facing a hardship situation. (14) Whether the payee received independent legal or financial advice regarding the transaction. The court may deny or defer ruling on the petition for approval of a transfer of structured settlement payment rights if the court believes that the payee does not fully understand the proposed transaction and that independent legal or financial advice regarding the transaction should be obtained by the payee. (15) Any other factors or facts that the payee, the transferee, or any other interested party calls to the attention of the reviewing court or that the court determines should be considered in reviewing the transfer. (c) Every petition for approval of a transfer of structured settlement payment rights, except as provided in subdivision (d), shall include, to the extent known after the transferee has made reasonable inquiry with the payee, all of the following: (1) The payee’s name, address, and age. (2) The payee’s marital status, and, if married or separated, the name of the payee’s spouse. (3) The names, ages, and place or places of residence of the payee’s minor children or other dependents, if any. (4) The amounts and sources of the payee’s monthly income and financial resources and, if presently married, the amounts and sources of the monthly income and financial resources of the payee’s spouse. (5) Whether the payee is currently obligated under any child support or spousal support order, and, if so, the names, addresses, and telephone numbers of any individual, entity, or agency that is receiving child or spousal support from the payee under that order or that has jurisdiction over the order or the payments in question. (6) Information regarding previous transfers or attempted transfers, as described in paragraph (10), (11), or (12) of subdivision (b). The transferee or payee may choose to provide this information by providing copies of pleadings, transaction documents, or orders involving any previous attempted or completed transfer or by providing the court a summary of available information regarding any previous transfer or attempted transfer, such as the date of the transfer or attempted transfer, the payments transferred or attempted to be transferred by the payee in the earlier transaction, the amount of money received by the payee in connection with the previous transaction, and generally the payee’s reasons for pursuing or completing a previous transaction. The transferee’s inability to provide the information required by this paragraph shall not preclude the court from approving the proposed transfer, if the court determines that the information is not available to the transferee after the transferee has made a reasonable effort to secure the information, including making an inquiry with the payee. (d) With respect to the information required to be included in every petition for approval of a transfer of structured settlement payment rights pursuant to paragraphs (2), (3), (4), (5), and (6) of subdivision (c), that information shall be deemed to be included in the petition if it is provided at the scheduled hearing on the proposed transfer through oral testimony or documentary evidence filed with the court and made a part of the record consistent with the rules of evidence and procedure. (e) Following a transfer of structured settlement payment rights under this article: (1) The structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be discharged and released from any and all liability for the transferred payments. (2) The transferee shall be liable to the structured settlement obligor and the annuity issuer if the transfer contravenes the terms of the structured settlement for the following: (A) Any taxes incurred by those parties as a consequence of the transfer. (B) Any other liabilities or costs, including reasonable costs and attorney’s fees, arising from compliance by those parties with the order of the court or arising as a consequence of the transferee’s failure to comply with this article. (3) Neither the annuity issuer nor the structured settlement obligor may be required to divide any periodic payment between the payee and any transferee or assignee or between two, or more, transferees or assignees. (4) Any further transfer of structured settlement payment rights by the payee may be made only after compliance with all of the requirements of this article. (f) (1) A petition under this article for approval of a transfer of structured settlement payment rights shall be made by the transferee and brought in the county in which the payee resides at the time the transfer agreement is signed by the payee, or, if the payee is not domiciled in California, in the county in which the payee resides or in the county where the structured settlement obligor or annuity issuer is domiciled. (2) Not less than 20 days prior to the scheduled hearing on any petition for approval of a transfer of structured settlement payment rights under this article, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the petition for its authorization, and shall include the following with that notice: (A) A copy of the transferee’s current petition and any other prior petition, whether approved or withdrawn, that was filed with the court in accordance with paragraph (6) of subdivision (c). (B) A copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a). (C) A listing of each of the payee’s dependents, together with each dependent’s age. (D) A copy of the disclosure required in subdivision (b) of Section 10136. (E) A copy of the annuity contract, if available. (F) A copy of any qualified assignment agreement, if available. (G) A copy of the underlying structured settlement agreement, if available. (H) If a copy of a document described in subparagraph (E), (F), or (G) is unavailable or cannot be located, then the transferee is not required to attach a copy of that document to the petition or notice of the proposed transfer if the transferee satisfies the court that reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. If the documents are available, but contain a confidentiality or non­disclosure provision, then the transferee shall summarize in the petition the payments due and owing to the payee, and, if requested by the court, shall provide copies of the documents to the court at a scheduled hearing. (I) Proof of service showing compliance with the notification requirements of this section. (J) Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee’s petition, either in person or by counsel, by submitting written comments to the court or by participating in the hearing. (K) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the petition must be filed, which may not be less than 15 days after service of the transferee’s notice, in order to be considered by the court. (L) If the payee entered into the structured settlement at issue within five years prior to the date of the transfer agreement, then the transferee shall provide the following notice to the payee’s attorney of record at the time the structured settlement was created, if the attorney is licensed to practice in California, at the attorney’s address on file with the State Bar of California. The notice shall be delivered by regular mail and shall contain the following language: “Your former client, (insert name, address and telephone number of payee), the ‘payee,’ has entered into a contract with (insert name of transferee) to transfer and assign certain future structured settlement payment rights. The transaction is subject to court review and approval under California law. As the payee’s former attorney, you are entitled to receive this notice. You are not required to represent, advise, or consult with the payee in connection with the proposed transaction. You are not required to take any action at all in response to this notice. You may, but are not required to, contact the payee regarding the transaction. The payee is not required to consult with you or provide you any information regarding the transaction, but the payee may do so if he or she wishes.” The notice to the former attorney described in this section is not required to be provided if the payee in the transaction was not a party to the original structured settlement at issue (for example, if the payee is an heir or beneficiary of the person who was a party to the original structured settlement). Also, if the payee cannot recall or identify his or her former attorney and if the identity of the former attorney cannot be ascertained from the available structured settlement documents, then the notice described in this subparagraph is not required to be provided and the transfer may proceed without the notice. (g) All court costs and filing fees shall be paid by the transferee. (h) No later than the time of filing the petition for court approval, the transferee shall advise the payee of the payee’s right to seek independent counsel and financial advice in connection with the transferee’s petition for court approval of the transfer agreement, and shall further advise the payee that if the payee retains counsel, a licensed certified public accountant, or a licensed actuary in connection with a petition for an order approving the transfer agreement, that the transferee shall pay the fees of the payee’s counsel, accountant, or actuary, regardless of whether the transfer agreement is approved, and regardless of whether the attorney, accountant, or actuary files any document or appears at the hearing on the petition for transfer, in an aggregate amount not to exceed one thousand five hundred dollars ($1,500). The transferee’s accountant, counsel, or actuary may not advise the payee. (i) The court shall retain continuing jurisdiction to interpret and monitor the implementation and closing of the transaction that is the subject of the transfer agreement as justice requires. (Amended by Stats. 2024, Ch. 80, Sec. 96. (SB 1525) Effective January 1, 2025.)
  16. 1014.

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

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    When the commissioner makes a seizure under section 1013, the county sheriff and local police department must provide deputies, patrolmen, or officers needed to help carry out the seizure if the commissioner demands assistance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1014. Whenever the commissioner makes any seizure as provided in section 1013, it shall, on the demand of the commissioner, be the duty of the sheriff of any county of this State, and of the police department of any municipal corporation therein, to furnish him with such deputies, patrolmen or officers as may be necessary to assist the commissioner in making and enforcing any such seizure. (Amended by Stats. 1935, Ch. 291.)
  17. 10140.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    This section bars admitted insurers from discriminating in life and disability insurance based on protected traits, genetic characteristics, or sexual orientation, and restricts certain information gathering and rating practices.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10140. (a) No admitted insurer, licensed to issue life or disability insurance, shall fail or refuse to accept an application for that insurance, to issue that insurance to an applicant therefor, or issue or cancel that insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every race, color, religion, sex, gender, gender identity, gender expression, national origin, ancestry, or sexual orientation. Race, color, religion, national origin, ancestry, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance. Unless otherwise prohibited by law, premium, price, or charge differentials because of the sex of any individual when based on objective, valid, and up-to-date statistical and actuarial data or sound underwriting practices are not prohibited. (b) Except as otherwise permitted by law, no admitted insurer, licensed to issue disability insurance policies for hospital, medical, and surgical expenses, shall fail or refuse to accept an application for that insurance, fail or refuse to issue that insurance to an applicant therefor, cancel that insurance, refuse to renew that insurance, charge a higher rate or premium for that insurance, or offer or provide different terms, conditions, or benefits, or place a limitation on coverage under that insurance, on the basis of a person’s genetic characteristics that may, under some circumstances, be associated with disability in that person or that person’s offspring. (c) No admitted insurer, licensed to issue disability insurance for hospital, medical, and surgical expenses, shall seek information about a person’s genetic characteristics for any nontherapeutic purpose. (d) No discrimination shall be made in the fees or commissions of agents or brokers for writing or renewing a policy of disability insurance, other than disability income, on the basis of a person’s genetic characteristics that may, under some circumstances, be associated with disability in that person or that person’s offspring. (e) It shall be deemed a violation of subdivision (a) for any insurer to consider sexual orientation in its underwriting criteria or to utilize marital status, living arrangements, occupation, sex, beneficiary designation, ZIP Codes or other territorial classification within this state, or any combination thereof for the purpose of establishing sexual orientation or determining whether to require a test for the presence of the human immunodeficiency virus or antibodies to that virus, where that testing is otherwise permitted by law. Nothing in this section shall be construed to alter, expand, or limit in any manner the existing law respecting the authority of insurers to conduct tests for the presence of human immunodeficiency virus or evidence thereof. (f) This section shall not be construed to limit the authority of the commissioner to adopt regulations prohibiting discrimination because of sex, marital status, or sexual orientation or to enforce these regulations, whether adopted before or on or after January 1, 1991. (g) “Genetic characteristics” as used in this section shall have the same meaning as defined in Section 10123.3. (h) “Sex” as used in this section shall have the same meaning as “gender.” “Gender” means sex, and includes a person’s gender identity and gender expression. “Gender expression” means a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth. (Amended by Stats. 2011, Ch. 719, Sec. 26. (AB 887) Effective January 1, 2012.)
  18. 10140.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    This section limits disclosure of genetic test results in medical records by admitted life or disability insurers, and bars disclosure to third parties unless there is written authorization or a listed exception.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10140.1. (a) This section shall apply to the disclosure of genetic test results contained in an applicant or enrollee’s medical records by an admitted insurer licensed to issue life or disability insurance, except life and disability income policies issued or delivered on or after January 1, 1995, that are contingent upon review or testing for other diseases or medical conditions. (b) Any person who negligently discloses results of a test for a genetic characteristic to any third party in a manner that identifies or provides identifying characteristics, of the person to whom the test results apply, except pursuant to a written authorization as described in subdivision (g), shall be assessed a civil penalty in an amount not to exceed one thousand dollars ($1,000) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test. (c) Any person who willfully discloses the results of a test for a genetic characteristic to any third party in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization as described in subdivision (g), shall be assessed a civil penalty in an amount not less than one thousand dollars ($1,000) and no more than five thousand dollars ($5,000) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test. (d) Any person who willfully or negligently discloses the results of a test for a genetic characteristic to a third party in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization as described in subdivision (g), that results in economic, bodily, or emotional harm to the subject of the test, is guilty of a misdemeanor punishable by a fine not to exceed ten thousand dollars ($10,000). (e) In addition to the penalties listed in subdivisions (b) and (c), any person who commits any act described in subdivision (b) or (c) shall be liable to the subject for all actual damages, including damages for economic, bodily, or emotional harm which is proximately caused by the act. (f) Each disclosure made in violation of this section is a separate and actionable offense. (g) The applicant’s “written authorization,” as used in this section, shall satisfy the following requirements: (1) Is written in plain language. (2) Is dated and signed by the individual or a person authorized to act on behalf of the individual. (3) Specifies the types of persons authorized to disclose information about the individual. (4) Specifies the nature of the information authorized to be disclosed. (5) States the name or functions of the persons or entities authorized to receive the information. (6) Specifies the purposes for which the information is collected. (7) Specifies the length of time the authorization shall remain valid. (8) Advises the person signing the authorization of the right to receive a copy of the authorization. Written authorization is required for each separate disclosure of the test results, and the authorization shall set forth the person or entity to whom the disclosure would be made. (h) This section shall not apply to disclosures required by the Department of Health Services necessary to monitor compliance with Chapter 1 (commencing with Section 124975) of Part 5 of Division 106 of the Health and Safety Code, nor to disclosures required by the Department of Managed Health Care necessary to administer and enforce compliance with Section 1374.7 of the Health and Safety Code. (Amended by Stats. 2000, Ch. 857, Sec. 60. Effective January 1, 2001.)
  19. 10140.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Health insurance policies issued, amended, or renewed on or after January 1, 2011 cannot use premium, price, or charge differences based on sex.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10140.2. (a) Notwithstanding Section 10140, a health insurance policy issued, amended, or renewed on or after January 1, 2011, shall not be subject to premium, price, or charge differentials because of the sex of any contracting party, potential contracting party, or person reasonably expected to benefit from the policy as a policyholder, insured, or otherwise. (b) For purposes of this section, “sex” shall have the same meaning as “gender.” “Gender” means sex, and includes a person’s gender identity and gender expression. “Gender expression” means a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth. (Amended by Stats. 2011, Ch. 719, Sec. 27. (AB 887) Effective January 1, 2012.)
  20. 10140.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    The commissioner may assess administrative penalties against life or disability insurers that violate Section 10140.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10140.5. (a) In addition to any other remedy permitted by law, the commissioner shall have the administrative authority to assess penalties specified in this section against life or disability insurers for violations of Section 10140. (b) Any life or disability insurer that violates Section 10140 is liable for administrative penalties of not more than two thousand five hundred dollars ($2,500) for the first violation and not more than five thousand dollars ($5,000) for each subsequent violation. (c) Any life or disability insurer that violates Section 10140 with a frequency that indicates a general business practice or commits a knowing violation of that section, is liable for administrative penalties of not less than fifteen thousand dollars ($15,000) and not more than one hundred thousand dollars ($100,000) for each violation. (d) An act or omission that is inadvertent and that results in incorrect premium rates being charged to more than one subscriber shall be a single violation for the purpose of this section. (Added by Stats. 1995, Ch. 695, Sec. 9. Effective January 1, 1996.)
  21. 10141.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Insurance applications and related investigation reports used to assess insurability must not include identification of the applicant’s race, color, religion, ancestry, national origin, or sexual orientation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10141. No application for insurance or insurance investigation report furnished by such an insurer to its agents or employees for use in determining the insurability of the applicant shall carry any identification, or any requirement therefor, of the applicant’s race, color, religion, ancestry, national origin, or sexual orientation. (Amended by Stats. 2008, Ch. 682, Sec. 6. Effective January 1, 2009.)
  22. 10142.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    An insurance application may ask an applicant’s birthplace if the question is used only to identify the applicant and not to discriminate.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10142. Nothing in this article shall prohibit use in an application for life or disability insurance of a question asking for the birthplace of an applicant if such question is used only to identify the applicant and not to discriminate against him. (Added by Stats. 1971, Ch. 50.)
  23. 10143.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Licensed insurance companies may not deny, price up, or restrict life or disability insurance because an applicant carries certain gene traits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10143. (a) No insurance company licensed in this state shall refuse to issue or sell or renew any policy of life or disability insurance after appropriate application solely by reason of the fact that the person to be insured carries a gene which may, under some circumstances, be associated with disability in that person’s offspring, but which causes no adverse effects on the carrier. Such genes shall include, but not be limited to, Tay-Sachs trait, sickle cell trait, thalassemia trait, and X-linked hemophilia A. No such policy issued and delivered in this state to any association, corporation, firm, fund, individual, group, order, organization, society, or trust subject to the supervision of the commissioner shall demand or require a higher premium rate or charge by reason of the fact that the person to be insured carries such traits than is at that time required of any other association, corporation, firm, fund, individual, group, order, organization, society, or trust in an otherwise identical classification, nor shall any association, corporation, firm, fund, group, individual, order, organization, society, or trust make or require any rebate, discrimination, or discount upon the amount to be paid or the service to be rendered on such policy because the person to be insured carries such traits. (b) No insurance company licensed in this state shall insert in a policy of life or disability insurance any condition, nor make any stipulation, whereby the person insured who carries a gene which may, under some circumstances, be associated with disability in that person’s offspring, but which causes no adverse effects on the carrier, including, but not limited to, Tay-Sachs trait, sickle cell trait, thalassemia trait, and X-linked hemophilia A, shall bind himself, his heirs, executors, administrators, or assignees to accept any sum or service less than the full value or amount of the policy in case of a claim accruing thereon other than such as are imposed upon other persons in similar cases and any such stipulation or condition so made or inserted shall be void. (c) No insurance company licensed in this state shall fix any lower rate in the fees or commissions of agents or brokers for writing or renewing a policy of life or disability insurance solely because the applicant carries a gene which may, under some circumstances, be associated with disability in that person’s offspring, but which causes no adverse effects on the carrier. Such genes shall include, but are not limited to, Tay-Sachs trait, sickle cell trait, or X-linked hemophilia A. (Added by Stats. 1977, Ch. 732.)
  24. 10144.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    An insurer generally may not deny, continue denying, limit, or price individual or group life, annuity, or disability insurance differently just because of a physical or mental impairment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144. No insurer issuing, providing, or administering any contract of individual or group insurance providing life, annuity, or disability benefits applied for and issued on or after January 1, 1984, shall refuse to insure, or refuse to continue to insure, or limit the amount, extent, or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of a physical or mental impairment, except where the refusal, limitation or rate differential is based on sound actuarial principles or is related to actual and reasonably anticipated experience. “Physical or mental impairment” means any physical, sensory, or mental impairment which substantially limits one or more of that person’s major life activities. (Amended by Stats. 1985, Ch. 971, Sec. 1.5.)
  25. 10144.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    If a disability insurer denies coverage for an experimental medical procedure or treatment for a claimant with a terminal illness, it must send written notice to the claimant or representative and explain the denial, alternatives, and appeal/review process.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.1. A disability insurer that denies coverage for an experimental medical procedure or plan of treatment for a claimant with a terminal illness, which for the purposes of this section refers to an incurable or irreversible condition that has a high probability of causing death within one year or less, under a disability insurance policy that includes hospital, medical, or surgical coverage issued in this state shall provide written notification directly to the claimant or representative, which shall include all of the following: (a) The specific medical and scientific reasons for the denial and specific references to pertinent policy provisions upon which the denial is based. (b) A description of the alternative medical procedures or treatments covered by the policy, if any. Compliance with this subdivision by an insurer shall not be construed to mean that the insurer is engaging in the unlawful practice of medicine. (c) A description of the process by which the claimant or representative may exercise his or her right to appeal the denial and obtain and participate in a review of the information provided to the claimant or representative pursuant to subdivisions (a) and (b). The review shall not be limited to written communication and shall be provided by the appropriate named fiduciary or his or her designee rendering the decision. The review shall be provided to the claimant within 30 calendar days following the receipt of the request for review. However, the review required by this section shall be held within five business days if the treating physician determines, in consultation with the medical director of the insurer, based on standard medical practice, that the effectiveness of either the proposed treatment, services, or supplies or any alternative treatment, services, or supplies covered by the policy, would be materially reduced if not provided at the earliest possible date. (Added by Stats. 1994, Ch. 582, Sec. 2. Effective January 1, 1995.)
  26. 10144.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    A disability insurer covering hospital, medical, or surgical expenses cannot treat domestic violence as a reason to deny or change coverage or rates, but may underwrite based on medical condition if specific safeguards are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.2. (a) No disability insurer covering hospital, medical, or surgical expenses shall deny, refuse to insure, refuse to renew, cancel, restrict, or otherwise terminate, exclude, or limit coverage or charge a different rate for the same coverage, on the basis that the applicant or insured person is, has been, or may be a victim of domestic violence. (b) Nothing in this section shall prevent a disability insurer covering hospital, medical, or surgical expenses from underwriting coverage on the basis of the medical condition of an individual so long as the consideration of the condition (1) does not take into account whether such an individual’s medical condition was caused by an act of domestic violence, (2) is the same with respect to an applicant or insured who is not the subject of domestic violence as with an applicant or insured who is the subject of domestic violence, and (3) does not violate any other act, regulation, or rule of law. The fact that an individual is, has been, or may be the subject of domestic violence shall not be considered a medical condition. (c) As used in this section, “domestic violence” means domestic violence, as defined in Section 6211 of the Family Code. (Added by Stats. 1995, Ch. 603, Sec. 2. Effective January 1, 1996.)
  27. 10144.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Life insurers may not deny, cancel, renew away, or refuse life insurance applications or coverage because someone is or was a victim of domestic violence.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.3. (a) No admitted insurer licensed to issue life insurance shall refuse to accept an application for insurance, refuse to issue or renew a policy, cancel a policy, or deny coverage under a policy because the applicant for insurance or any person who is or would be insured is, or has been, a victim of domestic violence. (b) Nothing in this section shall prevent a life insurer from taking any of the actions set forth in subdivision (a) on the basis of criteria not otherwise made invalid by this section or any other act, regulation, or rule of law. If discrimination by a life insurer is not in violation of this section but is based on any other criteria that are allowable by law, the fact that the applicant or insured is, has been, or may be the subject of domestic violence shall be irrelevant. (c) Nothing in this section shall require a life insurer to pay for any loss if that payment is prohibited by Section 533. (d) As used in this section, “domestic violence” means domestic violence as defined in Section 6211 of the Family Code. (Added by Stats. 1997, Ch. 176, Sec. 1. Effective January 1, 1998.)
  28. 10144.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Certain health insurance policies must cover mental health and substance use disorder benefits in line with specified federal parity rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.4. (a) A large group health insurance policy shall provide all covered mental health and substance use disorder benefits in compliance with the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Public Law 110-343) and all rules, regulations, and guidance issued pursuant to Section 2726 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26). (b) An individual or small group health insurance policy shall provide all covered mental health and substance use disorder benefits in compliance with the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Public Law 110-343), all rules, regulations, and guidance issued pursuant to Section 2726 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26), and Section 10112.27. (Added by Stats. 2017, Ch. 162, Sec. 1. (SB 374) Effective January 1, 2018.)
  29. 10144.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Disability insurers must cover medically necessary mental health and substance use disorder treatment in qualifying policies, and may not cap it at short-term or acute care.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.5. (a) (1) Every disability insurance policy issued, amended, or renewed on or after January 1, 2021, that provides hospital, medical, or surgical coverage shall provide coverage for medically necessary treatment of mental health and substance use disorders, under the same terms and conditions applied to other medical conditions as specified in subdivision (c). (2) For purposes of this section, “mental health and substance use disorders” means a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the World Health Organization’s International Statistical Classification of Diseases and Related Health Problems, or that is listed in the most recent version of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders. Changes in terminology, organization, or classification of mental health and substance use disorders in future versions of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders or the World Health Organization’s International Statistical Classification of Diseases and Related Health Problems shall not affect the conditions covered by this section as long as a condition is commonly understood to be a mental health or substance use disorder by health care providers practicing in relevant clinical specialties. (3) (A) For purposes of this section, “medically necessary treatment of a mental health or substance use disorder” means a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing, or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is all of the following: (i) In accordance with the generally accepted standards of mental health and substance use disorder care. (ii) Clinically appropriate in terms of type, frequency, extent, site, and duration. (iii) Not primarily for the economic benefit of the disability insurer and insureds or for the convenience of the patient, treating physician, or other health care provider. (B) This paragraph does not limit in any way the independent medical review rights of an insured or policyholder under this chapter. (4) “Health care provider” means any of the following: (A) A person who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code. (B) An associate marriage and family therapist or marriage and family therapist trainee functioning pursuant to Section 4980.43.3 of the Business and Professions Code. (C) A qualified autism service provider certified by a national entity as defined in Section 4999.200 of the Business and Professions Code or a qualified autism service professional as defined in Section 4999.201 of the Business and Professions Code. (D) An associate clinical social worker functioning pursuant to Section 4996.23.2 of the Business and Professions Code. (E) An associate professional clinical counselor or professional clinical counselor trainee functioning pursuant to Section 4999.46.3 of the Business and Professions Code. (F) A registered psychologist, as described in Section 2909.5 of the Business and Professions Code. (G) A registered psychological assistant, as described in Section 2913 of the Business and Professions Code. (H) A psychology trainee or person supervised as set forth in Section 2910 or 2911 of, or subdivision (d) of Section 2914 of, the Business and Professions Code. (5) For purposes of this section, “generally accepted standards of mental health and substance use disorder care” has the same meaning as defined in paragraph (1) of subdivision (f) of Section 10144.52. (6) A disability insurer shall not limit benefits or coverage for mental health and substance use disorders to short-term or acute treatment. (7) All medical necessity determinations made by the disability insurer concerning service intensity, level of care placement, continued stay, and transfer or discharge of insureds diagnosed with mental health and substance use disorders shall be conducted in accordance with the requirements of Section 10144.52. (8) A disability insurer that authorizes a specific type of treatment by a provider pursuant to this section shall not rescind or modify the authorization after the provider renders the health care service in good faith and pursuant to this authorization for any reason, including, but not limited to, the insurer’s subsequent rescission, cancellation, or modification of the insured’s or policyholder’s contract, or the insurer’s subsequent determination that it did not make an accurate determination of the insured’s or policyholder’s eligibility. This section shall not be construed to expand or alter the benefits available to the insured or policyholder under an insurance policy. (b) The benefits that shall be covered pursuant to this section shall include, but not be limited to, the following: (1) Basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code. (2) Intermediate services, including the full range of levels of care, including, but not limited to, residential treatment, partial hospitalization, and intensive outpatient treatment. (3) Prescription drugs, if the policy includes coverage for prescription drugs. (c) The terms and conditions applied to the benefits required by this section, that shall be applied equally to all benefits under the disability insurance policy shall include, but not be limited to, all of the following patient financial responsibilities: (1) Maximum and annual lifetime benefits, if not prohibited by applicable law. (2) Copayments and coinsurance. (3) Individual and family deductibles. (4) Out-of-pocket maximums. (d) If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards set by law or regulation, the disability insurer shall arrange coverage to ensure the delivery of medically necessary out-of-network services and any medically necessary followup services that, to the maximum extent possible, meet those geographic and timely access standards. As used in this subdivision, to “arrange coverage to ensure the delivery of medically necessary out-of-network services” includes, but is not limited to, providing services to secure medically necessary out-of-network options that are available to the insured within geographic and timely access standards. The insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from an in-network provider. (e) This section shall not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies. (f) (1) For the purpose of compliance with this section, a disability insurer may provide coverage for all or part of the mental health and substance use disorder services required by this section through a separate specialized health insurance policy or mental health policy. This paragraph shall not apply to policies that are subject to Section 10112.27. (2) A disability insurer shall provide the mental health and substance use disorder coverage required by this section in its entire service area and in emergency situations as may be required by applicable laws and regulations. For purposes of this section, disability insurance policies that provide benefits to insureds through preferred provider contracting arrangements are not precluded from requiring insureds who reside or work in geographic areas served by specialized health insurance policies or mental health insurance policies to secure all or part of their mental health services within those geographic areas served by specialized health insurance policies or mental health insurance policies, provided that all appropriate mental health or substance use disorder services are actually available within those geographic service areas within timeliness standards. (3) Notwithstanding any other law, in the provision of benefits required by this section, a disability insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing, provided that these practices are consistent with Section 10144.4 of this code, and Section 2052 of the Business and Professions Code. (g) This section shall not be construed to deny or restrict in any way the department’s authority to ensure a disability insurer’s compliance with this code. (h) A disability insurer shall not limit benefits or coverage for medically necessary services on the basis that those services should be or could be covered by a public entitlement program, including, but not limited to, special education or an individualized education program, Medicaid, Medicare, Supplemental Security Income, or Social Security Disability Insurance, and shall not include or enforce a contract term that excludes otherwise covered benefits on the basis that those services should be or could be covered by a public entitlement program. (i) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section. (j) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation. (Amended by Stats. 2025, Ch. 413, Sec. 7. (SB 402) Effective January 1, 2026.)
  30. 10144.51.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Health insurance policies must cover behavioral health treatment for autism or pervasive developmental disorder, and insurers may not require a rediagnosis to keep that coverage after January 1, 2026.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.51. (a) (1) Every health insurance policy shall also provide coverage for behavioral health treatment for pervasive developmental disorder or autism no later than July 1, 2012. The coverage shall be provided in the same manner and is subject to the same requirements as provided in Section 10144.5. (2) Notwithstanding paragraph (1), as of the date that the proposed final rulemaking for essential health benefits is issued, this section does not require any benefits to be provided that exceed the essential health benefits that all health insurers will be required by federal regulations to provide under Section 1302(b) of 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). (3) This section does not affect services for which an individual is eligible pursuant to Division 4.5 (commencing with Section 4500) of the Welfare and Institutions Code or Title 14 (commencing with Section 95000) of the Government Code. (4) This section does not affect or reduce any obligation to provide services under an individualized education program, as defined in Section 56032 of the Education Code, or an individual service plan, as described in Section 5600.4 of the Welfare and Institutions Code, or under the federal Individuals with Disabilities Education Act (20 U.S.C. Sec. 1400 et seq.) and its implementing regulations. (b) Pursuant to Article 6 (commencing with Section 2240) of Subchapter 2 of Chapter 5 of Title 10 of the California Code of Regulations, every health insurer subject to this section shall maintain an adequate network that includes qualified autism service providers who supervise or employ qualified autism service professionals or paraprofessionals who provide and administer behavioral health treatment. A health insurer is not prevented from selectively contracting with providers within these requirements. (c) (1) A health insurance policy issued, amended, or renewed on or after January 1, 2026, shall not require an insured previously diagnosed with pervasive developmental disorder or autism to receive a rediagnosis to maintain coverage for behavioral health treatment for pervasive developmental disorder or autism. (2) This subdivision does not prohibit or restrict a treating provider from reevaluating an insured for purposes of determining the appropriate treatment. The treatment plan shall be made available to the insurer upon request. (3) This subdivision does not prohibit a treating provider from prescribing a rediagnosis at the discretion of the physician licensed pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code or a psychologist licensed pursuant to Chapter 6.6 (commencing with Section 2900) of Division 2 of the Business and Professions Code. (4) A health insurer shall not discontinue or delay existing treatment while waiting for a rediagnosis to be completed. (5) This subdivision does not prohibit a health insurer from requiring utilization review. For the purpose of this section, utilization review is distinct from a rediagnosis. (d) For the purposes of this section, the following definitions shall apply: (1) “Behavioral health treatment” means professional services and treatment programs, including applied behavior analysis and evidence-based behavior intervention programs, that develop or restore, to the maximum extent practicable, the functioning of an individual with pervasive developmental disorder or autism, and that meet all of the following criteria: (A) The treatment is prescribed by a physician and surgeon licensed pursuant to Chapter 5 (commencing with Section 2000) of, or is developed by a psychologist licensed pursuant to Chapter 6.6 (commencing with Section 2900) of, Division 2 of the Business and Professions Code. (B) The treatment is provided under a treatment plan prescribed by a qualified autism service provider and is administered by one of the following: (i) A qualified autism service provider. (ii) A qualified autism service professional supervised by the qualified autism service provider. (iii) A qualified autism service paraprofessional supervised by a qualified autism service provider or qualified autism service professional. (C) The treatment plan has measurable goals over a specific timeline that is developed and approved by the qualified autism service provider for the specific patient being treated. The treatment plan shall be reviewed no less than once every six months by the qualified autism service provider and modified whenever appropriate, and shall be consistent with Section 4686.2 of the Welfare and Institutions Code pursuant to which the qualified autism service provider does all of the following: (i) Describes the patient’s behavioral health impairments or developmental challenges that are to be treated. (ii) Designs an intervention plan that includes the service type, number of hours, and parent participation needed to achieve the plan’s goal and objectives, and the frequency at which the patient’s progress is evaluated and reported. (iii) Provides intervention plans that utilize evidence-based practices, with demonstrated clinical efficacy in treating pervasive developmental disorder or autism. (iv) Discontinues intensive behavioral intervention services when the treatment goals and objectives are achieved or no longer appropriate. (D) The treatment plan is not used for purposes of providing or for the reimbursement of respite, daycare, or educational services and is not used to reimburse a parent for participating in the treatment program. The treatment plan shall be made available to the insurer upon request. (2) “Qualified autism service provider” means an individual described in Section 4999.200 of the Business and Professions Code. (3) “Qualified autism service professional” means an individual who meets all of the criteria set forth in Section 4999.201 of the Business and Professions Code. (4) “Qualified autism service paraprofessional” means an unlicensed and uncertified individual who meets all of the criteria set forth in Section 4999.202 of the Business and Professions Code. (5) “Rediagnosis” means a subsequent undertaking by any method, device, or procedure, whether gratuitous or not, to ascertain or establish if a person is suffering from a physical or mental health disorder, pursuant to Section 2038 of the Business and Professions Code. “Rediagnosis” also means prescription of a subsequent diagnosis of pervasive developmental disorders or autism to ascertain or establish if a person is suffering from a pervasive developmental disorder or autism. (6) “Utilization review” means utilization review or utilization management functions that prospectively, retrospectively, or concurrently review and approve, modify, or deny, based in whole or in part on medical necessity to cure and relieve, treatment recommendations by physicians licensed pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code before, after, or concurrent with the provision of medical treatment services. “Utilization review” refers to an evaluation of existing treatment to ensure the insured receives the proper care at the proper time. (e) This section does not apply to either of the following: (1) A specialized health insurance policy that does not cover mental health or behavioral health services or an accident-only, specified disease, hospital indemnity, or Medicare supplement policy. (2) A health insurance policy in the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code). (f) This section does not limit the obligation to provide services under Section 10144.5. (g) As provided in Section 10144.5 and in paragraph (1) of subdivision (a), in the provision of benefits required by this section, a health insurer may utilize case management, network providers, utilization review techniques, prior authorization, copayments, or other cost sharing. (Amended by Stats. 2025, Ch. 413, Sec. 8.5. (SB 402) Effective January 1, 2026.)
  31. 10144.52.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    A disability insurer covering hospital, medical, or surgical expenses must base mental health and substance use disorder medical-necessity and utilization-review decisions on current generally accepted standards, follow the most recent specialty-treatment criteria, avoid more restrictive criteria, verify purchased criteria before use, and meet training and reliability requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.52. (a) A disability insurer that provides hospital, medical, or surgical coverage shall base any medical necessity determination or the utilization review criteria that the insurer, and any entity acting on the insurer’s behalf, applies to determine the medical necessity of health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders on current generally accepted standards of mental health and substance use disorder care. (b) In conducting utilization review of all covered health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders in children, adolescents, and adults, a disability insurer shall apply the criteria and guidelines set forth in the most recent versions of the treatment criteria developed by the nonprofit professional association for the relevant clinical specialty. (c) In conducting utilization review involving level of care placement decisions or any other patient care decisions that are within the scope of the sources specified in subdivision (b), a disability insurer shall not apply different, additional, conflicting, or more restrictive utilization review criteria than the criteria and guidelines set forth in those sources. This subdivision does not prohibit a disability insurer from applying utilization review criteria to health care services and benefits for mental health and substance use disorders that meet either of the following criteria: (1) Are outside the scope of the criteria and guidelines set forth in the sources specified in subdivision (b), provided the utilization review criteria were developed in accordance with subdivision (a). (2) Relate to advancements in technology or types of care that are not covered in the most recent versions of the sources specified in subdivision (b), provided that the utilization review criteria were developed in accordance with subdivision (a). (d) If a disability insurer purchases or licenses utilization review criteria pursuant to paragraph (1) or (2) of subdivision (c), the insurer shall verify and document before use that the criteria were developed in accordance with subdivision (a). (e) To ensure the proper use of the criteria described in subdivision (b), every disability insurer shall do all of the following: (1) Sponsor a formal education program by nonprofit clinical specialty associations to educate the disability insurer’s staff, including any third parties contracted with the disability insurer to review claims, conduct utilization reviews, or make medical necessity determinations about the clinical review criteria. (2) Make the education program available to other stakeholders, including the insurer’s participating providers and covered lives. (3) Provide, at no cost, the clinical review criteria and any training material or resources to providers and insured patients. (4) Track, identify, and analyze how the clinical review criteria are used to certify care, deny care, and support the appeals process. (5) Conduct interrater reliability testing to ensure consistency in utilization review decisionmaking covering how medical necessity decisions are made. This assessment shall cover all aspects of utilization review as defined in paragraph (3) of subdivision (f). (6) Run interrater reliability reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities. (7) Achieve interrater reliability pass rates of at least 90 percent and, if this threshold is not met, immediately provide for the remediation of poor interrater reliability and interrater reliability testing for all new staff before they can conduct utilization review without supervision. (f) The following definitions apply for purposes of this section: (1) “Generally accepted standards of mental health and substance use disorder care” means standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment pursuant to Section 10144.51. Valid, evidence-based sources establishing generally accepted standards of mental health and substance use disorder care include peer-reviewed scientific studies and medical literature, clinical practice guidelines and recommendations of nonprofit health care provider professional associations, specialty societies and federal government agencies, and drug labeling approved by the United States Food and Drug Administration. (2) “Mental health and substance use disorders” has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5. (3) “Utilization review” means either of the following: (A) Prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by health care providers, insureds, or their authorized representatives for coverage of health care services prior to, retrospectively or concurrent with the provision of health care services to insureds. (B) Evaluating the medical necessity, appropriateness, level of care, service intensity, efficacy, or efficiency of health care services, benefits, procedures, or settings, under any circumstances, to determine whether a health care service or benefit subject to a medical necessity coverage requirement in a disability insurance policy is covered as medically necessary for an insured. (4) “Utilization review criteria” means any criteria, standards, protocols, or guidelines used by a disability insurer to conduct utilization review. (g) This section applies to all health care services and benefits for the diagnosis, prevention, and treatment of mental health and substance use disorders covered by a disability insurance policy, including prescription drugs. (h) This section applies to a disability insurer that covers hospital, medical, or surgical expenses and conducts utilization review as defined in this section, and any entity or contracting provider that performs utilization review or utilization management functions on an insurer’s behalf. (i) If the commissioner determines that a disability insurer has violated this section, the commissioner may, after appropriate notice and opportunity for hearing in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), by order, assess a civil penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation. (j) A disability insurer shall not adopt, impose, or enforce terms in its policies or provider agreements, in writing or in operation, that undermine, alter, or conflict with the requirements of this section. (k) This section does not apply to accident-only, specified disease, hospital indemnity, Medicare supplement, dental-only, or vision-only insurance policies. (Added by Stats. 2020, Ch. 151, Sec. 8. (SB 855) Effective January 1, 2021.)
  32. 10144.53.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Disability insurers must cover certain mental health and substance use disorder services delivered at schoolsites, reimburse eligible providers or schools, and may not require prior authorization except as authorized by the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.53. (a) (1) A disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2024, that is required to provide coverage for medically necessary treatment of mental health and substance use disorders pursuant to Sections 10144.5, 10144.51, and 10144.52 shall cover the provision of the services identified in the fee-for-service reimbursement schedule published by the State Department of Health Care Services, as described in subparagraph (B) of paragraph (5) of subdivision (c), when those services are delivered at schoolsites pursuant to this section, regardless of the network status of the local educational agency, institution of higher education, or health care provider. (2) This section does not relieve a local educational agency or institution of higher education from requirements to accommodate or provide services to students with disabilities pursuant to any applicable state and federal law, including, but not limited to, the federal Individuals with Disabilities Education Act (20 U.S.C. Sec. 1400 et seq.), Part 30 (commencing with Section 56000) of Division 4 of Title 2 of the Education Code, Chapter 26.5 (commencing with Section 7570) of Division 7 of Title 1 of the Government Code, and Chapter 3 (commencing with Section 3000) of Division 1 of Title 5 of the California Code of Regulations. (b) The following definitions apply for purposes of this section: (1) “Health care provider” has the same meaning as defined in paragraph (4) of subdivision (a) of Section 10144.5 and paragraph (5) of subdivision (c) of Section 10144.51. (2) “Institution of higher education” means the California Community Colleges, the California State University, or the University of California. (3) “Local educational agency” means a school district, county office of education, charter school, the California Schools for the Deaf, and the California School for the Blind. (4) “Medically necessary treatment of a mental health or substance use disorder” has the same meaning as defined in paragraph (3) of subdivision (a) of Section 10144.5. (5) “Mental health and substance use disorders” has the same meaning as defined in paragraph (2) of subdivision (a) of Section 10144.5. (6) “Schoolsite” means a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes. “Schoolsite” also includes a location not owned or operated by a public school, or public school district if the school or school district provides or arranges for the provision of medically necessary treatment of a mental health or substance use disorder to its students at that location, including off-campus clinics, mobile counseling services, and similar locations. (7) “Utilization review” has the same meaning as defined in paragraph (3) of subdivision (f) of Section 10144.52. (c) If a local educational agency or institution of higher education provides or arranges for the provision of treatment of a mental health or substance use disorder services subject to this section by a health care provider at a schoolsite for an individual 25 years of age or younger, the student’s disability insurer shall reimburse the local educational agency or institution of higher education for those services. (1) A disability insurer shall not require prior authorization for services provided pursuant to this section. (2) A disability insurer may conduct a postclaim review to determine appropriate payment of the claim. Payment for services subject to this section may be denied only if the disability insurer reasonably determines that the services were provided to a student not covered by the insurer, were never performed, or were not provided by a health care provider appropriately licensed or authorized to provide the services. (3) Notwithstanding paragraph (1), a disability insurer may require prior authorization for services as authorized by the commissioner, pursuant to subdivision (d). (4) A local educational agency, community college district, the California State University system, or the Regents of the University of California may consolidate claims for purposes of submission to a disability insurer. (5) A disability insurer shall provide reimbursement for services provided to students pursuant to this section at the greater of either of the following amounts: (A) The disability insurer’s contracted rate with the local educational agency, institution of higher education, or health care provider, if any. (B) The fee-for-service reimbursement rate published by the State Department of Health Care Services for the same or similar services provided in an outpatient setting, pursuant to Section 5961.4 of the Welfare and Institutions Code. (6) A disability insurer shall provide reimbursement for services provided pursuant to this section in compliance with the requirements for timely payment of claims as required by this chapter. (7) Services provided pursuant to this section shall not be subject to copayment, coinsurance, deductible, or any other form of cost sharing. (8) An individual or entity shall not bill the policyholder or insured, nor seek reimbursement from the policyholder or insured, for services provided pursuant to this section. (d) The commissioner shall issue guidance to disability insurers regarding compliance with this section, as well as requirements necessary to comply with Section 5961.4 of the Welfare and Institutions Code. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Guidance issued pursuant to this subdivision shall be effective only until the commissioner adopts regulations pursuant to the Administrative Procedure Act. (Amended by Stats. 2024, Ch. 999, Sec. 4. (AB 177) Effective September 30, 2024.)
  33. 10144.54.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Insurers must cover and reimburse certain CARE-agreement or CARE-plan services, cannot require prior authorization except as permitted by the department, and may not make the insured pay cost sharing for those services (except prescription drugs).

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.54. (a) An insurance policy issued, amended, renewed, or delivered on or after July 1, 2023, shall cover the cost of developing an evaluation pursuant to Section 5977.1 of the Welfare and Institutions Code and the provision of all health care services for an insured when required or recommended for the insured pursuant to a CARE agreement or CARE plan approved by a court in accordance with the court’s authority under Sections 5977.1, 5977.2, 5977.3, and 5982 of the Welfare and Institutions Code, regardless of whether the service is delivered by an in-network or out-of-network provider. (b) (1) An insurer shall not require prior authorization for services, other than prescription drugs, provided pursuant to a CARE agreement or CARE plan approved by a court pursuant to Part 8 (commencing with Section 5970) of Division 5 of the Welfare and Institutions Code. (2) An insurer may conduct a postclaim review to determine appropriate payment of a claim. Payment for services subject to this section may be denied only if the insurer reasonably determines the insured was not insured at the time the services were rendered, the services were never performed, or the services were not provided by a health care provider appropriately licensed or authorized to provide the services. (3) Notwithstanding paragraph (1), an insurer may require prior authorization for services as permitted by the department pursuant to subdivision (e). (c) (1) An insurer shall provide for reimbursement of services provided to an insured pursuant to this section, other than prescription drugs, at the greater of either of the following amounts: (A) The insurer’s contracted rate with the provider. (B) The fee-for-service or case reimbursement rate paid in the Medi-Cal program for the same or similar services as identified by the State Department of Health Care Services. (2) An insurer shall provide for reimbursement of prescription drugs provided to an insured pursuant to this section at the insurer’s contracted rate. (3) An insurer shall provide reimbursement for services provided pursuant to this section in compliance with the requirements for timely payment of claims, as required by this chapter. (d) Services provided to an insured pursuant to a CARE agreement or CARE plan, excluding prescription drugs, shall not be subject to copayment, coinsurance, deductible, or any other form of cost sharing. An individual or entity shall not bill the insured, nor seek reimbursement from the insured, for services provided pursuant to a CARE agreement or CARE plan, regardless of whether the service is delivered by an in-network or out-of-network provider. (e) No later than July 1, 2023, the department may issue guidance to insurers regarding compliance with this section. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Guidance issued pursuant to this subdivision shall be effective only until the department adopts regulations pursuant to the Administrative Procedure Act. (f) This section does not excuse an insurer from complying with Section 10144.5. (Added by Stats. 2022, Ch. 319, Sec. 3. (SB 1338) Effective January 1, 2023.)
  34. 10144.55.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Certain short-term disability income insurance policies must cover disability caused by severe mental illnesses.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.55. (a) Every policy of disability income insurance, as defined in subdivision (c) of Section 799.01, that is of a short-term limited duration of two years or less, that is issued, amended, or renewed on or after July 1, 2014, and that provides disability income benefits shall provide coverage for disability caused by severe mental illnesses. (b) For the purposes of this section, “severe mental illnesses” shall include: (1) Schizophrenia. (2) Schizoaffective disorder. (3) Bipolar disorder (manic-depressive illness). (4) Major depressive disorders, including postpartum depression. (5) Panic disorder. (6) Obsessive-compulsive disorder. (7) Pervasive developmental disorder or autism. (8) Anorexia nervosa. (9) Bulimia nervosa. (Amended by Stats. 2022, Ch. 424, Sec. 26. (SB 1242) Effective January 1, 2023.)
  35. 10144.56.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    A disability insurer covered by this section must assess and verify a provider’s qualifications within 60 days after receiving a completed credentialing application, and must notify the applicant within seven business days that the application was received and whether it is complete.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.56. (a) For provider contracts issued, amended, or renewed on and after January 1, 2023, a disability insurer that provides coverage for mental health and substance use disorders and that credentials health care providers of those services for its networks shall assess and verify the qualifications of a health care provider within 60 days after receiving a completed provider credentialing application. Upon receipt of the application by the credentialing department, the disability insurer shall notify the applicant within seven business days, to verify receipt and inform the applicant whether the application is complete. The 60-day timeline shall apply only to the credentialing process and does not include contracting completion. (b) For the purposes of this section, “mental health and substance use disorder” and “health care provider” have the same meanings as defined in Section 10144.5. (Added by Stats. 2022, Ch. 533, Sec. 2. (AB 2581) Effective January 1, 2023.)
  36. 10144.565.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    A health insurer or its delegate must decide on a completed provider credentialing application within 90 days and send required notices on receipt and approval timelines.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.565. Except as provided in Section 10144.56, within one year of the operative date of this section, a health insurer or its delegate that credentials health care providers for its networks shall make a determination regarding the credentials of a health care provider within 90 days after receiving a completed provider credentialing application, including all required third-party verifications. Upon receipt of the application by the credentialing department, the health insurer or its delegate shall notify the applicant within 10 business days to verify receipt and inform the applicant whether the application is complete. The health insurer shall activate the provider upon successful approval and notify the applicant of the activation within 10 days of approval if the approval occurs prior to the end of the 90-day timeline. The 90-day timeline shall apply only to the credentialing process and does not include contracting completion. If the health insurer or its delegate does not meet the 90-day requirement, the applicant’s credentials shall be provisionally approved for 120 days unless any of the following apply: (a) The applicant is subject to discipline by the licensing entity for that applicant. (b) The applicant has one or more adverse action reports or one or more reports of malpractice payments filed with the National Practitioner Data Bank. (c) The applicant has not been credentialed by the health insurer in the past five years. (Added by Stats. 2025, Ch. 630, Sec. 4. (AB 1041) Effective January 1, 2026.)
  37. 10144.57.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Health insurers must cover and reimburse behavioral health crisis services, cannot require prior authorization for crisis stabilization services, and must follow fast response and billing rules for poststabilization care.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.57. (a) Coverage of mental health and substance use disorder treatment pursuant to Section 10144.5 includes behavioral health crisis services that are provided to an insured by a 988 center, mobile crisis team, or other provider of behavioral health crisis services, as set forth in Chapter 1 (commencing with Section 53123.1) of Part 1 of Division 2 of Title 5 of the Government Code, regardless of whether the service is provided by an in-network or out-of-network provider or facility. With respect to behavioral health crisis services that are provided to an insured by a 988 center or mobile crisis team, a health insurance policy shall cover, at a minimum, all items and services that are eligible for coverage under the Medi-Cal program. (b) (1) An insurer shall not require prior authorization for behavioral health crisis stabilization services and care provided by a 988 center, mobile crisis team, or other provider of behavioral health crisis services. (2) Notwithstanding any other law, payment for behavioral health crisis stabilization services and care pursuant to this section shall not be denied unless a health insurer reasonably determines that care was not rendered. (3) If its prior authorization requirements comply with Section 10144.4, a health insurer may require prior authorization for poststabilization care. If there is a disagreement between a health insurer and behavioral health crisis services provider or facility regarding the need for poststabilization care, an insurer shall assume responsibility for care of the insured by promptly arranging for care pursuant to Section 10144.5 at a level of care determined in accordance with utilization review criteria under Section 10144.52. (4) An insurer shall not require, under any circumstances, a behavioral health crisis services provider or facility to discharge or transfer an insured before stabilization has occurred or before it has conducted utilization review in accordance with Sections 10144.5 and 10144.52. (c) (1) If prior authorization is required for poststabilization care, a health insurer that is contacted by a 988 center, mobile crisis team, or other provider of behavioral health crisis services shall, within 30 minutes of the time the provider makes the initial contact, either authorize poststabilization care or inform the provider that it will arrange for the prompt transfer of the insured’s care to another provider. (2) A health insurer that is contacted by a 988 center, mobile crisis team, or other provider of behavioral health crisis services shall reimburse the provider or facility for poststabilization care rendered to the insured if any of the following occur: (A) The health insurer authorized the 988 center, mobile crisis team, or other provider of behavioral health crisis services to provide poststabilization care. (B) The health insurer did not respond to the provider’s initial contact or did not make a decision regarding whether to authorize poststabilization care or to promptly transfer the insured’s care within the timeframe set forth in paragraph (1). (C) There is an unreasonable delay in the transfer of the insured’s care to another provider, and the provider determines that the insured requires poststabilization care. (3) A health insurer shall prominently display on its internet website the specific telephone number for noncontracting providers to obtain prompt authorization for the transfer of a stabilized insured’s care to another provider or authorization to provide poststabilization care. The health insurer shall ensure the telephone number published on its internet website is the correct telephone number for purposes of this paragraph. The health insurer shall update the telephone number on its internet website within one business day if the telephone number changes. A health insurer shall provide the telephone number to the department. (4) A health insurer shall not require a 988 center, mobile crisis team, or other provider of behavioral health crisis services to make more than one telephone call to the number provided in advance by the health insurer. The representative of the 988 center, mobile crisis team, or other provider of behavioral health crisis services that makes the telephone call may be, but is not required to be, a physician or surgeon. (5) A 988 center, mobile crisis team, or other provider of behavioral health crisis services shall not bill a patient who is an insured of a health insurer for poststabilization care, except for the in-network cost-sharing amount as defined in paragraph (2) of subdivision (d). An insured who is billed in violation of this section may report receipt of the bill to the health insurer and the department. The department shall forward that report to the State Department of Public Health. (d) (1) An insurer shall reimburse a 988 center, mobile crisis team, or other provider of behavioral health crisis services for emergency or nonemergency behavioral health crisis services and care pursuant to this section, consistent with the requirements of Sections 10123.13, 10123.147, and any other applicable requirement of this part. (2) If an insured receives behavioral health crisis services and care pursuant to this section from a 988 center, mobile crisis team, or other provider of behavioral health crisis services that is an out-of-network provider, the insured shall pay no more than the same cost sharing that the insured would pay for the same items or services received from an in-network provider. This amount shall be referred to as the “in-network cost-sharing amount.” An out-of-network 988 center, mobile crisis team, or other provider of behavioral health crisis services shall not bill or collect an amount from the insured for services subject to this section except for the in-network cost-sharing amount. (e) For purposes of this section: (1) “Behavioral health crisis services” has the same meaning as set forth in Section 53123.1.5 of the Government Code. (2) “Behavioral health crisis stabilization services” means health care items and services that are necessary to determine if a behavioral health crisis exists and, if a behavioral health crisis does exist, the care and treatment that is necessary to stabilize the behavioral health crisis, within the capability of the 988 center, mobile crisis team, or other provider of behavioral health crisis services. (3) “Poststabilization care” means medically necessary care provided after a behavioral health crisis has been stabilized. (4) An insured is “stabilized” or “stabilization” has occurred when, in the opinion of the treating provider or facility, the insured’s condition is such that, within reasonable medical probability, both of the following criteria are satisfied: (A) Material deterioration of the insured’s condition is unlikely to result from, or occur during, the discharge or transfer of the insured to the care of another provider or facility. (B) The insured is able to travel safely from the site of care using nonmedical transportation or nonemergency medical transportation. The health insurer shall continue to cover all services and care as behavioral health crisis stabilization services until the insured is discharged or transferred. (f) This section does not excuse a disability insurer from complying with Section 10144.5 or any other requirement of this part. (g) This section does not apply to Medicare supplement, dental-only, or vision-only health insurance policies. (h) The commissioner may promulgate regulations subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) to implement this section, and Section 10144.4, 10144.5, 10144.51, or 10144.52 of this code. This subdivision shall not be construed to impair or restrict the commissioner’s rulemaking authority pursuant to another provision of this code or the Administrative Procedure Act. (Amended by Stats. 2023, Ch. 42, Sec. 56. (AB 118) Effective July 10, 2023.)
  38. 10144.58.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    For certain disability insurance policies, a covered disability insurer and its delegates must set up a process to reimburse providers for integrated mental health and substance use disorder treatment services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.58. For services provided to an insured under a disability insurance policy issued, amended, or renewed on or after July 1, 2025, a disability insurer subject to Section 10144.5, and its delegates, shall establish a process to reimburse providers for mental health and substance use disorder treatment services that are integrated with primary care services. A process required under this section may be based upon federal rules or guidance issued for the Medicare program. (Added by Stats. 2024, Ch. 135, Sec. 2. (SB 1320) Effective January 1, 2025.)
  39. 10144.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    A disability insurer must not use whether a beneficiary’s psychiatric inpatient admission was voluntary or involuntary to decide claim reimbursement eligibility.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10144.6. No disability insurer may utilize any information regarding whether a beneficiary’s psychiatric inpatient admission was made on a voluntary or involuntary basis for the purpose of determining eligibility for claim reimbursement. (Added by Stats. 2001, Ch. 506, Sec. 4. Effective January 1, 2002.)
  40. 10145.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    An insurer may not treat blindness or partial blindness as a reason to deny, continue denying, limit, or price life, annuity, or disability coverage differently for covered contracts issued on or after January 1, 1986.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10145. No insurer issuing, providing, or administering any contract of individual or group insurance providing life, annuity, or disability benefits applied for and issued on or after January 1, 1986, shall refuse to insure, or refuse to continue to insure, or limit the amount, extent, or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of blindness or partial blindness. “Blindness or partial blindness” means central visual acuity of not more than 20/200 in the better eye, after correction, or visual acuity greater than 20/200 but with a limitation in the fields of vision so that the widest diameter of the visual field subtends an angle no greater than 20 degrees, certified by a licensed physician and surgeon who specializes in diseases of the eye or a licensed optometrist. (Added by Stats. 1985, Ch. 971, Sec. 2.)
  41. 10145.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Certain disability insurance policies must cover an AIDS vaccine meeting federal approval and recommendation criteria, with specific exclusions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10145.2. (a) Every policy of disability insurance that is issued, amended, or renewed on or after July 1, 2002, that covers hospital, medical, or surgery expenses shall provide coverage for a vaccine for acquired immune deficiency syndrome (AIDS) that is approved for marketing by the federal Food and Drug Administration and that is recommended by the United States Public Health Service. (b) This section may not be construed to require a policy to provide coverage for any clinical trials relating to an AIDS vaccine or for any AIDS vaccine that has been approved by the federal Food and Drug Administration in the form of an investigational new drug application. (c) This section shall not apply to vision only, dental only, accident only, specified disease, hospital indemnity, Medicare supplement, CHAMPUS supplement, long-term care, or disability income insurance. For hospital indemnity, accident only, or specified disease insurance coverage, benefits under this section shall apply only to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the policy or certificate. Nothing in this section shall be construed as imposing a new benefit mandate on accident only, hospital indemnity, or specified disease insurance. (d) Nothing in this section is to be construed in any manner to limit or impede a disability insurer’s power or responsibility to negotiate the most cost-effective price for vaccine purchases. (Added by Stats. 2001, Ch. 634, Sec. 3. Effective January 1, 2002.)
  42. 10145.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Certain disability insurers must offer an external independent review for some coverage decisions about experimental or investigational therapies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10145.3. (a) Every disability insurer that covers hospital, medical, or surgical benefits shall provide an external, independent review process to examine the insurer’s coverage decisions regarding experimental or investigational therapies for individual insureds who meet all of the following criteria: (1) (A) The insured has a life-threatening or seriously debilitating condition. (B) For purposes of this section, “life-threatening” means either or both of the following: (i) Diseases or conditions where the likelihood of death is high unless the course of the disease is interrupted. (ii) Diseases or conditions with potentially fatal outcomes, where the end point of clinical intervention is survival. (C) For purposes of this section, “seriously debilitating” means diseases or conditions that cause major irreversible morbidity. (2) The insured’s physician certifies that the insured has a condition, as defined in paragraph (1), for which standard therapies have not been effective in improving the condition of the insured, for which standard therapies would not be medically appropriate for the insured, or for which there is no more beneficial standard therapy covered by the insurer than the therapy proposed pursuant to paragraph (3). (3) Either (A) the insured’s contracting physician has recommended a drug, device, procedure, or other therapy that the physician certifies in writing is likely to be more beneficial to the insured than any available standard therapies, or (B) the insured, or the insured’s physician who is a licensed, board-certified or board-eligible physician qualified to practice in the area of practice appropriate to treat the insured’s condition, has requested a therapy that, based on two documents from the medical and scientific evidence, as defined in subdivision (d), is likely to be more beneficial for the insured than any available standard therapy. The physician certification pursuant to this subdivision shall include a statement of the evidence relied upon by the physician in certifying his or her recommendation. Nothing in this subdivision shall be construed to require the insurer to pay for the services of a noncontracting physician, provided pursuant to this subdivision, that are not otherwise covered pursuant to the contract. (4) The insured has been denied coverage by the insurer for a drug, device, procedure, or other therapy recommended or requested pursuant to paragraph (3), unless coverage for the specific therapy has been excluded by the insurer’s contract. (5) The specific drug, device, procedure, or other therapy recommended pursuant to paragraph (3) would be a covered service except for the insurer’s determination that the therapy is experimental or under investigation. (b) The insurer’s decision to deny, delay, or modify experimental or investigational therapies shall be subject to the independent medical review process established under Article 3.5 (commencing with Section 10169) of Chapter 1 of Part 2 of Division 2, except that in lieu of the information specified in subdivision (b) of Section 10169.3, an independent medical reviewer shall base his or her determination on relevant medical and scientific evidence, including, but not limited to, the medical and scientific evidence defined in subdivision (d). (c) The independent medical review process shall also meet the following criteria: (1) The insurer shall notify eligible insureds in writing of the opportunity to request the external independent review within five business days of the decision to deny coverage. (2) If the insured’s physician determines that the proposed therapy would be significantly less effective if not promptly initiated, the analyses and recommendations of the experts on the panel shall be rendered within seven days of the request for expedited review. At the request of the expert, the deadline shall be extended by up to three days for a delay in providing the documents required. The timeframes specified in this paragraph shall be in addition to any otherwise applicable timeframes contained in subdivision (c) of Section 10169.3. (3) Each expert’s analysis and recommendation shall be in written form and state the reasons the requested therapy is or is not likely to be more beneficial for the insured than any available standard therapy, and the reasons that the expert recommends that the therapy should or should not be covered by the insurer, citing the insured’s specific medical condition, the relevant documents, and the relevant medical and scientific evidence, including, but not limited to, the medical and scientific evidence as defined in subdivision (d), to support the expert’s recommendation. (4) Coverage for the services required under this section shall be provided subject to the terms and conditions generally applicable to other benefits under the contract. (d) For the purposes of subdivision (b), “medical and scientific evidence” means the following sources: (1) Peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff. (2) Peer-reviewed literature, biomedical compendia and other medical literature that meet the criteria of the National Institutes of Health’s National Library of Medicine for indexing in Index Medicus, Excerpta Medicus (EMBASE), Medline and MEDLARS database of Health Services Technology Assessment Research (HSTAR). (3) Medical journals recognized by the Secretary of Health and Human Services, under Section 1861(t)(2) of the Social Security Act. (4) Either of the following reference compendia: (A) The American Hospital Formulary Service’s Drug Information. (B) The American Dental Association Accepted Dental Therapeutics. (5) Any of the following reference compendia, if recognized by the federal Centers for Medicare and Medicaid Services as part of an anticancer chemotherapeutic regimen: (A) The Elsevier Gold Standard’s Clinical Pharmacology. (B) The National Comprehensive Cancer Network Drug and Biologics Compendium. (C) The Thomson Micromedex DrugDex. (6) Findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including the Federal Agency for Health Care Policy and Research, National Institutes of Health, National Cancer Institute, National Academy of Sciences, Health Care Financing Administration, Congressional Office of Technology Assessment, and any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services. (7) Peer-reviewed abstracts accepted for presentation at major medical association meetings. (e) The independent review process established by this section shall be required on and after January 1, 2001. (Amended by Stats. 2009, Ch. 479, Sec. 4. (AB 830) Effective January 1, 2010.)
  43. 10145.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. )

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    Health insurers cannot deny or limit coverage because an insured joins an approved clinical trial, and must apply specified cost-sharing and payment rules for routine patient care costs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.5. Discriminatory Practices [10140 - 10145.4] ( Article 2.5 added by Stats. 1969, Ch. 620. ) ## 10145.4. (a) An individual or group health insurance policy that is issued, amended, or renewed on or after January 1, 2020, shall not: (1) Deny a qualified insured’s participation in an approved clinical trial. (2) Deny, limit, or impose additional conditions on the coverage of routine patient care costs for items and services furnished in connection with a qualified insured’s participation in an approved clinical trial. (3) Discriminate against an insured based on the qualified insured’s participation in an approved clinical trial. (b) (1) Subdivision (a) applies to: (A) A qualified insured participating in an approved clinical trial conducted by a participating provider. (B) A qualified insured participating in an approved clinical trial conducted by a nonparticipating provider, including a nonparticipating provider located outside this state, if the clinical trial is not offered or available through a participating provider. (2) If one or more participating providers is conducting an approved clinical trial, a health insurer may require a qualified insured to participate in the clinical trial through a participating provider if the participating provider accepts the insured as a clinical trial participant. (3) A health insurer may restrict coverage to an approved clinical trial in this state, unless the clinical trial is not offered or available through a participating provider in this state. (c) (1) The payment rate for routine patient care costs provided by a nonparticipating provider under a policy that is issued, amended, or renewed on or after January 1, 2020, shall be the negotiated rate the health insurer would otherwise pay a participating provider for the same services, less applicable cost sharing. (2) Cost sharing for routine patient care costs shall be the same as that applied to the same services not delivered in a clinical trial, except that the in-network cost sharing and out-of-pocket maximum shall apply if the clinical trial is not offered or available through a participating provider. (3) This section does not limit or modify any existing requirements under this chapter or prevent application of cost-sharing provisions in a policy, except as provided in paragraph (2). (d) For purposes of this section: (1) “Approved clinical trial” means a phase I, phase II, phase III, or phase IV clinical trial conducted in relation to the prevention, detection, or treatment of cancer or another life-threatening disease or condition that meets at least one of the following: (A) The study or investigation is approved or funded, which may include funding through in-kind donations, by one or more of the following: (i) The National Institutes of Health. (ii) The federal Centers for Disease Control and Prevention. (iii) The Agency for Healthcare Research and Quality. (iv) The federal Centers for Medicare and Medicaid Services. (v) A cooperative group or center of any of the entities described in clauses (i) to (iv), inclusive, the Department of Defense, or the United States Department of Veterans Affairs. (vi) A qualified nongovernmental research entity identified in the guidelines issued by the National Institutes of Health for center support grants. (vii) One of the following departments, if the study or investigation has been reviewed and approved through a system of peer review that the Secretary of the United States Department of Health and Human Services determines is comparable to the system of peer review used by the National Institutes of Health and ensures unbiased review of the highest scientific standards by qualified individuals who have no interest in the outcome of the review: (I) The United States Department of Veterans Affairs. (II) The United States Department of Defense. (III) The United States Department of Energy. (B) The study or investigation is conducted under an investigational new drug application reviewed by the United States Food and Drug Administration. (C) The study or investigation is a drug trial that is exempt from an investigational new drug application reviewed by the United States Food and Drug Administration. (2) “Life-threatening disease or condition” means a disease or condition from which the likelihood of death is probable, unless the course of the disease or condition is interrupted. (3) “Qualified insured” means an insured who meets both of the following conditions: (A) The insured is eligible to participate in an approved clinical trial, according to the clinical trial protocol, for the treatment of cancer or another life-threatening disease or condition. (B) Either of the following applies: (i) The referring health care professional is a participating provider and has concluded that the insured’s participation in the clinical trial would be appropriate because the insured meets the conditions of subparagraph (A). (ii) The insured provides medical and scientific information establishing that the insured’s participation in the clinical trial would be appropriate because the insured meets the conditions of subparagraph (A). (4) “Routine patient care costs” include drugs, items, devices, and services provided consistent with coverage under the policy for an insured who is not enrolled in an approved clinical trial, including the following: (A) Drugs, items, devices, and services typically covered absent a clinical trial. (B) Drugs, items, devices, and services required solely for the provision of an investigational drug, item, device, or service. (C) Drugs, items, devices, and services required for the clinically appropriate monitoring of the investigational drug, item, device, or service. (D) Drugs, items, devices, and services provided for the prevention of complications arising from the provision of the investigational drug, item, device, or service. (E) Drugs, items, devices, and services needed for the reasonable and necessary care arising from the provision of the investigational drug, item, device, or service, including diagnosis and treatment of complications. (5) “Routine patient care costs” does not include the following: (A) The investigational drug, item, device, or service itself. (B) Drugs, items, devices, and services provided solely to satisfy data collection and analysis needs that are not used in the direct clinical management of the insured. (C) Drugs, items, devices, and services specifically excluded from coverage in the policy, except for drugs, items, devices, and services required to be covered pursuant to this section or other applicable law. (D) Drugs, items, devices, and services customarily provided free of charge to a clinical trial participant by the research sponsor. (e) This section shall not be construed to limit coverage provided by a health insurance policy with respect to clinical trials. (f) The provision of services required by this section shall not, in itself, give rise to liability on the part of the health insurer. (g) This section does not apply to vision-only, dental-only, accident-only, specified disease, hospital indemnity, Medicare supplement, CHAMPUS supplement, long-term care, or disability income insurance policies, except that for specified disease and hospital indemnity insurance, coverage for benefits under this section shall apply, but only to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the policy. This section shall not be construed as imposing a new benefit mandate on specified disease or hospital indemnity insurance. (h) This section does not limit, prohibit, or modify an insured’s rights to the independent review process available under Section 10145.3 or to the Independent Medical Review System available under Article 3.5 (commencing with Section 10169). (Repealed and added by Stats. 2019, Ch. 482, Sec. 4. (SB 583) Effective January 1, 2020.)
  44. 10146.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. )

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    This section says insurers must follow standards on genetic-test-based underwriting, keep related personal information strictly confidential, and obtain informed consent before underwriting on that basis.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. ) ## 10146. The purposes of this article are to establish standards regarding unfair discrimination among individuals of the same class in the underwriting of life or disability income insurance on the basis of tests of a person’s genetic characteristics; to establish minimum standards for determining insurability which are sufficiently reliable to be used for life and disability income insurance risk classification and underwriting purposes; to require the maintenance of strict confidentiality of personal information obtained through a test of a person’s genetic characteristics; and to require informed consent before insurers underwrite on the basis of a test of a person’s genetic characteristics. This article and Sections 10140 and 10143 shall constitute the exclusive requirements for insurers’ practices relating to genetic characteristics or to tests thereof. (Added by Stats. 1994, Ch. 761, Sec. 7. Effective January 1, 1995.)
  45. 10147.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. )

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    This section defines key terms used in the article on underwriting based on genetic characteristics.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. ) ## 10147. As used in this article: (a) “Disability income insurance” means insurance against loss of occupational earning capacity arising from injury, sickness, or disablement, and includes insurance which provides benefits for overhead expenses of a business or profession when the insured becomes disabled. (b) “Genetic characteristics” means any scientifically or medically identifiable gene or chromosome, or alteration thereof, that is known to be a cause of a disease or disorder, or that is determined to be associated with a statistically increased risk of development of a disease or disorder, and that is presently not associated with any symptoms of any disease or disorder. (c) “Life or disability income insurer” means an insurer licensed to transact life insurance or disability income insurance in this state or a fraternal benefit society licensed in this state. (d) “Policy” means (1) a life insurance policy or a disability income insurance policy delivered in this state, or (2) a certificate of life insurance benefits or disability income insurance benefits, issued under a group life or disability income insurance policy and delivered in this state by a life or disability income insurer or a fraternal benefits society, regardless of the location of the group master policy. (e) “Test of a person’s genetic characteristics” means a laboratory test which is generally accepted in the scientific and medical communities for the determination of the presence or absence of genetic characteristics. (Amended by Stats. 1999, Ch. 311, Sec. 5. Effective January 1, 2000.)
  46. 10148.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. )

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    Insurers generally may not require genetic characteristic tests for insurability, and when testing is requested, the insurer must get written informed consent and follow specific notice and privacy-related rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. ) ## 10148. No insurer shall require a test for the presence of a genetic characteristic for the purpose of determining insurability other than for those policies that are contingent on review or testing for other diseases or medical conditions. In those cases, the test shall be done in accordance with the informed consent and privacy protection provisions of this article and Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1. Notwithstanding any other provision of law, this constitutes the exclusive requirements for informed consent and privacy protection for that testing. (a) An insurer that requests an applicant to take a genetic characteristic test shall obtain the applicant’s written informed consent for the test. Written informed consent shall include a description of the test to be performed, including its purpose, potential uses, and limitations, the meaning of its results, procedures for notifying the applicant of the results, and the right to confidential treatment of the results. (b) The insurer shall notify an applicant of a test result by notifying the applicant or the applicant’s designated physician. If the applicant tested has not given written consent authorizing a physician to receive the test results, the applicant shall be urged, at the time the applicant is informed of the test results, to contact a health care professional. (c) The commissioner shall develop and adopt standardized language for the informed consent disclosure form required by this section to be given to any applicant for life or disability income insurance who takes a test for a genetic characteristic. (d) A life or disability income insurer shall not require a person to undergo a test of the person’s genetic characteristics unless the cost of the test is paid by the insurer. (e) No policy shall limit benefits otherwise payable if loss is caused or contributed to by the presence or absence of genetic characteristics, except to the extent and in the same fashion as the insurer limits coverage for loss caused or contributed to by other medical conditions presenting an increased degree of risk. (f) Nothing in this chapter shall limit an insurer’s right to decline an application or enrollment request for a life or disability income insurance policy, charge a higher rate or premium for such a policy, or place a limitation on coverage under such a policy, on the basis of manifestations of any disease or disorder. (g) No discrimination shall be made in the fees or commissions of agents or brokers writing or renewing a life or disability income policy on the basis of a test of that person’s genetic characteristics. (Amended by Stats. 1998, Ch. 521, Sec. 8. Effective January 1, 1999.)
  47. 10149.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. )

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    Insurers doing underwriting under this article must follow Article 6.6, and life or disability income insurers may not require a genetic characteristic test when the results would be used to decide eligibility for certain health coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. ) ## 10149. (a) All underwriting activities undertaken by insurers pursuant to this article shall be subject to all applicable provisions of Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1. (b) No life or disability income insurer shall require a genetic characteristic test if the results of the test would be used exclusively or nonexclusively for the purpose of determining eligibility for hospital, medical, or surgical insurance coverage or eligibility for coverage under a nonprofit hospital service plan or health care service plan. (Added by Stats. 1994, Ch. 761, Sec. 7. Effective January 1, 1995.)
  48. 10149.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. )

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    This section restricts disclosure of genetic test results and sets civil and criminal penalties for improper disclosures.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.6. Underwriting on the Basis of Test of Genetic Characteristics [10146 - 10149.1] ( Article 2.6 added by Stats. 1994, Ch. 761, Sec. 7. ) ## 10149.1. (a) This section shall apply to the disclosure of the results of a test for a genetic characteristic requested by an insurer pursuant to this article. (b) Any person who negligently discloses results of a test for a genetic characteristic to any third party, in a manner which identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Sections 1603.1 and 1603.3 of the Health and Safety Code, shall be assessed a civil penalty in an amount not to exceed one thousand dollars ($1,000) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test. (c) Any person who willfully discloses the results of a test for a genetic characteristic to any third party, in a manner which identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Sections 1603.1 and 1603.3 of the Health and Safety Code, shall be assessed a civil penalty in an amount not less than one thousand dollars ($1,000) and no more than five thousand dollars ($5,000) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test. (d) Any person who willfully or negligently discloses the results of a test for a genetic characteristic to a third party, in a manner which identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Sections 1603.1 and 1603.3 of the Health and Safety Code, which results in economic, bodily, or emotional harm to the subject of the test, is guilty of a misdemeanor punishable by imprisonment in a county jail for a period not to exceed one year, by a fine of not to exceed ten thousand dollars ($10,000), or by both that fine and imprisonment. (e) Any person who commits any act described in subdivision (b) or (c) shall be liable to the subject for all actual damages, including damages for economic, bodily, or emotional harm which is proximately caused by the act. (f) Each disclosure made in violation of this section is a separate and actionable offense. (g) The applicant’s “written authorization,” as used in this section, applies only to the disclosure of test results by a person responsible for the care and treatment of the person subject to the test. Written authorization is required for each separate disclosure of the test results, and shall include to whom the disclosure would be made. (Added by Stats. 1994, Ch. 761, Sec. 7. Effective January 1, 1995.)
  49. 1015.

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

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    After a seizure, the commissioner must start a proceeding under section 1011 and continue under this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1015. Immediately after such seizure, the commissioner shall institute a proceeding as provided for in section 1011 and thereafter shall proceed in accordance with the provisions of this article. (Amended by Stats. 1935, Ch. 291.)
  50. 10150.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This article does not apply to annuities, industrial policies, or term contracts issued for 20 years or less.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10150. The provisions of this article shall not apply to annuities, industrial policies or to term contracts issued for periods of twenty years or less. (Enacted by Stats. 1935, Ch. 145.)
  51. 10150.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This article does not apply to life policies issued on or after the operative date for Article 3a, Chapter 1, Part 2, Division 2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10150.1. This article is not applicable to life policies issued on or after the operative date as to such policies of Article 3a, Chapter 1, Part 2, Division 2. (Added by Stats. 1943, Ch. 955.)
  52. 10151.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Life insurance policies meeting the section’s scope must provide a nonforfeiture option if a premium is missed after three full annual premiums have been paid.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10151. Every contract or policy of life insurance (excluding additional benefits specified therein or issued in connection therewith for accidental death or disability) hereinafter made by any person or corporation, with and upon the life of a resident of this State, and delivered within this State, shall provide, in event of default of any premium payment after three full annual premiums shall have been paid on such policy, that without any action on the part of the insured, the net value of such policy based upon the reserve basis used in computing the premiums and values thereunder (the policy to specify the mortality table and rate of interest so adopted) which net value shall be at least equal to its entire net reserve at the date of default, including that of dividend additions, if any, based upon a standard not lower than the American experience tables of mortality with interest at three and one-half per cent yearly, less a surrender charge of not more than two and one-half per cent of the face amount of the policy and of any existing dividend additions thereto and less any indebtedness to the company on or secured by the policy, shall be applied as a single premium to the purchase of one of the following stipulated forms of insurance: First. Paid-up participating or nonparticipating term insurance in the amount of the face of the policy, plus dividend additions, if any, for such a period as the net value outlined above will purchase at the net single premium, at the attained age of the insured at the time of the lapse, based upon the reserve basis described in the policy; provided, however, that under endowment contracts the term shall not extend beyond the endowment period named in the original contract, and the excess value, if any, shall be applied as a net single premium to purchase in the same manner paid-up pure endowment insurance, payable at the end of the endowment period named in the contract if the insured be then living, or, Second. Paid-up participating or nonparticipating term insurance in the amount of the face of the policy, plus dividend additions, if any, and less any outstanding indebtedness, for such a period as the net value outlined above will purchase at the net single premium, at the attained age of the insured, based upon the reserve basis described in the policy; provided, however, that under endowment contracts the term shall not extend beyond the endowment period named in the original contract, and the excess value, if any, shall be applied as a net single premium to purchase in the same manner paid-up pure endowment insurance, payable at the end of the endowment period named in the contract if the insured be then living, or Third. Paid-up participating or nonparticipating insurance payable at the time and on the conditions named in the policy for such an amount as the net value outlined above will purchase at the net single premium, at the attained age of the insured, based upon the reserve basis described in the policy. (Amended by Stats. 1939, Ch. 92.)
  53. 10152.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A policy may be surrendered to the insurer at its home office by the legal owner within one month after premium default, and the insurer may delay paying the cash value for up to six months after application.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10152. In lieu of the application of the provisions for automatic insurance upon nonpayment of premium the policy may be surrendered to the insurer at its home office, upon due application by the legal owner thereof, within one month after date of premium default for a specified cash value which shall be at least equal to the sum which would be otherwise available for the purchase of the automatic form of insurance provided therein. The insurer may defer payment of such cash value for not more than six months after application therefor is made. (Enacted by Stats. 1935, Ch. 145.)
  54. 10153.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An insurer, policy holder, or insurance applicant cannot use a contrary agreement to waive the provisions of sections 10151 and 10152.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10153. No agreement between the insurer and the policy holder or applicant for insurance contrary to the foregoing shall be held to waive any of the provisions of sections 10151 and 10152. (Enacted by Stats. 1935, Ch. 145.)
  55. 10154.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If a life policy issued to a California resident and delivered in California lacks an automatic nonforfeiture value that matches section 10151, it is treated as including the nonparticipating term insurance described in that section.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Provisions Required [10150 - 10154] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10154. Any life policy issued upon the life of a resident of this State and delivered within this State, which does not contain an automatic nonforfeiture value in conformity with section 10151 shall be construed as granting the nonparticipating term insurance as provided in paragraph first of section 10151. Such a benefit shall be read into the policy. (Enacted by Stats. 1935, Ch. 145.)
  56. 10159.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    This article applies only to policies and contracts issued on or after the article’s operative date, and it defines “operative date of the valuation manual.”

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10159.1. (a) This article is applicable only to policies and contracts issued on or after the operative date as to such policies or contracts of this article. (b) The term “operative date of the valuation manual” means the January 1 of the first calendar year that the valuation manual, as defined in Section 10489.1, is effective. (Amended by Stats. 2015, Ch. 658, Sec. 1. (SB 696) Effective January 1, 2016.)
  57. 10159.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    An insurer may file a written notice with the commissioner choosing to comply with this article for some or all policies, and that choice affects when the article becomes operative for those policies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10159.2. After December 31, 1943, any insurer may file with the commissioner a written notice of its election to comply with the provisions of this article as to any or all of its policies after a specified date before January 1, 1948. After the filing of such notice, then upon such specified date, this article shall become operative with respect to the policies specified in the notice and which are thereafter issued by such insurer. As to all of its policies with respect to which an insurer makes no such election, the operative date of this article shall be January 1, 1948. (Added by Stats. 1943, Ch. 955.)
  58. 1016.

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

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    The commissioner may ask the court to order liquidation and winding up of an insurer’s business, and the court may issue that order in specified circumstances.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1016. (a) If at any time after the issuance of an order under Section 1011, or if at the time of instituting any proceeding under this article, including under Section 1011, it shall appear to the commissioner that it would be futile to proceed as conservator with the conduct of the business of that person, he or she may apply to the court for an order to liquidate and wind up the business of the person. Upon a full hearing of that application, the court may make an order directing the winding up and liquidation of the business of that person by the commissioner, as liquidator, for the purpose of carrying out the order to liquidate and wind up the business of that person. (b) Notwithstanding subdivision (a), the court may issue an order to liquidate and wind up the business of a person as to whom a verified application is filed pursuant to subdivision (j) of Section 1011 based solely on the verified application and hearing as provided for in subdivision (a) of Section 1011.1, without further hearing, or may issue an order to liquidate and wind up the business of the person upon application by the commissioner after the issuance of an order under Section 1011. The court’s order may direct the winding up and liquidation of the business of the person by the commissioner, as liquidator, for the purpose of carrying out the order to liquidate and wind up the business of the person. (Amended by Stats. 2013, Ch. 321, Sec. 10. (AB 1391) Effective January 1, 2014.)
  59. 10160.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    Life insurance policies delivered in this state must include specified nonforfeiture provisions, unless an exception applies, and insurers must pay or provide stated surrender and paid-up benefits when the listed conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10160. Except as provided in Section 10165, no policy of life insurance shall be delivered or issued for delivery in this state unless it shall contain in substance the following provisions, or corresponding provisions which are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with Section 10164.1 of this law: (a) That, in the event of default in any premium payment after premiums have been paid for at least one full year the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of this stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. (b) That, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified. (c) That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default. (d) That, if the policy shall have become paid-up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified. (e) In the case of policies which cause, on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a schedule showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on account of or secured by the policy. At the option of the insurer such schedule may also show such values and benefits for any year or years beyond the twentieth policy year. (f) A brief and general statement of the method to be used in calculating the cash surrender value and the paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy with an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on account of or secured by the policy. Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy. (Amended by Stats. 1981, Ch. 767, Sec. 3.)
  60. 10161.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    This section sets minimum cash surrender value rules for life insurance policies, including special calculations for certain riders and family policies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10161. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by Section 10160, shall be an amount not less than the excess, if any, of the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of (a) the then present value of the adjusted premiums as defined in Sections 10163, 10163.1, and 10163.2 corresponding to premiums which would have fallen due on and after such anniversary, and (b) the amount of any indebtedness to the company on the policy. Provided, however, that for any policy issued on or after January 1, 1989, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in the first paragraph of this section shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision. Provided, further, that for any family policy issued on or after January 1, 1989, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse’s age of 71, the cash surrender value referred to in the first paragraph of this section shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse. Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by Section 10160, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the company on the policy. (Amended by Stats. 1981, Ch. 767, Sec. 4.)
  61. 10162.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    A paid-up nonforfeiture benefit must have a present value at least equal to the policy’s cash surrender value, or an equivalent required cash surrender value if none is provided.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10162. Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this article in the absence of the condition that premiums shall have been paid for at least a specified period. (Added by Stats. 1943, Ch. 955.)
  62. 10163.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    This section sets how adjusted premiums and present values must be calculated for certain life insurance policies, using specified mortality tables and interest-rate limits, with some special rules and exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10163. This section shall not apply to policies issued on or after the operative date of Section 10163.2 as defined therein. Except as provided in the third paragraph of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of (i) the then present value of the future guaranteed benefits provided for by the policy; (ii) two percent (2%) of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy; (iii) forty percent (40%) of the adjusted premium for the first policy year; (iv) twenty-five percent (25%) of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less. In applying the percentages specified in (iii) and (iv) above, no adjusted premium shall be deemed to exceed four percent (4%) of the amount of insurance or uniform amount equivalent thereto. In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of this section shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, provided, however, that in the case of a policy providing a varying amount of insurance issued on the life of a child under age 10, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age 10 were the amount provided by such policy at age 10. The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision unless such term insurance benefits are disregarded under Section 10164 shall be equal to (a) the adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (b) the adjusted premiums for such term insurance, the foregoing items (a) and (b) being calculated separately and as specified in the first two paragraphs of this section. Except as otherwise provided in Section 10163.1, all adjusted premiums and present values referred to in this article shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table; provided, however, that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated, at the option of the insurer, according to an age not more than three years younger than the actual age of the insured, and such calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest, not exceeding three and one-half percent (31/2%) per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. However, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred thirty percent (130%) of the rates of mortality according to such applicable table; and for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the commissioner. (Amended by Stats. 1981, Ch. 767, Sec. 5.)
  63. 10163.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    Insurance companies must calculate certain life insurance premiums and present values using specified mortality tables and capped interest rates, with limited exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10163.1. (a) In the case of ordinary policies issued on or after the operative date of this subdivision as defined herein, all adjusted premiums and present values referred to in this article shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided that such rate of interest shall not exceed 31/2 percent per annum except that a rate of interest not exceeding 4 percent per annum may be used for all policies issued on or after January 1, 1970, and prior to January 1, 1980, and a rate of interest not exceeding 51/2 percent per annum may be used for all such policies issued on or after January 1, 1980, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding 61/2 percent per annum may be used; provided, that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured; provided, however, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table; provided further, that for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner. On or after January 1, 1961, any company may file with the commissioner a written notice of its election to comply with the provisions of this subdivision after a specified date before January 1, 1966. After the filing of such notice, then upon such specified date (which shall be the operative date of this subdivision for such company), this subdivision shall become operative with respect to the ordinary policies thereafter issued by such company. If a company makes no such election, the operative date of this subdivision for such company shall be January 1, 1966. (b) In the case of industrial policies issued on or after the operative date of this subdivision as defined herein, all adjusted premiums and present values referred to in this article shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided that such rate of interest shall not exceed 31/2 percent per annum except that a rate of interest not exceeding 4 percent per annum may be used for all such policies issued on or after January 1, 1970, and prior to January 1, 1980, and a rate of interest not exceeding 51/2 percent per annum may be used for all such policies issued on or after January 1, 1980, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding 61/2 percent per annum may be used. Provided, however, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table. Provided, further, that for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner. After September 20, 1963, any company may file with the commissioner a written notice of its election to comply with the provisions of this subdivision after a specified date before January 1, 1968. After the filing of such notice, then upon such specified date (which shall be the operative date of this subdivision for such company), this subdivision shall become operative with respect to the industrial policies thereafter issued by such company. If a company makes no such election, the operative date of this subdivision for such company shall be January 1, 1968. This section shall not apply to ordinary or industrial policies issued on or after the operative date of Section 10163.2. (Amended by Stats. 1982, Ch. 940, Sec. 1. Effective September 13, 1982.)
  64. 10163.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

    Verify source ↗

    This section sets formulas and rules for calculating nonforfeiture premiums and related values for life insurance policies, and lets a company file notice to choose an operative date before January 1, 1989.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10163.2. (a) This section shall apply to all policies issued on or after the operative date of this section as defined herein. Except as provided in subdivision (g), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of (1) the then present value of the future guaranteed benefits provided for by the policy; (2) 1 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and (3) 125 percent of the nonforfeiture net level premium as hereinafter defined. Provided, however, that in applying the percentage specified in (3) no nonforfeiture net level premium shall be deemed to exceed 4 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this section shall be the date as of which the rated age of the insured is determined. (b) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy, divided by the present value, at the date of issue of the policy, of an annuity of 1 percent per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due. (c) In the case of policies that cause on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or that provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change. (d) Except as otherwise provided in subdivision (g), the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of (1) the sum of (A) the then present value of the then future guaranteed benefits provided for by the policy and (B) the additional expense allowance, if any, over (2) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy. (e) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (1) 1 percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (2) 125 percent of the increase, if positive, in the nonforfeiture net level premium. (f) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (1) by (2) where: (1) It equals the sum of: (A) The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of 1 percent per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and (B) The present value of the increase in future guaranteed benefits provided for by the policy, and (2) It equals the present value of an annuity of 1 percent per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due. (g) Notwithstanding any other provision of this section to the contrary, in the case of a policy issued on a substandard basis that provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis that provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis. (h) All adjusted premiums and present values referred to in this article shall for all policies of ordinary insurance be calculated on the basis of (1) the Commissioners 1980 Standard Ordinary Mortality Table or (2) at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section for policies issued in that calendar year. Provided, however, that: (1) At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this section, for policies issued in the immediately preceding calendar year. (2) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by Section 10160, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any. (3) A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values. (4) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance. (5) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables. (6) (A) For policies issued prior to the operative date of the valuation manual, any Commissioners Standard Ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners (NAIC), or its successor, that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. (B) For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the commissioner approves by regulation any Commissioners Standard Ordinary mortality table adopted by the NAIC for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. (7) (A) For policies issued prior to the operative date of the valuation manual, any Commissioners Standard Industrial mortality tables, adopted after 1980 by the NAIC, or its successor, that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. (B) For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Ordinary Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the commissioner approves by regulation any Commissioners Standard Ordinary mortality table adopted by the NAIC for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. (i) The nonforfeiture interest rate. (1) For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for the policy as defined in the Standard Valuation Law, rounded to the nearer one-fourth of 1 percent, provided, however, that the nonforfeiture interest rate shall not be less than 4 percent. (2) For policies issued on or after the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual. (j) Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form that involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form. (k) After the effective date of this section, any company may file with the commissioner a written notice of its election to comply with this section after a specified date before January 1, 1989, which shall be the operative date of this section for such company. If a company makes no such election, the operative date of this section for such company shall be January 1, 1989. (Amended by Stats. 2015, Ch. 658, Sec. 2. (SB 696) Effective January 1, 2016.)
  65. 10163.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    For certain life insurance plans, the commissioner must be satisfied that benefits are at least as favorable as the required minimums, are not misleading, and that cash surrender and paid-up nonforfeiture values are not below the required minimum values.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10163.3. In the case of any plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance that is of such a nature that minimum values cannot be determined by the methods described in Section 10160, 10161, 10162, 10163, 10163.1, or 10163.2, then: (a) The commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by Section 10160, 10161, 10162, 10163, 10163.1, or 10163.2. (b) The commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds. (c) The cash surrender values and paid-up nonforfeiture benefits provided by the plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by regulations promulgated by the commissioner. (Amended by Stats. 2004, Ch. 601, Sec. 1. Effective January 1, 2005.)
  66. 10163.35.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    A life insurance form subject to this article must be filed with the commissioner before it is marketed, issued, delivered, or used in California.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10163.35. (a) Notwithstanding any other provision of law, the form of any policy, contract, or certificate providing life insurance that is subject to this article shall be filed by the obligor under the policy, contract, or certificate with the commissioner before it is marketed, issued, delivered, or used in this state. (b) Nothing contained in this section shall be construed as requiring or providing for the prior approval by the commissioner of forms of individual life insurance policies, contracts, or certificates prior to the time the forms are marketed, issued, delivered, or used in this state. (Added by Stats. 2004, Ch. 601, Sec. 2. Effective January 1, 2005.)
  67. 10164.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    This section says how certain life-insurance values must be calculated and which additional benefits must be ignored for nonforfeiture and cash-surrender-value calculations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10164. Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in Sections 10161, 10162, 10163, 10163.1, and 10163.2 may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. Notwithstanding the provisions of Section 10161, additional benefits payable (a) in the event of death or dismemberment by accident or accidental means, (b) in the event of total and permanent disability, (c) as reversionary annuity or deferred reversionary annuity benefits, (d) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this article would not apply, (e) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child’s age is 26, is uniform in amount after the child’s age is one, and has not become paid up by reason of the death of a parent of the child, and (f) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this article, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits. (Amended by Stats. 1981, Ch. 767, Sec. 9.)
  68. 10164.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    This section sets formulas and limits for cash surrender values and nonforfeiture factors in certain life insurance policies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10164.1. This section shall apply to all policies issued on or after January 1, 1986. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of 1 percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of (a) the greater of zero and the basic cash value hereinafter specified and (b) the present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy. The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary. Provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in Section 10161 or 10163 whichever is applicable, shall be the same as are the effects specified in Section 10161 or 10163 whichever is applicable, on the cash surrender values defined in that section. The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in Section 10163 or 10163.2 whichever is applicable. Except as is required by the next succeeding sentence of this paragraph, such percentage: (a) Shall be the same percentage for each policy year between the second policy anniversary and the later of (i) the fifth policy anniversary and (ii) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of 1 percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. (b) Must be such that no percentage after the later of the two policy anniversaries specified in subdivision (a) may apply to fewer than five consecutive policy years. Provided, that no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in Section 10163 or 10163.2 whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value. All adjusted premiums and present values referred to in this section shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy’s compliance with the other sections of this article. The cash surrender values shall include any endowment benefits provided for by the policy. Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in Sections 10160, 10161, 10162, 10163.2, and 10164. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as items (a) through (f) in Section 10164 shall conform with the principles of this section. (Added by Stats. 1981, Ch. 767, Sec. 10.)
  69. 10164.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

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    When an individual life insurance policy is surrendered, the insurer must pay all money due within 45 days after the surrender becomes effective.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10164.2. (a) For a policy of individual life insurance that is surrendered by the policy owner, the insurer shall return to the owner all moneys due in relation to that policy as expeditiously as possible, but in no event more than 45 days from the date the surrender is effective as provided in subdivision (b). However, this section does not supersede the provisions of subdivision (f) of Section 10160 empowering an insurer to defer payment of cash surrender value for up to six months, to the extent that deferral is necessary to assure the solvency of the insurer. (b) Unless a later date permitted by the policy, but not later than 45 days after the request is received, is requested by the policy owner, a surrender of a life insurance policy is effective on the date the request is received, if the request is made to the insurer or servicing agent authorized by the insurer in writing to receive these requests on the insurer’s behalf and contains the elements specified by the insurer in the contract. The insurer may require the request be in writing. The insurer may require some or all of the following elements, but shall not require more: (1) A statement that makes it clear that the policy owner intends to surrender, in whole or in part, the contract in question. (2) The policy number of the policy to be surrendered. (3) The name of the insured on the policy to be surrendered. (4) The signature of the owner of the policy and, if required by the policy or by a legally binding document of which the insurer has actual notice, the signature of a collateral assignee, irrevocable beneficiary, or other person having an interest in the policy through the legally binding document. (5) Either the policy itself, or, in lieu of the policy, a statement that the policy has been lost or destroyed. (c) When the policy owner requests of an insurer or servicing agent information about surrendering a policy, the insurer or servicing agent shall provide, as expeditiously as possible, a written notice setting forth either the requirements of this section or the insurer’s requirements, if less. (d) A policy subject to this section issued on or after January 1, 1997, shall either include language that may be included by endorsement, or be accompanied by a notice setting forth the elements necessary to surrender the policy as required by this section or by the insurer, if less. (e) Nothing in this section shall be construed to limit an existing statutory right to return a policy for surrender, nor shall it limit a contractual provision that provides a greater right or option to the policy owner. (f) For a written request, for purposes of this section, “received” means the first day that the written notice is delivered to the address of the insurer or servicing agent authorized by the insurer in writing to receive these requests on the insurer’s behalf. An insurer or servicing agent shall maintain a procedure for ensuring that requests for surrender are logged or stamped on the date received, and not on a later date due to the insurer’s or servicing agent’s internal routing or delivery procedures. If this procedure is not maintained, it shall be conclusively presumed that a request was received on the delivery date shown on an express, certified, or registered mail receipt form of the United States Postal Service or by a commercial carrier, if delivered by commercial carrier, or the earlier of (1) two business days after the request was postmarked by the United States Postal Service or (2) one business day before the date stamped received by the insurer or servicing agent. For purposes of this subdivision, “business day” has the meaning set forth in subdivision (b) of Section 1215. Postmarks generated by postage meters not located at an office of the United States Postal Service are to be disregarded. (g) This section does not alter a contractual provision governing calculation of cash or surrender or other values. The effective date established by subdivision (b) is intended to establish a date certain on which a policyholder may rely in determining when the 45-day period specified in subdivision (a) begins to run. Subdivision (b) is not intended to advance a date otherwise provided by contract that is triggered by a request to surrender. An insurer may request information in addition to that listed in subdivision (b). However, an insurer’s request for additional information does not delay an effective date established by a policyholder’s compliance with subdivision (b). (Amended by Stats. 2017, Ch. 417, Sec. 27. (AB 1696) Effective January 1, 2018.)
  70. 10165.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

    Verify source ↗

    This article does not apply to several listed kinds of life insurance and related contracts, including reinsurance, group insurance, annuities, certain short-term term policies, some low-cash-value policies, and policies delivered outside this state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10165. This article shall not apply to any of the following: (a) Reinsurance. (b) Group insurance. (c) Pure endowment. (d) Annuity or reversionary annuity contract. (e) Term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy. (f) Term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in Sections 10163, 10163.1, and 10163.2, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy. (g) A policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specifed in Sections 10161, 10162, 10163, 10163.1, and 10163.2, exceeds 21/2 percent of the amount of insurance at the beginning of the same policy year, nor (h) A policy which shall be delivered outside this state through an agent or other representative of the company issuing the policy. For purposes of determining the applicability of this article, the age at expiry for a joint-term life insurance policy shall be the age at expiry of the oldest life. (Amended by Stats. 1981, Ch. 767, Sec. 11.)
  71. 10166.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

    Verify source ↗

    An agreement between the insurer and the policyholder or applicant cannot waive any part of this article if it is contrary to the article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10166. No agreement between the insurer and the policyholder or applicant for insurance contrary to this article shall be held to waive any of the provisions of this article. (Added by Stats. 1943, Ch. 955.)
  72. 10167.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

    Verify source ↗

    A policy covered by this article that lacks a paid-up nonforfeiture benefit is treated as providing nonparticipating paid-up term insurance as that benefit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10167. Any policy to which this article is applicable which does not contain a paid-up nonforfeiture benefit shall be construed as granting nonparticipating paid-up term insurance as a nonforfeiture benefit under subdivision (a) Section 10160. (Added by Stats. 1943, Ch. 955.)
  73. 10167.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. )

    Verify source ↗

    A life insurer must notify the policyowner when it implements a nonforfeiture benefit for a defaulting policyowner, and the notice must be written and mailed to the policyowner’s last known address.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Nonforfeiture Law for Life Insurance [10159.1 - 10167.5] ( Heading of Article 3a amended by Stats. 1983, Ch. 101, Sec. 147. ) ## 10167.5. (a) Whenever a nonforfeiture benefit is implemented by a life insurer in connection with a defaulting policyowner, the insurer shall provide a notice to the policyowner which explains that action and refers the policyowner to the other available options, if any, under the provisions of the policy. (b) For purposes of this section, any notice to a policyholder shall be in writing and shall be mailed to the last known address of the policyowner shown on the records of the insurer. (c) This section does not apply to any of the following: (1) Reinsurance. (2) Group insurance. (3) Pure endowment. (4) Annuity or reversionary annuity contract. (5) Industrial insurance. (Added by Stats. 1990, Ch. 670, Sec. 1.)
  74. 10168.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    This section says the article does not apply to several specified annuities and related contracts, including certain retirement-plan annuities and contracts delivered outside the state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168. This article shall not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract. (Added by Stats. 1979, Ch. 1093.)
  75. 10168.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    Annuity contracts issued on or after the operative date must include certain nonforfeiture provisions, including paid-up annuity and cash surrender benefits; the company may also seek approval to defer cash surrender payments for up to six months.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.1. In the case of contracts issued on or after the operative date of this article as defined in Section 10168.10, no contract of annuity, except as stated in Section 10168, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the commissioner are at least as favorable to the contractholder, upon cessation of payment of considerations under the contract. (a) That upon cessation of payment of considerations under a contract, or upon the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of the value specified in Sections 10168.3, 10168.4, 10168.5, 10168.6, and 10168.8. (b) If a contract provides for a lump-sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit in the amount specified in Sections 10168.3, 10168.4, 10168.6, and 10168.8. The company may, after making written request and receiving the written approval of the commissioner, reserve the right to defer the payment of the cash surrender benefit for a period not to exceed six months after demand therefor with surrender of the contract. The request shall address the necessity and equitability to all policyholders of the deferral. (c) A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of those benefits. (d) A statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered, and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract, or any prior withdrawals from or partial surrenders of the contract. Notwithstanding the requirements of this section, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to that period would be less than twenty dollars ($20) monthly, the company may at its option terminate the contract by payment in cash of the then present value of that portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and the interest rate specified in the contract for determining the paid-up annuity benefit, and by that payment shall be relieved of any further obligation under the contract. (Amended by Stats. 2003, Ch. 381, Sec. 1. Effective January 1, 2004.)
  76. 10168.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    A company may file a written notice with the commissioner to choose when this article starts applying to its later-issued annuity contracts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.10. After the effective date of this article, any company may file with the commissioner a written notice of its election to comply with the provisions of this article after a specified date before the second anniversary of the effective date of this article. After the filing of such notice, then upon such specified date, which shall be the operative date of this article for such company, this article shall become operative with respect to annuity contracts thereafter issued by such company. If a company makes no such election, the operative date of this article for such company shall be the second anniversary of the effective date of this article. (Added by Stats. 1979, Ch. 1093.)
  77. 10168.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    This section sets how minimum nonforfeiture values are calculated for individual deferred annuity contracts and limits which contracts it applies to.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.2. (a) This section shall apply to contracts issued before January 1, 2004, and may be applied by a company, on a contract-form-by-contract-form basis, to any contract issued on or after January 1, 2004, and before January 1, 2006. This section shall not apply to any contract issued on or after January 1, 2006. (b) The minimum values as specified in Sections 10168.3, 10168.4, 10168.5, 10168.6, and 10168.8 of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this section. (c) With respect to contracts providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time at a rate of interest of 3 percent per annum of percentages of the net considerations (as hereinafter defined) paid prior to that time, decreased by the sum of (i) any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of 3 percent per annum and (ii) the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount not less than zero and shall be equal to the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of thirty dollars ($30) and less a collection charge of one dollar and twenty-five cents ($1.25) per consideration credited to the contract during that contract year. The percentages of net considerations shall be 65 percent of the net consideration for the first contract year and 871/2 percent of the net considerations for the second and later contract years. Notwithstanding the provisions of the preceding sentence, the percentage shall be 65 percent of the portion of the total net consideration for any renewal contract year which exceeds by not more than two times the sum of those portions of the net considerations in all prior contract years for which the percentage was 65 percent. (d) With respect to contracts providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations which are paid annually with two exceptions: (1) The portion of the net consideration for the first contract year to be accumulated shall be the sum of 65 percent of the net consideration for the first contract year plus 221/2 percent of the excess of the net consideration for the first contract year over the lesser of the net considerations for the second and third contract years. (2) The annual contract charge shall be the lesser of thirty dollars ($30) or 10 percent of the gross annual consideration. (e) With respect to contracts providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to 90 percent and the net consideration shall be the gross consideration less a contract charge of seventy-five dollars ($75). (Amended by Stats. 2003, Ch. 381, Sec. 2. Effective January 1, 2004.)
  78. 10168.25.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    This section sets how minimum nonforfeiture values are calculated for individual deferred annuities and gives the commissioner power to review or limit an added equity-indexed reduction.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.25. (a) This section shall apply to contracts issued on and after January 1, 2006, and may be applied by a company, on a contract-form-by-contract-form basis, to any contract issued on or after January 1, 2004, and before January 1, 2006. (b) The minimum values as specified in Sections 10168.3, 10168.4, 10168.5, 10168.6, and 10168.8 of any paid-up annuity, cash surrender, or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this section. (c) (1) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time, at the rates of interest indicated in subdivision (d), of the net considerations (as hereafter defined) paid prior to that time, decreased by the sum of all of the following: (A) Any prior withdrawals from or partial surrenders of the contract, accumulated at the rates of interest indicated in subdivision (d). (B) An annual contract charge of fifty dollars ($50), accumulated at the rates of interest indicated in subdivision (d). (C) Any state premium tax paid by the company for the contract, accumulated at the rates of interest indicated in subdivision (d). However, the minimum nonforfeiture amount may not be decreased by this amount if the premium tax is subsequently credited back to the company. (D) The amount of any indebtedness to the company on the contract, including interest due and accrued. (2) The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to 87.5 percent of the gross considerations credited to the contract during that contract year. (d) The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as the lesser of 3 percent per annum and the following, which shall be specified in the contract if the interest rate will be reset: (1) The five-year Constant Maturity Treasury Rate reported by the Federal Reserve as of a date, or averaged over a period, rounded to the nearest one-twentieth of 1 percent, specified in the contract no longer than 15 months prior to the contract issue date or redetermination date under paragraph (2), reduced by 125 basis points, if, for contracts issued before January 1, 2022, the resulting rate is not less than 1 percent or 100 basis points, and, for contracts issued on or after January 1, 2022, the resulting rate is not less than 0.15 percent or 15 basis points. (2) The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis, and period, if any, shall be stated in the contract. The basis is the date, or average over a specified period, that produces the value of the five-year Constant Maturity Treasury Rate to be used at each redetermination date. (e) During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in paragraph (1) of subdivision (d) by up to an additional 100 basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The commissioner may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking a demonstration that is acceptable to the commissioner, the commissioner may disallow or limit the additional reduction. (f) The commissioner may adopt regulations to implement the provisions of subdivision (e) and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts with respect to which the commissioner determines adjustments are justified. (Amended by Stats. 2021, Ch. 627, Sec. 12. (AB 1511) Effective January 1, 2022.)
  79. 10168.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    Any paid-up annuity benefit under a contract must have a present value at least equal to the minimum nonforfeiture amount when annuity payments begin.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.3. Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Such present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract. (Added by Stats. 1979, Ch. 1093.)
  80. 10168.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    Contracts offering cash surrender benefits must follow specific minimum-value rules for surrender benefits and death benefits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.4. Contracts that provide cash surrender benefits shall comply with all of the following: (a) Cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued on the indebtedness, and increased by any existing additional amounts credited by the company to the contract. (b) For purposes of subdivision (a), the present value shall be calculated on the basis of an interest rate that is not more than 1 percent higher than the interest rate specified in the contract for accumulating the net considerations to determine the maturity value. (c) The cash surrender benefit shall not be less than the minimum nonforfeiture amount at the time of the surrender. (d) (1) Except as otherwise provided in paragraph (2), the death benefit shall be at least equal to the cash surrender benefit. (2) For contracts issued or delivered on or after January 1, 2016, to persons who are 65 years of age or older, the death benefit shall be at least equal to the annuity value or accumulation value, excluding any surrender charges or penalties upon death. (Repealed and added by Stats. 2015, Ch. 100, Sec. 2. (SB 426) Effective January 1, 2016.)
  81. 10168.45.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

    Verify source ↗

    This section sets rules for how insurers must process surrender requests for certain individual annuity contracts, including payment timing, allowed request requirements, and notices.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.45. (a) (1) For an individual annuity contract subject to this article that is surrendered by the contract owner, the insurer shall return to the owner all moneys due in relation to that contract as expeditiously as possible but not later than 45 days from the date the surrender is effective as provided in subdivision (b). (2) An insurer may defer payment of cash surrender value for up to six months if the approval described in subdivision (b) of Section 10168.1 has been received by the insurer. (b) (1) (A) A surrender of a contract is effective on the date the request is received if the request is made to the insurer, or servicing agent authorized by the insurer in writing to receive requests for surrender on the insurer’s behalf, and contains the elements specified by the insurer in the contract. (B) The effective date of the surrender of a contract may be up to 45 days after the request for surrender is received if it is permitted by the contract and requested by the contract owner. (2) The insurer may require the request for surrender to be in writing. (3) The elements the insurer may require as part of the request for surrender are limited to the following: (A) A statement that makes it clear that the contract owner intends to surrender, in whole or in part, the contract in question. (B) The contract number of the contract to be surrendered. (C) The name, address, and telephone number of the contract owner on the contract to be surrendered. (D) A clear method of delivery and payee instructions for payment of the surrender value. (E) For partial surrender, the withdrawal amount, including requested beginning date, frequency, and maximum annual withdrawal amount, and instructions on subaccount withdrawals. (F) Instructions for tax withholding. (G) The signature of the owner of the contract, which may be either a wet signature or an electronic signature at the insurer’s discretion, and if required by the contract or by a legally binding document that the insurer has actual notice of, the signature of a collateral assignee, irrevocable beneficiary, or other person having an interest in the contract through the legally binding document. (H) Either the contract itself, or, in lieu of the contract, a statement that the contract has been lost or destroyed. (4) The insurer may require the contract owner to complete an administrative form as part of the surrender process. The insurer’s administrative form may only request information required to complete the surrender transaction, as set forth in paragraph (3). An administrative form shall be sent or mailed to the contract owner within two business days of the request, and shall be available for the contract owner to access on the insurer’s Internet Web site if the contract owner accesses his or her account information through the insurer’s Internet Web site. The insurer’s requirement to complete an administrative form shall not further the effective date of the surrender or extend the 45-day period in which the surrender is required to be processed. (A) The administrative form shall be designed to provide the insurer with the information needed to complete the surrender transaction consistent with the contract owner’s request. (B) If the insurer requires an administrative form and the contract owner completes and submits that form within 14 days of the surrender request, the insurer shall return all moneys due as expeditiously as possible but not later than 30 days from the effective date of the surrender. (c) When the contract owner requests information about surrendering a contract from the insurer or servicing agent, the insurer or servicing agent shall provide, upon request, as expeditiously as possible, a written notice setting forth either the requirements of this section or the insurer’s requirements. (d) A contract subject to this section shall do either of the following: (1) Include language, which may be included by endorsement, setting forth the permitted requirements for surrender described in this section. Alternatively, if the insurer requires only some of the elements permitted in paragraph (3) of subdivision (b) for a surrender request, the contract language may exclude any of the elements in paragraph (3) of subdivision (b) that the insurer does not require to process the surrender. (2) Be accompanied by a notice setting forth the permitted requirements for a surrender described in this section. Alternatively, if the insurer requires only some of the elements permitted in paragraph (3) of subdivision (b) for a surrender request, the notice may exclude any of the elements in paragraph (3) of subdivision (b) that the insurer does not require to process the surrender. (e) (1) For a written request and for purposes of this section, “received” means the first day that the written notice is delivered to the address of the insurer or servicing agent authorized by the insurer in writing to receive requests for surrender on the insurer’s behalf. (2) (A) An insurer or servicing agent shall maintain a procedure for ensuring that requests for surrender are logged or stamped on the date received and not on a later date due to the insurer’s or servicing agent’s internal routing or delivery procedures. (B) If the procedure required pursuant to subparagraph (A) is not maintained, it shall be conclusively presumed that a request was received on the earliest of the following: (i) The delivery date shown on an express, certified, or registered mail receipt form of the United States Postal Service or by a commercial carrier. (ii) Two business days after the request was postmarked by the United States Postal Service. (iii) One business day before the date stamped received by the insurer or servicing agent. (C) For purposes of this paragraph, “business day” has the meaning set forth in subdivision (b) of Section 1215. (D) Postmarks generated by postage meters not located at an office of the United States Postal Service are to be disregarded. (f) (1) This section does not alter a contractual provision governing calculation of cash or surrender or other values, unless that contractual provision applies a valuation date other than the effective date of surrender described in subdivision (b) to the calculation of cash or surrender or other values. (2) The effective date established by subdivision (b) is intended to establish a date certain on which a contract owner may rely in determining when the 45-day period specified in subdivision (a) begins to run and a date certain for the insurer to use for the valuation of the contract. (3) Notwithstanding paragraph (3) of subdivision (b), an insurer may request information that is reasonably necessary to process the surrender in addition to that listed in subdivision (b). An insurer’s request for additional information does not delay an effective date established by a contract owner’s compliance with subdivision (b). (4) An insurer may request a signature guarantee if there is reason to believe a fraudulent situation may occur. (g) This section shall only apply to contracts issued on or after January 1, 2019. (Amended by Stats. 2018, Ch. 231, Sec. 14. (AB 2045) Effective January 1, 2019.)
  82. 10168.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    For certain deferred annuity contracts, the paid-up annuity benefit’s present value must not fall below the minimum nonforfeiture amount.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.5. For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, such present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event shall the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time. (Added by Stats. 1979, Ch. 1093.)
  83. 10168.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    This section sets how to treat the maturity date of certain annuity contracts when calculating benefits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.6. For the purpose of determining the benefits calculated under Sections 10168.4 and 10168.5, the following apply: (a) In the case of annuity contracts under which the fixed maturity date is later than the later of the anniversary of the contract next following the annuitant’s 70th birthday or the 10th anniversary of the contract, the maturity date shall be deemed to be the later of the anniversary of the contract next following the annuitant’s 70th birthday or the 10th anniversary of the contract. (b) In the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract, but shall not be deemed to be later than the anniversary of the contract next following the annuitant’s seventieth birthday or the tenth anniversary of the contract, whichever is later. (Amended by Stats. 2016, Ch. 304, Sec. 11. (AB 2884) Effective January 1, 2017.)
  84. 10168.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    Certain annuity contracts must prominently state when cash surrender benefits or specified death benefits are not provided.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.7. Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided. (Added by Stats. 1979, Ch. 1093.)
  85. 10168.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    For certain individual deferred annuity contracts, paid-up annuity, cash surrender, or death benefits must be calculated with allowance for elapsed time and later scheduled payments.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.8. Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs. (Added by Stats. 1979, Ch. 1093.)
  86. 10168.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    For contracts that include both annuity benefits and life insurance benefits in the same contract, the minimum nonforfeiture benefits are calculated by adding the annuity portion and the life insurance portion separately.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.9. For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of Sections 10168.3, 10168.4, 10168.5, 10168.6, and 10168.8, additional benefits payable (a) in the event of total and permanent disability, (b) as reversionary annuity or deferred reversionary annuity benefits, or (c) as other policy benefits additional to life insurance, endowment, and annuity benefits, and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits that may be required by this article. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless such additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits. (Added by Stats. 1979, Ch. 1093.)
  87. 10168.92.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    The commissioner may adopt regulations to carry out this article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.92. The commissioner may adopt regulations to implement the provisions of this article. (Added by Stats. 2003, Ch. 381, Sec. 4. Effective January 1, 2004.)
  88. 10168.93.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. )

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    The obligor must file the form of any covered annuity contract with the commissioner before the contract is marketed, issued, delivered, or used in this state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3b. Standard Nonforfeiture Law for Individual Deferred Annuities [10168 - 10168.10] ( Article 3b added by Stats. 1979, Ch. 1093. ) ## 10168.93. (a) Notwithstanding any other provision of law, the form of any annuity contract that is subject to this article shall be filed by the obligor under the contract with the commissioner before it is marketed, issued, delivered, or used in this state. (b) Nothing contained in this section shall be construed as requiring or providing for the prior approval by the commissioner of forms of individual annuity contracts prior to the time the forms are marketed, issued, delivered, or used in this state. (Added by Stats. 2004, Ch. 601, Sec. 3. Effective January 1, 2005.)
  89. 10169.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. )

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    This section creates the Independent Medical Review System and sets rules for when insureds can seek review of denied, modified, or delayed health care services based on medical necessity.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. ) ## 10169. (a) Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System. (b) For the purposes of this chapter, “disputed health care service” means any health care service eligible for coverage and payment under a disability insurance contract that has been denied, modified, or delayed by a decision of the insurer, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a group or individual policy of vision- or dental-only coverage, except to the extent that (1) the service involves the practice of medicine, or (2) is provided pursuant to a contract with a disability insurer that covers hospital, medical, or surgical benefits. If an insurer, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the statement of decision shall clearly specify the provision in the contract that excludes that coverage. (c) For the purposes of this chapter, “coverage decision” means the approval or denial of health care services by a disability insurer, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the disability insurance contract. A coverage decision does not encompass a disability insurer or contracting provider decision regarding a disputed health care service. (d) (1) All insured grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an insured grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the insured request for review shall be treated as a request for the department to review the grievance. All other insured grievances, including grievances involving coverage decisions, remain eligible for review by the department. (2) In any case in which an insured or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article. (3) The department shall be the final arbiter when there is a question as to whether an insured grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an insured grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article. (e) Every disability insurance contract that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an insured with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the insurer, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an insured may designate an agent to act on his or her behalf. The provider may join with or otherwise assist the insured in seeking an independent medical review, and may advocate on behalf of the insured. (f) Medicare beneficiaries enrolled in Medicare + Choice products shall not be excluded unless expressly preempted by federal law. (g) The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare program, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon insureds under this chapter. (h) The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available. (i) Every disability insurer shall prominently display in every insurer member handbook or relevant informational brochure, in every insurance contract, on insured evidence of coverage forms, on copies of insurer procedures for resolving grievances, on letters of denials issued by either the insurer or its contracting organization, and on all written responses to grievances, information concerning the right of an insured to request an independent medical review when the insured believes that health care services have been improperly denied, modified, or delayed by the insurer, or by one of its contracting providers. The department’s telephone number, 1-800-927-4357, and Internet Web site, www.insurance.ca.gov, shall also be displayed. (j) An insured may apply to the department for an independent medical review when all of the following conditions are met: (1) (A) The insured’s provider has recommended a health care service as medically necessary, or (B) The insured has received urgent care or emergency services that a provider determined was medically necessary, or (C) The insured, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by a contracting provider for the diagnosis or treatment of the medical condition for which the insured seeks independent review. The insurer shall expedite access to a contracting provider upon request of an insured. The contracting provider need not recommend the disputed health care service as a condition for the insured to be eligible for an independent review. For purposes of this article, the insured’s provider may be a noncontracting provider. However, the insurer shall have no liability for payment of services provided by a noncontracting provider, except as provided pursuant to Section 10169.3. (2) The disputed health care service has been denied, modified, or delayed by the insurer, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary. (3) The insured has filed a grievance with the insurer or its contracting provider, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The insured shall not be required to participate in the insurer’s grievance process for more than 30 days. In the case of a grievance that requires expedited review, the insured shall not be required to participate in the insurer’s grievance process for more than three days. (k) An insured may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six months of any of the qualifying periods or events under subdivision (j). The commissioner may extend the application deadline beyond six months if the circumstances of a case warrant the extension. (l) The insured shall pay no application or processing fees of any kind. (m) As part of its notification to the insured regarding a disposition of the insured’s grievance that denies, modifies, or delays health care services, the insurer shall provide the insured with a one- or two-page application form approved by the department, and an addressed envelope, which the insured may return to initiate an independent medical review. The insurer shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the insured’s diagnosis or condition, the nature of the disputed health care service sought by the insured, a means to identify the insured’s case, and any other material information. The form shall also include the following: (1) Notice that a decision not to participate in the independent review process may cause the insured to forfeit any statutory right to pursue legal action against the insurer regarding the disputed health care service. (2) A statement indicating the insured’s consent to obtain any necessary medical records from the insurer, any of its contracting providers, and any noncontracting provider the insured may have consulted on the matter, to be signed by the insured. (3) Notice of the insured’s right to provide information or documentation, either directly or through the insured’s provider, regarding any of the following: (A) A provider recommendation indicating that the disputed health care service is medically necessary for the insured’s medical condition. (B) Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the insured’s medical condition. (C) Reasonable information supporting the insured’s position that the disputed health care service is or was medically necessary for the insured’s medical condition, including all information provided to the insured by the insurer or any of its contracting providers, still in the possession of the insured, concerning an insurer or provider decision regarding disputed health care services, and a copy of any materials the insured submitted to the insurer, still in the possession of the insured, in support of the grievance, as well as any additional material that the insured believes is relevant. (4) A section designed to collect information on the insured’s ethnicity, race, and primary language spoken that includes both of the following: (A) A statement of intent indicating that the information is used for statistics only, in order to ensure that all insureds get the best care possible. (B) A statement indicating that providing this information is optional and will not affect the independent medical review process in any way. (n) Upon notice from the department that the insured has applied for an independent medical review, the insurer or its contracting providers, shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the insurer’s receipt of the department’s notice of a request by an insured for an independent review: (1) (A) A copy of all of the insured’s medical records in the possession of the insurer or its contracting providers relevant to each of the following: (i) The insured’s medical condition. (ii) The health care services being provided by the insurer and its contracting providers for the condition. (iii) The disputed health care services requested by the insured for the condition. (B) Any newly developed or discovered relevant medical records in the possession of the insurer or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The insurer shall concurrently provide a copy of medical records required by this subparagraph to the insured or the insured’s provider, if authorized by the insured, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws. (2) A copy of all information provided to the insured by the insurer and any of its contracting providers concerning insurer and provider decisions regarding the insured’s condition and care, and a copy of any materials the insured or the insured’s provider submitted to the insurer and to the insurer’s contracting providers in support of the insured’s request for disputed health care services. This documentation shall include the written response to the insured’s grievance. The confidentiality of any insured medical information shall be maintained pursuant to applicable state and federal laws. (3) A copy of any other relevant documents or information used by the insurer or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the insurer and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The insurer shall concurrently provide a copy of documents required by this paragraph, except for any information found by the commissioner to be legally privileged information, to the insured and the insured’s provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the commissioner to be the proprietary information of the insurer. (o) This section shall become operative on January 1, 2017. (Amended (as added by Stats. 2015, Ch. 348, Sec. 19) by Stats. 2016, Ch. 86, Sec. 206. (SB 1171) Effective January 1, 2017.)
  90. 10169.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. )

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    This section sets deadlines and roles for independent medical review requests, including department review, insurer notice, and limits on what the review organization may consider.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. ) ## 10169.1. (a) If there is an imminent and serious threat to the health of the insured, as specified in subdivision (c) of Section 10169.3, all necessary information and documents shall be delivered to an independent medical review organization within 24 hours of approval of the request for review. In reviewing a request for review, the department may waive the requirement that the insured follow the insurer’s grievance process in extraordinary and compelling cases, where the commissioner finds that the insured has acted reasonably. (b) The department shall expeditiously review requests and immediately notify the insured in writing as to whether the request for an independent medical review has been approved, in whole or in part, and, if not approved, the reasons therefor. The insurer shall promptly issue a notification to the insured, after submitting all of the required material to the independent medical review organization, that includes an annotated list of documents submitted and offer the insured the opportunity to request copies of those documents from the insurer. The department shall promptly approve insured requests whenever the insurer has agreed that the case is eligible for an independent medical review. The department shall not refer coverage decisions for independent review. To the extent an insured request for independent review is not approved by the department, the insured request shall be treated as an immediate request for the department to review the grievance. (c) An independent medical review organization, specified in Section 10169.2, shall conduct the review in accordance with Section 10169.3 and any regulations or orders of the commissioner adopted pursuant thereto. The organization’s review shall be limited to an examination of the medical necessity of the disputed health care services and shall not include any consideration of coverage decisions or other contractual issues. (Added by Stats. 1999, Ch. 533, Sec. 2. Effective January 1, 2000.)
  91. 10169.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. )

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    The department must contract with independent medical review organizations, and those organizations must be independent from disability insurers and meet conflict-of-interest and reporting requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. ) ## 10169.2. (a) The department shall contract with one or more independent medical review organizations in the state to conduct reviews for purposes of this article. The independent medical review organizations shall be independent of any disability insurer doing business in this state. The commissioner may establish additional requirements, including conflict-of-interest standards, consistent with the purposes of this article, that an organization shall be required to meet in order to qualify for participation in the Independent Medical Review System and to assist the department in carrying out its responsibilities. (b) The independent medical review organizations and the medical professionals retained to conduct reviews shall be deemed to be medical consultants for purposes of Section 43.98 of the Civil Code. (c) The independent medical review organization, any experts it designates to conduct a review, or any officer, director, or employee of the independent medical review organization shall not have any material professional, familial, or financial affiliation, as determined by the commissioner, with any of the following: (1) The insurer. (2) Any officer, director, or employee of the insurer. (3) A physician, the physician’s medical group, or the independent practice association involved in the health care service in dispute. (4) The facility or institution at which either the proposed health care service, or the alternative service, if any, recommended by the insurer, would be provided. (5) The development or manufacture of the principal drug, device, procedure, or other therapy proposed by the insured whose treatment is under review, or the alternative therapy, if any, recommended by the insurer. (6) The insured or the insured’s immediate family. (d) In order to contract with the department for purposes of this article, an independent medical review organization shall meet all of the following requirements: (1) The organization shall not be an affiliate or a subsidiary of, nor in any way be owned or controlled by, a disability insurer or a trade association of insurers. A board member, director, officer, or employee of the independent medical review organization shall not serve as a board member, director, or employee of a disability insurer. A board member, director, or officer of a disability insurer or a trade association of insurers shall not serve as a board member, director, officer, or employee of an independent medical review organization. (2) The organization shall submit to the department the following information upon initial application to contract for purposes of this article and, except as otherwise provided, annually thereafter upon any change to any of the following information: (A) The names of all stockholders and owners of more than 5 percent of any stock or options, if a publicly held organization. (B) The names of all holders of bonds or notes in excess of one hundred thousand dollars ($100,000), if any. (C) The names of all corporations and organizations that the independent medical review organization controls or is affiliated with, and the nature and extent of any ownership or control, including the affiliated organization’s type of business. (D) The names and biographical sketches of all directors, officers, and executives of the independent medical review organization, as well as a statement regarding any past or present relationships the directors, officers, and executives may have with any health care service plan, disability insurer, managed care organization, provider group, or board or committee of an insurer, a plan, a managed care organization, or a provider group. (E) (i) The percentage of revenue the independent medical review organization receives from expert reviews, including, but not limited to, external medical reviews, quality assurance reviews, and utilization reviews. (ii) The names of any insurer or provider group for which the independent medical review organization provides review services, including, but not limited to, utilization review, quality assurance review, and external medical review. Any change in this information shall be reported to the department within five business days of the change. (F) A description of the review process including, but not limited to, the method of selecting expert reviewers and matching the expert reviewers to specific cases. (G) A description of the system the independent medical review organization uses to identify and recruit medical professionals to review treatment and treatment recommendation decisions, the number of medical professionals credentialed, and the types of cases and areas of expertise that the medical professionals are credentialed to review. (H) A description of how the independent medical review organization ensures compliance with the conflict-of-interest provisions of this section. (3) The organization shall demonstrate that it has a quality assurance mechanism in place that does the following: (A) Ensures that the medical professionals retained are appropriately credentialed and privileged. (B) Ensures that the reviews provided by the medical professionals are timely, clear, and credible, and that reviews are monitored for quality on an ongoing basis. (C) Ensures that the method of selecting medical professionals for individual cases achieves a fair and impartial panel of medical professionals who are qualified to render recommendations regarding the clinical conditions and the medical necessity of treatments or therapies in question. (D) Ensures the confidentiality of medical records and the review materials, consistent with the requirements of this section and applicable state and federal law. (E) Ensures the independence of the medical professionals retained to perform the reviews through conflict-of-interest policies and prohibitions, and ensures adequate screening for conflicts of interest, pursuant to paragraph (5). (4) Medical professionals selected by independent medical review organizations to review medical treatment decisions shall be physicians or other appropriate providers who meet the following minimum requirements: (A) The medical professional shall be a clinician expert in the treatment of the insured’s medical condition and knowledgeable about the proposed treatment through recent or current actual clinical experience treating patients with the same or a similar medical condition as the insured. (B) Notwithstanding any other provision of law, the medical professional shall hold a nonrestricted license in any state of the United States, and for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the condition or treatment under review. The independent medical review organization shall give preference to the use of a physician licensed in California as the reviewer, except when training and experience with the issue under review reasonably requires the use of an out-of-state reviewer. (C) The medical professional shall have no history of disciplinary action or sanctions, including, but not limited to, loss of staff privileges or participation restrictions, taken or pending by any hospital, government, or regulatory body. (5) Neither the expert reviewer, nor the independent medical review organization, shall have any material professional, material familial, or material financial affiliation with any of the following: (A) The disability insurer or a provider group of the insurer, except that an academic medical center under contract to the insurer to provide services to insureds may qualify as an independent medical review organization provided it will not provide the service and provided the center is not the developer or manufacturer of the proposed treatment. (B) Any officer, director, or management employee of the insurer. (C) The physician, the physician’s medical group, or the independent practice association (IPA) proposing the treatment. (D) The institution at which the treatment would be provided. (E) The development or manufacture of the treatment proposed for the insured whose condition is under review. (F) The insured or the insured’s immediate family. (6) For purposes of this section, the following terms shall have the following meanings: (A) “Material familial affiliation” means any relationship as a spouse, child, parent, sibling, spouse’s parent, or child’s spouse. (B) “Material professional affiliation” means any physician-patient relationship, any partnership or employment relationship, a shareholder or similar ownership interest in a professional corporation, or any independent contractor arrangement that constitutes a material financial affiliation with any expert or any officer or director of the independent medical review organization. “Material professional affiliation” does not include affiliations that are limited to staff privileges at a health facility. (C) “Material financial affiliation” means any financial interest of more than 5 percent of total annual revenue or total annual income of an independent medical review organization or individual to which this subdivision applies. “Material financial affiliation” does not include payment by the insurer to the independent medical review organization for the services required by this section, nor does “material financial affiliation” include an expert’s participation as a contracting provider where the expert is affiliated with an academic medical center or a National Cancer Institute-designated clinical cancer research center. (e) The department shall provide, upon the request of any interested person, a copy of all nonproprietary information, as determined by the commissioner, filed with it by an independent medical review organization seeking to contract under this article. The department may charge a nominal fee to the interested person for photocopying the requested information. (f) The commissioner may contract with the Department of Managed Health Care to administer the independent medical review process established by this article. (g) This section shall become operative on July 1, 2015. (Repealed (in Sec. 9) and added by Stats. 2012, Ch. 872, Sec. 10. (SB 1410) Effective January 1, 2013. Section operative July 1, 2015, by its own provisions.)
  92. 10169.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. )

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    This section sets the procedure and deadlines for independent medical review of a disputed health care service, including reviewer confidentiality and the commissioner’s binding decision.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. ) ## 10169.3. (a) Upon receipt of information and documents related to a case, the medical professional reviewer or reviewers selected to conduct the review by the independent medical review organization shall promptly review all pertinent medical records of the insured, provider reports, as well as any other information submitted to the organization as authorized by the department or requested from any of the parties to the dispute by the reviewers. If reviewers request information from any of the parties, a copy of the request and the response shall be provided to all of the parties. The reviewer or reviewers shall also review relevant information related to the criteria set forth in subdivision (b). (b) Following its review, the reviewer or reviewers shall determine whether the disputed health care service was medically necessary based on the specific medical needs of the insured and any of the following: (1) Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service. (2) Nationally recognized professional standards. (3) Expert opinion. (4) Generally accepted standards of medical practice. (5) Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. (c) The organization shall complete its review and make its determination in writing, and in layperson’s terms to the maximum extent practicable, within 30 days of the receipt of the application for review and supporting documentation, or within less time as prescribed by the commissioner. If the disputed health care service has not been provided and the insured’s provider or the department certifies in writing that an imminent and serious threat to the health of the insured may exist, including, but not limited to, serious pain, the potential loss of life, limb, or major bodily function, or the immediate and serious deterioration of the health of the insured, the analyses and determinations of the reviewers shall be expedited and rendered within three days of the receipt of the information. Subject to the approval of the department, the deadlines for analyses and determinations involving both regular and expedited reviews may be extended by the commissioner for up to three days in extraordinary circumstances or for good cause. (d) The medical professionals’ analyses and determinations shall state whether the disputed health care service is medically necessary. Each analysis shall cite the insured’s medical condition, the relevant documents in the record, and the relevant findings associated with the provisions of subdivision (b) to support the determination. If more than one medical professional reviews the case, the recommendation of the majority shall prevail. If the medical professionals reviewing the case are evenly split as to whether the disputed health care service should be provided, the decision shall be in favor of providing the service. (e) The independent medical review organization shall provide the director, the insurer, the insured, and the insured’s provider with the analyses and determinations of the medical professionals reviewing the case, and a description of the qualifications of the medical professionals. The independent medical review organization shall keep the names of the reviewers confidential in all communications with entities or individuals outside the independent medical review organization, except in cases where the reviewer is called to testify and in response to court orders. If more than one medical professional reviewed the case and the result was differing determinations, the independent medical review organization shall provide each of the separate reviewer’s analyses and determinations. (f) The commissioner shall immediately adopt the determination of the independent medical review organization, and shall promptly issue a written decision to the parties that shall be binding on the insurer. (g) After removing the names of the parties, including, but not limited to, the insured, all medical providers, the insurer, and any of the insurer’s employees or contractors, commissioner decisions adopting a determination of an independent medical review organization shall be made available by the department in a searchable database on the department’s Internet Web site, after considering applicable laws governing disclosure of public records, confidentiality, and personal privacy. (h) (1) Information regarding each commissioner decision provided by the database referenced in subdivision (g) shall include all of the following: (A) Insured demographic profile information, including age and gender. (B) The insured diagnosis and disputed health care service. (C) Whether the independent medical review was for medically necessary services pursuant to this article or for experimental or investigational therapies pursuant to Section 10145.3. (D) Whether the independent medical review was standard or expedited. (E) Length of time from the receipt by the independent medical review organization of the application for review and supporting documentation to the rendering of a determination by the independent medical review organization in writing. (F) Length of time from receipt by the department of the independent medical review application to the issuance of the commissioner’s determination in writing to the parties that is binding on the health insurer. (G) Credentials and qualifications of the reviewer or reviewers. (H) The nature of the statutory criteria set forth in subdivision (b) that the reviewer or reviewers used to make the case decision. (I) The final result of the determination. (J) The year the determination was made. (K) A detailed case summary that includes the specific standards, criteria, and medical and scientific evidence, if any, that led to the case decision. (2) The database referenced in subdivision (g) shall be accompanied by all of the following: (A) The annual rate of independent medical review among the total insured population. (B) The annual rate of independent medical review cases by health insurer. (C) The number, type, and resolution of independent medical review cases by health insurer. (D) The number, type, and resolution of independent medical review cases by ethnicity, race, and primary language spoken. (i) This section shall become operative on July 1, 2015. (Repealed (in Sec. 11) and added by Stats. 2012, Ch. 872, Sec. 12. (SB 1410) Effective January 1, 2013. Section operative July 1, 2015, by its own provisions.)
  93. 10169.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. )

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    The commissioner must set reimbursement and assessment-fee arrangements for independent medical review, and disability insurers must bear the system’s costs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3.5. Appeals Seeking Independent Medical Review [10169 - 10169.5] ( Article 3.5 added by Stats. 1999, Ch. 533, Sec. 2. ) ## 10169.5. (a) After considering the results of a competitive bidding process and any other relevant information on program costs, the commissioner shall establish a reasonable, per-case reimbursement schedule to pay the costs of independent medical review organization reviews, which may vary depending on the type of medical condition under review and on other relevant factors. (b) The costs of the independent medical review system for insureds shall be borne by disability insurers pursuant to an assessment fee system established by the commissioner. In determining the amount to be assessed, the commissioner shall consider all appropriations available for the support of this article, and existing fees paid to the department. The commissioner may adjust fees upward or downward, on a schedule set by the department, to address shortages or overpayments, and to reflect utilization of the independent review process. (c) The commissioner may contract with the Department of Managed Health Care to administer the requirements of this article. (Amended by Stats. 2000, Ch. 857, Sec. 64. Effective January 1, 2001.)
  94. 1017.

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

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    The commissioner may seek liquidation-related orders, and the court must issue an order dissolving the domestic corporation when requested under this section.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1017. (a) In the commissioner’s application for an order for the liquidation of a domestic corporation, or at any time thereafter, the commissioner may apply for, and the court shall make, an order dissolving the corporation. (b) At any time during a proceeding for the liquidation of a domestic corporation authorized under Section 1016, the commissioner may apply for, and the court shall make, an order to permit the commissioner to sell the charter and license of that corporation while continuing to administer and distribute the remaining assets according to the provisions of this article. The order shall provide that the liabilities of the domestic corporation may not be transferred with the charter and license. In continuing the administration and distribution of assets the commissioner need not establish a liquidating trust or other, similar entity. (Amended by Stats. 1995, Ch. 578, Sec. 2. Effective January 1, 1996.)
  95. 10170.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Life insurance proceeds may be paid in listed forms, but insurers must use a lump-sum payment or a clearly described settlement option and provide required disclosures when retained-asset accounts are involved.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10170. Life insurance may be made payable as follows: (a) On the death of the insured. (b) On his or her surviving a specified period. (c) Periodically as long as he or she lives. (d) Otherwise contingently on the continuance or determination of life. (e) Upon those terms and conditions and subject to those restrictions as to revocation by the policyholder and control by beneficiaries as shall have been agreed to in writing by the insurer and the policyholder. If no terms and conditions have been agreed to by the insurer and the policyholder during the insured’s lifetime then upon those terms and conditions and subject to those restrictions as may be agreed to in writing by the insurer and the beneficiaries. Any agreement may be rescinded or amended by the parties to the agreement without the consent of any designated beneficiary unless the rights of any beneficiary have been expressly declared to be irrevocable. No agreement hereafter made shall vest in the insurer discretion as to the conditions, time, amount, manner, or method of payment. The relationship between the insurer and the policyholder or beneficiaries under any agreement shall be that of debtor and creditor, and the insurer shall not be required to segregate funds so held but shall hold them as a part of its general corporate assets. (f) Notwithstanding subdivision (e), all life insurance benefits shall be paid in the form of a lump-sum payment to the beneficiary or by another settlement option that is clearly described in the claim form. If the beneficiary is provided settlement options in addition to a lump-sum payment or a settlement option selected by the policyholder, the beneficiary shall have the option to choose how benefits are to be paid to the beneficiary. If the beneficiary does not choose one of the available settlement options, a retained-asset account may be the default option only if the claim form provides a prominent disclosure that, in the absence of a choice by the beneficiary, payment of policy benefits shall be made through establishment of a retained-asset account on the beneficiary’s behalf. This disclosure shall be provided in the portion of the claim form where the beneficiary is offered the ability to select his or her choice of payment method and shall be in easy-to-understand language and in bold and at least 12-point font type. In all such cases, whether by beneficiary choice or default, the insurer shall provide to the beneficiary the disclosure provided for in Section 10509.937. (1) If an insurer offers an option or recommends the option to a policyholder of an individual or group life insurance policy that the beneficiary receive life insurance proceeds in the form of a retained-asset account or any arrangement other than a lump-sum payment, the insurer shall provide the policyholder, at the time the offer or recommendation is made, written information describing each of the settlement options available under the policy and specific details relevant to those options. If an insurer offers or recommends to a beneficiary that the beneficiary receive life insurance proceeds in the form of a retained-asset account or any arrangement other than a lump-sum payment in advance of the time the claim is made, the insurer shall provide the beneficiary written information describing each of the settlement options available under the policy and specific details relevant to those options. If an insurer offers or recommends to a beneficiary that the beneficiary receive life insurance proceeds in the form of a retained-asset account at the time a claim is being made, the insurer shall comply with the procedures set forth in Article 11 (commencing with Section 10509.930) of Chapter 5. (2) For purposes of this subdivision, the following terms have the following meanings: (A) “Lump-sum payment” means a single payment made directly to the beneficiary that satisfies all of the benefits owed to the beneficiary. (B) “Retained-asset account” means any mechanism whereby the settlement of proceeds payable under a life insurance policy is accomplished by the insurer, or an entity acting on behalf of the insurer, by depositing those proceeds into an account with check or draft writing privileges, and where those proceeds are retained by the insurer pursuant to a supplemental contract not involving annuity benefits. (g) An insurer that fails to conform to the requirements provided under this section shall be subject to Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1. (h) The commissioner may, from time to time and after notice and public hearing, adopt regulations specifying reasonable requirements for the form of agreements entered into and written disclosures provided pursuant to subdivisions (e) and (f), and for compliance with Section 10172.5. (Amended by Stats. 2011, Ch. 423, Sec. 1. (SB 599) Effective January 1, 2012.)
  96. 10171.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A life insurance policy or related agreement may include a clause shielding proceeds from transfer, encumbrance, creditors, and legal process against a beneficiary.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10171. Any life policy or other agreement relating to the holding or payment of the proceeds of a life policy may provide that the proceeds thereof or payments thereunder shall not be subject to transfer, anticipation or commutation or encumbrance by any beneficiary, and shall not be subject to the claims of creditors of any beneficiary or any legal process against any beneficiary. (Amended by Stats. 1943, Ch. 533.)
  97. 10172.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a life insurance policy payment is made according to the policy or a written assignment, the insurer is fully discharged unless it had already received written notice at its home office from someone else claiming the payment or an interest in the policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10172. Notwithstanding Sections 751 and 1100 of the Family Code and Section 249.5 of the Probate Code, when the proceeds of, or payments under, a life insurance policy become payable and the insurer makes payment thereof in accordance with the terms of the policy, or in accordance with the terms of any written assignment thereof if the policy has been assigned, that payment shall fully discharge the insurer from all claims under the policy unless, before that payment is made, the insurer has received, at its home office, written notice by or on behalf of some other person that the other person claims to be entitled to that payment or some interest in the policy. (Amended by Stats. 2004, Ch. 775, Sec. 3. Effective January 1, 2005.)
  98. 10172.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a life insurer delays paying death benefits beyond 30 days after the insured’s death, it must pay interest and notify the beneficiaries; it may not hold payment longer than reasonably necessary.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10172.5. (a) Notwithstanding any other provision of law, each insurer admitted to transact life insurance, credit life insurance, or accidental death insurance in this state that fails or refuses to pay the proceeds of, or payments under, any policy of life insurance issued by it within 30 days after the date of death of the insured shall pay interest, at a rate not less than the then current rate of interest on death proceeds left on deposit with the insurer computed from the date of the insured’s death, on any moneys payable and unpaid after the expiration of the 30-day period. This section shall apply only to deaths of insureds which occur on or after January 1, 1976. (b) Nothing in this section shall be construed to allow any insurer admitted to transact life insurance, credit life insurance, or accidental death insurance in this state to withhold payment of money payable under a life insurance policy to any beneficiary for a period longer than reasonably necessary to transmit that payment. Whenever possible payment shall be made within 30 days after the date of death of the insured. (c) In any case in which interest on the proceeds of, or payments under, any policy of life insurance, credit life insurance, or accidental death insurance becomes payable pursuant to subdivision (a), the insurer shall notify the named beneficiary or beneficiaries at their last known address that interest will be paid on the proceeds of, or payments under, that policy from the date of death of the named insured. That notice shall specify the rate of interest to be paid. In any case where the notice required by Section 249.5 of the Probate Code has been given to a life insurer, that insurer is not required to provide the notice required by this section until after it has been notified that a child has actually been born within two years of the death of the decedent. The obligation shall be deemed satisfied by giving notice to the person who first provides proof to the insurer that the child has been born alive. (d) This section shall not require the payment of interest in any case in which the beneficiary elects in writing delivered to the insurer to receive the proceeds of, or payments under, the policy by any means other than a lump-sum payment thereof. (Amended by Stats. 2004, Ch. 775, Sec. 4.5. Effective January 1, 2005.)
  99. 10173.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a life insurance policy is assigned in writing, the insurer may deal with the assignee unless and until it receives written notice at its home office from another person claiming an interest in the policy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10173. When a policy of life insurance is assigned in writing the insurer may deal with the assignee in any manner not inconsistent with the terms of said assignment until the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to some interest in such policy. (Added by Stats. 1941, Ch. 272.)
  100. 10173.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a life insurance policy assigned as security is nearing final lapse after missed premium payment, the insurer must send a notice to the assignee, unless the assignee has waived notice in writing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10173.2. When a policy of life insurance is, after the effective date of this section, assigned in writing as security for an indebtedness, the insurer shall, in any case in which it has received written notice of the name and address of the assignee, mail to the assignee a written notice, postage prepaid and addressed to the assignee’s address filed with the insurer, not less than 30 days prior to the final lapse of the policy, each time the policy owner has failed or refused to transmit a premium payment to the insurer before the commencement of the policy’s grace period or before the notice is mailed. The insurer shall give that notice to the assignee in the proper case while the assignment remains in effect, unless the assignee has notified the insurer in writing that the notice is waived. The insurer shall be permitted to charge the policy owner directly or against the policy the reasonable cost of complying with this section, but in no event to exceed two dollars and fifty cents ($2.50) for each notice. As used in this section, “final lapse of the policy” means the date after which the policy will not be reinstated by the insurer without requiring evidence of insurability or written application. (Amended by Stats. 2012, Ch. 315, Sec. 3. (AB 1747) Effective January 1, 2013.)
  101. 10174.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Disability insurance policies that include death benefits must follow Sections 10172, 10172.5, and 10173 for those death benefits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10174. Policies of disability insurance, as defined in Section 106, that provide for death benefits, shall, as to those death benefits, be subject to Sections 10172, 10172.5, and 10173. (Amended by Stats. 2004, Ch. 601, Sec. 5. Effective January 1, 2005.)
  102. 10175.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Sections 10172 to 10174 do not affect claims or rights to a policy, its proceeds, or payments under it, as between people other than the insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10175. Nothing contained in Sections 10172, 10173 or 10174 shall affect any claim or right to any policy or the proceeds thereof, or payments thereunder, as between all persons other than the insurer. (Added by Stats. 1941, Ch. 272.)
  103. 10175.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A disability insurance contract cannot include an incentive plan that pays doctors or other licensed health care practitioners to deny, reduce, limit, or delay medically necessary services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10175.5. (a) No disability insurance contract with a physician and surgeon, physician and surgeon group, or other licensed health care practitioner shall contain any incentive plan that includes specific payment made in any type or form, to a physician and surgeon, physician and surgeon group, or other licensed health care practitioner as an inducement to deny, reduce, limit, or delay specific, medically necessary, and appropriate services provided with respect to specific insureds or groups of insureds with similar medical conditions. (b) Nothing in this section shall be construed to prohibit payment arrangements that are not tied to specific medical decisions involving specific insureds or group of insureds with similar medical conditions. (Added by Stats. 1996, Ch. 1014, Sec. 4. Effective January 1, 1997.)
  104. 10176.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    In disability insurance, policies may cover or exclude certain medical and related services, but they cannot bar insureds from choosing specified licensed providers, and they cannot include a lifetime waiver for mental health coverage on policies issued, renewed, or amended on or after January 1, 1988.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176. (a) In disability insurance, the policy may provide for payment of medical, surgical, chiropractic, physical therapy, speech pathology, audiology, acupuncture, professional mental health, dental, hospital, or optometric expenses upon a reimbursement basis, or for the exclusion of any of those services, and provision may be made therein for payment of all or a portion of the amount of charge for these services without requiring that the insured first pay the expenses. The policy shall not prohibit the insured from selecting any psychologist or other person who is the holder of a certificate or license under Section 1000, 1634, 2050, 2472, 2553, 2630, 2948, 3055, or 4938 of the Business and Professions Code, to perform the particular services covered under the terms of the policy, the certificate holder or licensee being expressly authorized by law to perform those services. (b) If the insured selects any person who is a holder of a certificate under Section 4938 of the Business and Professions Code, a disability insurer or nonprofit hospital service plan shall pay the bona fide claim of an acupuncturist holding a certificate pursuant to Section 4938 of the Business and Professions Code for the treatment of an insured person only if the insured’s policy or contract expressly includes acupuncture as a benefit and includes coverage for the injury or illness treated. Unless the policy or contract expressly includes acupuncture as a benefit, no person who is the holder of any license or certificate set forth in this section shall be paid or reimbursed under the policy for acupuncture. (c) The policy shall not prohibit the insured, upon referral by a physician and surgeon licensed under Section 2050 of the Business and Professions Code, from selecting any licensed clinical social worker who is the holder of a license issued under Section 4996 of the Business and Professions Code, any occupational therapist as specified in Section 2570.2 of the Business and Professions Code, any marriage and family therapist who is the holder of a license under Section 4980.50 of the Business and Professions Code, or any professional clinical counselor who is the holder of a license under Chapter 16 (commencing with Section 4999.10) of Division 2 of the Business and Professions Code, to perform the particular services covered under the terms of the policy, or from selecting any speech-language pathologist or audiologist licensed under Section 2532 of the Business and Professions Code or any registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code who possesses a master’s degree in psychiatric-mental health nursing and is listed as a psychiatric-mental health nurse by the Board of Registered Nursing, or any advanced practice registered nurse certified as a clinical nurse specialist pursuant to Article 9 (commencing with Section 2838) of Chapter 6 of Division 2 of the Business and Professions Code who participates in expert clinical practice in the specialty of psychiatric-mental health nursing, or any respiratory care practitioner certified pursuant to Chapter 8.3 (commencing with Section 3700) of Division 2 of the Business and Professions Code to perform services deemed necessary by the referring physician and surgeon, that certificate holder, licensee or otherwise regulated person, being expressly authorized by law to perform the services. (d) Nothing in this section shall be construed to allow any certificate holder or licensee enumerated in this section to perform professional mental health services beyond his or her field or fields of competence as established by his or her education, training, and experience. (e) For the purposes of this section: (1) “Marriage and family therapist” means a licensed marriage and family therapist who has received specific instruction in assessment, diagnosis, prognosis, and counseling, and psychotherapeutic treatment of premarital, marriage, family, and child relationship dysfunctions, which is equivalent to the instruction required for licensure on January 1, 1981. (2) “Professional clinical counselor” means a licensed professional clinical counselor who has received specific instruction in assessment, diagnosis, prognosis, counseling, and psychotherapeutic treatment of mental and emotional disorders, which is equivalent to the instruction required for licensure on January 1, 2012. (f) An individual disability insurance policy, which is issued, renewed, or amended on or after January 1, 1988, which includes mental health services coverage may not include a lifetime waiver for that coverage with respect to any applicant. The lifetime waiver of coverage provision shall be deemed unenforceable. (Amended by Stats. 2011, Ch. 381, Sec. 37. (SB 146) Effective January 1, 2012.)
  105. 10176.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Disability policies must be treated as complying with Section 10176, and any conflicting policy term has no effect.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.1. As of the effective date of the amendments to this section enacted at the 1969 Regular Session of the Legislature all disability policies shall be construed to be in compliance with Section 10176, and any provision in such policies in conflict therewith shall be of no effect. (Amended by Stats. 1969, Ch. 296.)
  106. 10176.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Disability insurers generally may not close a block of business unless they follow this section’s notice and transition requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.10. (a) On or after January 1, 1994, no disability insurer issuing policies covering hospital, surgical, or medical expenses delivered or renewed in this state or certificates of group disability insurance delivered or renewed in this state pursuant to a master group policy delivered or renewed in another state, to individuals, or to employer groups with fewer than two eligible employees, as defined in subdivision (g) of Section 10700, shall close a block of business without complying with this section. (b) As used in this section, “block of business” means individual, group, or blanket disability insurance contracts covering hospital, medical, or surgical expenses of a particular policy form that has distinct benefits or marketing methods. “Closed block of business” means a block of business for which an insurer ceases to actively market and sell new contracts under a particular policy form in this state. (c) Notwithstanding subdivision (b), a block of business shall be presumed closed if either of the following applies: (1) There has been an overall reduction of 12 percent in the number of in force policies of a particular form for a period of 12 months. (2) The block has less than 2,000 insured nationally or 1,000 insureds in California. This presumption shall not apply to a block of business initiated within the previous 24 months, but notification of that block shall be provided to the commissioner. The notification shall not be subject to the approval required by subdivision (d). An insurer may present evidence for consideration by the commissioner that the presumption in the particular case is incorrect. Should the determination be made that the block is closed, the insurer shall be given those remedy options contained in subdivision (d). The fact that a block of business does not meet one of the presumptions set forth in this subdivision shall not preclude a determination that it is closed as defined in subdivision (b). (d) An insurer shall notify the commissioner within 30 days of its decision to close a block or, in the absence of an actual decision to close a block of business, within 30 days of its determination that the block is within the presumptions set forth in subdivision (c). The commissioner may notify an insurer that he or she has determined that the presumptions contained in subdivision (c) apply to a block. No insurer providing disability insurance covering hospital, medical, or surgical expenses shall close a policy form or group certificate without notification to the commissioner. That notification shall include a plan to permit an insured to move to any open block, providing comparable benefits with no additional underwriting requirement or, alternatively, the insurer shall be required to pool the closed block’s experience with all appropriate open forms for purposes of renewal rate determination, with no rate penalty or surcharge, beyond that which reflects the experience of the combined pool. When the insurer chooses to pool, the notice shall include the insurer’s plan for pooling the closed block’s experience. The insurer may implement the pooling plan if 30 days expire after the submission is filed without written notice from the commissioner specifying the reasons for his or her opinion that the pooling plan does not comply with the requirements of this section, or, prior to that time, if the commissioner provides the insurer written notice that the pooling plan complies with the requirements of this section. The approval shall be based upon consideration of the accumulative recent and expected future experience of the closed form and those with which the closed form is to be combined. (e) No insurer shall offer or sell any form nor provide misleading information about the active or closed status of its business for the purpose of evading this section. (f) An insurer shall bring any blocks of business closed prior to the effective date of this section into compliance with the terms of this section no later than December 31, 1994. (g) This section shall not apply to small employer carriers providing small employer health insurance to individuals or employer groups with fewer than two eligible employees if that coverage is provided pursuant to Chapter 14 (commencing with Section 10700) of Part 2 of Division 2, and with specific reference to coverage for individuals or employer groups with fewer than two eligible employees, is approved by the commissioner pursuant to Section 10705, provided a carrier electing to sell coverage pursuant to this subdivision shall continue to do so until such time as the carrier ceases to market coverage to small employers and complies with subdivision (c) of Section 10713. (h) This section shall not apply to accident only coverage, coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, long-term care insurance, dental, vision, or conversion coverage, coverage issued as a supplement to liability insurance, or automobile medical payment insurance. (Amended by Stats. 1997, Ch. 336, Sec. 27. Effective August 21, 1997.)
  107. 10176.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Health insurers must accept premium payments from certain listed third parties, and financially interested entities that are not exempt must follow disclosure, assistance, and conduct rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.11. (a) An insurer that provides a policy of health insurance shall accept premium payments from the following third-party entities without the need to comply with subdivision (c): (1) A Ryan White HIV/AIDS Program under Title XXVI of the federal Public Health Service Act. (2) An Indian tribe, tribal organization, or urban Indian organization. (3) A local, state, or federal government program, including a grantee directed by a government program to make payments on its behalf. (4) A member of the individual’s family, defined for purposes of this section to include the individual’s spouse, domestic partner, child, parent, grandparent, and siblings, unless the true source of funds used to make the premium payment originates with a financially interested entity. (b) A financially interested entity that is not specified in subdivision (a) and is making third-party premium payments shall comply with all of the following requirements: (1) It shall provide assistance for the full policy year and notify the insured prior to an open enrollment period, if applicable, if financial assistance will be discontinued. Notification shall include information regarding alternative coverage options, including, but not limited to, Medicare, Medicaid, individual market policies, and employer policies, if applicable. Assistance may be discontinued at the request of an insured who obtains other health insurance coverage, or if the insured dies during the policy year. (2) It shall agree not to condition financial assistance on eligibility for, or receipt of, any surgery, transplant, procedure, drug, or device. (3) It shall inform an applicant of financial assistance, and shall inform an insured annually, of all available health coverage options, including, but not limited to, Medicare, Medicaid, individual market plans, and employer plans, if applicable. (4) It shall agree not to steer, direct, or advise the insured into or away from a specific coverage program option or health coverage. (5) It shall agree that financial assistance shall not be conditioned on the use of a specific facility, health care provider, or coverage type. (6) It shall agree that financial assistance shall be based on financial need in accordance with criteria that are uniformly applied and publicly available. (c) A financially interested entity shall not make a third-party premium payment unless the entity complies with both of the following requirements: (1) Annually provides a statement to the health insurer that it meets the requirements set forth in subdivision (b), as applicable. (2) Discloses to the health insurer, prior to making the initial payment, the name of the insured for each policy on whose behalf a third-party premium payment described in this section will be made. (d) (1) Reimbursement for insureds for whom a nonprofit financially interested entity described in paragraph (2) of subdivision (h) that was already making premium payments to a health insurer on the insured’s behalf prior to October 1, 2019, is not subject to subdivisions (e) and (f) and the financially interested entity is not required to comply with the disclosure requirements described in subdivision (c) for those insureds. (2) Notwithstanding paragraph (1), a financially interested entity shall comply with the disclosure requirements of subdivision (c) for an insured on whose behalf the financially interested entity was making premium payments to a health insurer on the insured’s behalf prior to October 1, 2019, if the insured changes health insurers on or after March 1, 2020. (3) The amount of reimbursement for services paid to a financially interested provider shall be governed by the terms of the insured’s health insurance policy contract, except for an insured who has changed health insurers pursuant to paragraph (2), in which case, commencing January 1, 2022, the reimbursement amount shall be determined in accordance with subdivisions (e) and (f). (e) Commencing January 1, 2022, if a financially interested entity makes a third-party premium payment to a health insurer on behalf of an insured, reimbursement to a financially interested provider for covered services shall be determined by the following: (1) For a contracted financially interested provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, the amount of reimbursement for covered services that shall be paid to the financially interested provider on behalf of the insured shall be governed by the higher of the Medicare reimbursement or the rate determined pursuant to the process described in this subdivision, if a rate determination pursuant to that process is sought by either the provider or the health insurer. Financially interested providers shall neither bill the insured nor seek reimbursement from the insured for services provided, except for cost sharing pursuant to the terms and conditions of the insured’s health insurance policy. If an insured’s policy imposes a coinsurance payment for a claim that is subject to this paragraph, the coinsurance payment shall be based on the amount paid by the health insurer pursuant to this paragraph. (2) For a noncontracting financially interested provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, the amount of reimbursement for covered services that shall be paid to the financially interested provider on behalf of the insured shall be governed by the terms and conditions of the insured’s health insurance policy or the rate determined pursuant to the process described in this subdivision, whichever is lower, if a rate determination pursuant to that process is sought by either the provider or the health insurer. Financially interested providers shall not bill the insured nor seek reimbursement from the insured for services provided, except for cost sharing pursuant to the terms and conditions of the insured’s health insurance policy. If the insured’s policy imposes a coinsurance payment for a claim that is subject to this paragraph, the coinsurance payment shall be based on the amount paid by the health insurer pursuant to this paragraph. A claim submitted to a health insurer by a noncontracting financially interested provider may be considered an incomplete claim and contested by the health insurer pursuant to Section 10123.13 or 10123.147 if the financially interested provider has not provided the information as required in subdivision (c). (f) (1) By October 1, 2021, the department shall establish an independent dispute resolution process for the purpose of determining if the amount required to be reimbursed by subdivision (e) is appropriate. (2) If either the provider or health insurer submits a claim to the department’s independent dispute resolution process, the other party shall participate in the independent dispute resolution process. (3) In making its determination, the independent organization shall consider information submitted by either party regarding the actual cost to provide services, patient eligibility for Medicare or Medi-Cal, and the rate that would be paid by Medicare or Medi-Cal for patients eligible for those programs. (4) The health insurer shall implement the determination obtained through the independent dispute resolution process. The independent organization’s determination of the amount required to be reimbursed shall apply for the duration of the policy year for that insured. If dissatisfied, either party may pursue any right, remedy, or penalty established under any other applicable law. (5) In establishing the independent dispute resolution process, the department shall permit the bundling of claims submitted to the same insurer or the same delegated entity for the same or similar services. The department shall permit claims on behalf of multiple insureds from the same provider to the same health insurer to be combined into a single independent dispute resolution process. (6) The department shall establish uniform written procedures for the submission, receipt, processing, and resolution of claim payment disputes pursuant to this section and any other guidelines for implementing this section. (7) The department shall establish reasonable and necessary fees not to exceed the reasonable costs of administering this subdivision. (8) The department may contract with one or more independent organizations to conduct the proceedings. The independent organization handling a dispute shall be independent of either party to the dispute. (9) The department shall use conflict-of-interest standards consistent with the standards pursuant to subdivisions (c) and (d) of Section 10169.2. (10) The department may contract with the same independent organization or organizations as the Department of Managed Health Care. (11) The independent organization retained to conduct proceedings shall be deemed to be consultants for purposes of Section 43.98 of the Civil Code. (12) Contracts entered into pursuant to the authority in this subdivision shall be exempt from Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, Section 19130 of the Government Code, and Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, and shall be exempt from the review or approval of any division of the Department of General Services. (13) This subdivision does not alter a health insurer’s obligations under Section 10123.13. (14) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by issuing guidance, without taking regulatory action, until regulations are adopted. (g) For the purposes of this section, third-party premium payments only include health insurance premium payments made directly by a provider or other third party, made indirectly through payments to the individual for the purpose of making health insurance premium payments, or provided to one or more intermediaries with the intention that the funds be used to make health insurance premium payments for the individuals. (h) The following definitions apply for purposes of this section: (1) “Financially interested” includes any of the following entities: (A) A provider of health care services that receives a direct or indirect financial benefit from a third-party premium payment. (B) An entity that receives the majority of its funding from one or more financially interested providers of health care services, parent companies of providers of health care services, subsidiaries of health care service providers, or related entities. (C) A chronic dialysis clinic that is operated, owned, or controlled by a parent entity or related entity that meets the definition of a large dialysis clinic organization (LDO) under the federal Centers for Medicare and Medicaid Services Comprehensive ESRD Care Model as of January 1, 2019. A chronic dialysis clinic that does not meet the definition of an LDO or has no more than 10 percent of California’s market share of licensed chronic dialysis clinics shall not be considered financially interested for purposes of this section. (2) “Health insurance” means an individual or group health insurance policy as defined in subdivision (b) of Section 106. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or specialized health insurance coverage as described in subdivision (c) of Section 106. (3) “Insured” means an individual whose health insurance premiums are paid by a financially interested entity. (4) “Provider” means a professional person, organization, health facility, or other person or institution that delivers or furnishes health care services. (i) The following shall occur if a health insurer subsequently discovers that a financially interested entity fails to provide disclosure pursuant to subdivision (c): (1) The health insurer shall be entitled to recover 120 percent of the difference between payment made to a provider and the payment to which the provider would have been entitled pursuant to subdivision (e), including interest on that difference. (2) The health insurer shall notify the department of the amount by which the provider was overpaid and shall remit to the department any amount exceeding the difference between the payment made to the provider and the payment to which the provider would have been entitled pursuant to subdivision (e), including interest on that difference that was recovered pursuant to paragraph (1). (j) Commencing January 1, 2022, each health insurer licensed by the department and subject to this section shall provide to the department information regarding premium payments by financially interested entities and reimbursement for services to providers under subdivision (e). The information shall be provided at least annually at the discretion of the department and shall include, to the best of the health insurer’s knowledge, the number of insureds whose premiums were paid by financially interested entities, disclosures provided to the insurer pursuant to subdivision (c), the identities of any providers whose reimbursement rate was governed by subdivision (e), the identities of any providers who failed to provide disclosure as described in subdivision (c), and, at the discretion of the department, additional information necessary for the implementation of this section. (k) This section does not limit the authority of the Attorney General to take action to enforce this section. (l) This section does not affect a contracted payment rate for a provider who is not financially interested. (m) This section does not alter any of a health insurer’s obligations and requirements under this part, including, but not limited to, the following: (1) The obligation of a health insurer to fairly and affirmatively offer, market, sell, and issue a health benefit plan to any individual, consistent with Chapter 9.9 (commencing with Section 10965), or small employer, consistent with Chapter 8 (commencing with Section 10700). (2) The obligations of a health insurer with respect to cancellation or nonrenewal as provided in this part, including, but not limited to, Sections 10273.4, 10273.6, and 10273.7. (3) A health insurer may not deny coverage to an insured whose premiums are paid by a third party. (n) This section does not supersede or modify any privacy and information security requirements and protections in federal and state law regarding protected health information or personally identifiable information, including, but not limited to, the federal Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. Sec. 300gg). (o) Notwithstanding clause (iii) of subparagraph (A) of paragraph (1) of subdivision (d) of Section 10965.3, an insured’s loss of coverage due to a financially interested entity’s failure to pay premiums on a timely basis shall be deemed a triggering event for special enrollment pursuant to subparagraph (A) of paragraph (1) of subdivision (d) of Section 10965.3. (Amended by Stats. 2020, Ch. 370, Sec. 218. (SB 1371) Effective January 1, 2021.)
  108. 10176.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A disability insurance policy may limit payment for licensed physical therapist services to treatment prescribed by a physician and surgeon with a Medical Board of California certificate.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.2. As an alternative to the exclusion permitted by Section 10176, a disability insurance policy may provide that services of a licensed physical therapist, licensed pursuant to Section 2630 of the Business and Professions Code, will be paid only if rendered pursuant to a method of treatment prescribed by a person holding a physician’s and surgeon’s certificate issued by the Medical Board of California. (Amended by Stats. 1990, Ch. 886, Sec. 1.)
  109. 10176.25.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A disability insurance policy may limit payment for certain dietitian or nutrition professional services to treatment prescribed by a physician with a Medical Board certificate.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.25. (a) As an alternative to an exclusion permitted by Section 10176, a disability insurance policy may provide that services of a registered dietitian or other nutrition professional meeting the qualifications prescribed by subdivision (a) or (e) of Section 2585 of the Business and Professions Code will be paid only if rendered pursuant to a method of treatment prescribed by a person holding a physician’s and surgeon’s certificate issued by the Medical Board of California. (b) Nothing in this section requires disability insurers to automatically pay for services provided by a registered dietitian or other nutrition professional. (Amended by Stats. 2001, Ch. 628, Sec. 3. Effective January 1, 2002.)
  110. 10176.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    The 1971 amendments to Section 10176 and the addition of Section 10176.2 apply only to policies issued or amended on or after the amendments’ effective date.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.3. The amendments to Section 10176 and the addition of Section 10176.2 enacted at the 1971 Regular Session of the Legislature shall be applicable only to those policies issued or amended on or after the effective date of such amendments and addition. (Added by Stats. 1971, Ch. 1490.)
  111. 10176.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Insurers must accept chiropractors’ disability certifications as equally valid as physicians and surgeons’ certifications, when made within the scope of the license, for establishing disability in certain insurance lines.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.4. For purposes of establishing the fact of disability in credit disability insurance, disability insurance or life insurance, chiropractors’ certifications of disability when made within the scope of their license shall be accepted by insurers as equally valid as physicians and surgeons’ certifications of disability when made within the scope of their license. (Added by Stats. 1977, Ch. 651.)
  112. 10176.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    For certain disability insurance policies issued outside California, the insured may choose a California-licensed psychologist for covered services in California.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.5. Disability insurance which is written or issued for delivery outside California in a state the laws of which require recognition of psychologists licensed in such state for services performed within the scope of psychological practice shall not be deemed to prohibit the insured from selecting a psychologist licensed in California to perform services in California which are covered under the terms of the policy even though such psychologist is not licensed in the state in which the insurance is written or issued for delivery. (Added by Stats. 1981, Ch. 558, Sec. 2.)
  113. 10176.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain group disability insurance policies must offer coverage for diabetic daycare self-management education programs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.6. On and after January 1, 1982, every policy of disability insurance which is issued, amended, delivered, or renewed that covers hospital, medical, or surgical expenses on a group basis shall offer coverage for diabetic daycare self-management education programs, under such terms and conditions as may be agreed upon between the insurer and the group policyholder, subject to utilization controls. Coverage shall only apply to programs directed and supervised by a licensed physician who is board certified in internal medicine or pediatrics. Diabetic daycare self-management and education programs shall be provided by health care professionals including, but not limited to, physicians, registered nurses, registered pharmacists, and registered dieticians who are knowledgeable about the disease process of diabetes and the treatment of diabetic patients. As used in this section, diabetic daycare self-management education programs means instruction which will enable diabetic patients and their families to gain an understanding of the diabetic disease process, and the daily management of diabetic therapy thereby avoiding frequent hospitalizations and complications. Nothing in this section shall be construed to require the offering of programs whose sole or primary purpose is weight reduction. (Added by Stats. 1981, Ch. 750, Sec. 3.)
  114. 10176.61.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Insurers must cover specified diabetes equipment, supplies, medications, and training, and certain health policies must cap insulin cost sharing and limit step therapy.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.61. (a) An insurer issuing, amending, delivering, or renewing a disability insurance policy on or after January 1, 2000, that covers hospital, medical, or surgical expenses shall include coverage for the following equipment and supplies for the management and treatment of insulin-using diabetes, non-insulin-using diabetes, and gestational diabetes as medically necessary, even if the items are available without a prescription: (1) Blood glucose monitors and blood glucose testing strips. (2) Blood glucose monitors designed to assist the visually impaired. (3) Insulin pumps and all related necessary supplies. (4) Ketone urine testing strips. (5) Lancets and lancet puncture devices. (6) Pen delivery systems for the administration of insulin. (7) Podiatric devices to prevent or treat diabetes-related complications. (8) Insulin syringes. (9) Visual aids, excluding eyewear, to assist the visually impaired with proper dosing of insulin. (b) An insurer issuing, amending, delivering, or renewing a disability insurance policy on or after January 1, 2000, that covers prescription benefits shall include coverage for the following prescription items if the items are determined to be medically necessary: (1) Insulin. (2) Prescriptive medications for the treatment of diabetes. (3) Glucagon. (c) The coinsurances and deductibles for the benefits specified in subdivisions (a) and (b) shall not exceed those established for similar benefits within the given policy. (d) (1) Notwithstanding subdivision (c), a large group health insurance policy that is issued, amended, or renewed on or after January 1, 2026, shall not impose a copayment, coinsurance, deductible, or any other cost sharing on an insulin prescription drug that exceeds thirty-five dollars ($35) for a 30-day supply. At least one insulin for a given drug type in all forms and concentrations shall be on the prescription drug formulary. (2) Notwithstanding subdivision (c), an individual or small group health insurance policy that is issued, amended, or renewed on or after January 1, 2027, shall not impose a copayment, coinsurance, deductible, or any other cost sharing on an insulin prescription drug that exceeds thirty-five dollars ($35) for a 30-day supply. If an individual or small group health insurance policy maintains a drug formulary grouped into tiers, the cost-sharing cap pursuant to paragraph (1) shall apply only to insulin prescription drugs that are in Tier 1 and Tier 2. At least one insulin for a given drug type in all forms and concentrations shall be on Tier 1 or Tier 2. If there is no Tier 1 or Tier 2 insulin prescription drug that is clinically appropriate for an insured, the health insurer shall limit the cost sharing for a higher tier drug to no more than thirty-five dollars ($35) for a 30-day supply for an individual insured. (3) If a health insurance policy is a high deductible health plan, as defined in Section 223(c)(2) of Title 26 of the United States Code, the policy shall not impose a deductible, coinsurance, or any other cost sharing on an insulin prescription drug that exceeds thirty-five dollars ($35) for a 30-day supply, unless applying the thirty-five-dollar ($35) limitation for a 30-day supply of an insulin prescription drug would conflict with federal requirements for high deductible health plans. (4) When the state has the capacity to label or produce an insulin prescription drug, the deductible and copayment limitations in paragraph (1) shall also apply to an insulin prescription drug, or any therapeutic equivalent insulin prescription drug, that is labeled or produced by the state. (5) For purposes of this subdivision and subdivision (e): (A) “Drug type” includes, but is not limited to, rapid acting, regular or short acting, intermediate acting, long acting, ultra-long acting, and premixed. (B) “Insulin prescription drug” means a prescription drug that contains insulin and is used to control blood glucose levels to treat diabetes. (e) (1) Consistent with this section, on and after January 1, 2026, a health insurer shall not impose step therapy as a prerequisite to authorizing coverage of an insulin prescription drug described in subdivision (d), except as provided in paragraph (2). For purposes of this section, “step therapy” has the same meaning as defined in paragraph (2) of subdivision (i) of Section 10123.201. For purposes of this section, step therapy is prohibited for both self-administered drugs and physician-administered drugs, except as provided in paragraph (2). (2) Because the United States Food and Drug Administration has approved one or more types of insulin, this section does not require a health care service plan to cover all of the types of insulin without step therapy, if at least one insulin in each drug type is covered without step therapy. (f) An insurer shall provide coverage for diabetes outpatient self-management training, education, and medical nutrition therapy necessary to enable an insured to properly use the equipment, supplies, and medications set forth in subdivisions (a) and (b) and additional diabetes outpatient self-management training, education, and medical nutrition therapy upon the direction or prescription of those services by the insured’s participating physician. If an insurer delegates outpatient self-management training to contracting providers, the insurer shall require contracting providers to ensure that diabetes outpatient self-management training, education, and medical nutrition therapy are provided by appropriately licensed or registered health care professionals. (g) The diabetes outpatient self-management training, education, and medical nutrition therapy services identified in subdivision (f) shall be provided by appropriately licensed or registered health care professionals as prescribed by a health care professional legally authorized to prescribe the services. (h) The coinsurances and deductibles for the benefits specified in subdivision (f) shall not exceed those established for physician office visits by the insurer. (i) Every disability insurer governed by this section shall disclose the benefits covered pursuant to this section in the insurer’s evidence of coverage and disclosure forms. (j) An insurer shall not reduce or eliminate coverage as a result of this section. (k) This section does not apply to vision-only, dental-only, accident-only, specified disease, hospital indemnity, Medicare supplement, long-term care, or disability income insurance, except that for accident-only, specified disease, and hospital indemnity insurance coverage, benefits under this section only apply to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the policy. This section does not impose a new benefit mandate on accident-only, specified disease, or hospital indemnity insurance. (Amended by Stats. 2025, Ch. 737, Sec. 3. (SB 40) Effective January 1, 2026.)
  115. 10176.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    This section says certain disability insurance contracts cannot be treated as forbidding covered persons from choosing specified California licensees to provide covered services in California, and covered persons and specified California health care providers should be entitled to the insurance benefits for those services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.7. (a) Disability insurance where the insurer is licensed to do business in this state and which provides coverage under a contract of insurance which includes California residents but which may be written or issued for delivery outside of California where benefits are provided within the scope of practice of a licensed clinical social worker, a registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code who possesses a master’s degree in psychiatric-mental health nursing and two years of supervised experience in psychiatric-mental health nursing, a marriage and family therapist who is the holder of a license under Chapter 13 (commencing with Section 4980) of Division 2 of the Business and Professions Code, a professional clinical counselor who is the holder of a license under Chapter 16 (commencing with Section 4999.10) of Division 2 of the Business and Professions Code, or a respiratory care practitioner certified pursuant to Chapter 8.3 (commencing with Section 3700) of Division 2 of the Business and Professions Code shall not be deemed to prohibit persons covered under the contract from selecting those licensees in California to perform the services in California that are within the terms of the contract even though the licensees are not licensed in the state where the contract is written or issued for delivery. (b) It is the intent of the Legislature in amending this section in the 1984 portion of the 1983–84 Legislative Session that persons covered by the insurance and those providers of health care specified in this section who are licensed in California should be entitled to the benefits provided by the insurance for services of those providers rendered to those persons. (Amended by Stats. 2011, Ch. 381, Sec. 38. (SB 146) Effective January 1, 2012.)
  116. 10176.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A disability insurance policy may make payment for certain respiratory care services conditional on treatment being prescribed by a physician and surgeon.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.8. A disability insurance policy may provide that services of a respiratory care practitioner certified pursuant to Chapter 8.3 (commencing with Section 3700) of the Division 2 of the Business and Professions Code, will be paid for pulmonary rehabilitation and respiratory home care only if rendered pursuant to a method of treatment prescribed by a physician and surgeon. (Added by Stats. 1989, Ch. 786, Sec. 3.)
  117. 10176.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Insurance policies and plans covered by this article cannot be treated as limiting liability just because covered expenses were incurred in a state hospital, if the services would otherwise have been covered.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10176.9. No policy, contract, or agreement coming within the provisions of this article, issued, entered into or renewed on or after July 1, 1984, shall be deemed to contain any provision restricting the liability of the insurer or plan with respect to expenses solely because the expenses were incurred while the person insured was in a state hospital, if the policy, contract, or agreement would have paid for the services but for the fact that they were provided in a state hospital. Nothing in this section shall be deemed to require an insurer or plan to pay a state hospital for covered expenses incurred by an insured or covered individual at a rate or charge higher than the insurer or plan would pay for such services to a hospital with which the insurer or plan has entered a contract providing for alternative rates of payment or limiting payments for services secured by insureds or covered individuals. (Added by Stats. 1983, Ch. 796, Sec. 2. Effective September 14, 1983.)
  118. 10177.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A self-insured employee welfare benefit plan may cover professional mental health expenses, but it cannot bar employees from choosing the listed qualified providers or include a lifetime waiver for mental health coverage in certain nongroup plans.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10177. (a) A self-insured employee welfare benefit plan may provide for payment of professional mental health expenses upon a reimbursement basis, or for the exclusion of those services, and provision may be made therein for payment of all or a portion of the amount of charge for those services without requiring that the employee first pay those expenses. The plan shall not prohibit the employee from selecting any psychologist who is the holder of a certificate issued under Section 2948 of the Business and Professions Code or, upon referral by a physician and surgeon licensed under Section 2135 of the Business and Professions Code, any licensed clinical social worker who is the holder of a license issued under Section 4996 of the Business and Professions Code or any marriage and family therapist who is the holder of a certificate or license under Section 4980.50 of the Business and Professions Code, any professional clinical counselor who is the holder of a license under Chapter 16 (commencing with Section 4999.10) of Division 2 of the Business and Professions Code, or any registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code, who possesses a master’s degree in psychiatric-mental health nursing and is listed as a psychiatric-mental health nurse by the Board of Registered Nursing or any advanced practice registered nurse certified as a clinical nurse specialist pursuant to Article 9 (commencing with Section 2838) of Chapter 6 of Division 2 of the Business and Professions Code who participates in expert clinical practice in the specialty of psychiatric-mental health nursing, to perform the particular services covered under the terms of the plan, the certificate or license holder being expressly authorized by law to perform these services. (b) Nothing in this section shall be construed to allow any certificate holder or licensee enumerated in this section to perform professional services beyond his or her field or fields of competence as established by his or her education, training, and experience. (c) For the purposes of this section: (1) “Marriage and family therapist” shall mean a licensed marriage and family therapist who has received specific instruction in assessment, diagnosis, prognosis, and counseling, and psychotherapeutic treatment of premarital, marriage, family, and child relationship dysfunctions, which is equivalent to the instruction required for licensure on January 1, 1981. (2) “Professional clinical counselor” means a licensed professional clinical counselor who has received specific instruction in assessment, diagnosis, prognosis, counseling, and psychotherapeutic treatment of mental and emotional disorders, which is equivalent to the instruction required for licensure on January 1, 2012. (d) A self-insured employee welfare benefit plan, which is issued, renewed, or amended on or after January 1, 1988, that includes mental health services coverage in nongroup contracts may not include a lifetime waiver for that coverage with respect to any employee. The lifetime waiver of coverage provision shall be deemed unenforceable. (Amended by Stats. 2011, Ch. 381, Sec. 39. (SB 146) Effective January 1, 2012.)
  119. 10177.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    An out-of-state self-insured employee welfare benefit plan cannot be treated as forbidding an insured person from choosing a California-licensed psychologist to provide covered services in California, if the plan is issued in a state that recognizes licensed psychologists for their scope of practice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10177.5. A self-insured employee welfare benefit plan which is written or issued for delivery outside California in a state the laws of which require recognition of psychologists licensed in such state for services performed within the scope of psychological practice shall not be deemed to prohibit the insured from selecting a psychologist licensed in California to perform services in California which are covered under the terms of the policy even though such psychologist is not licensed in the state in which the insurance is written or issued for delivery. (Added by Stats. 1981, Ch. 558, Sec. 3.)
  120. 10177.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A self-insured employee welfare benefit plan cannot stop an insured person from choosing a qualified certificate or license holder to provide covered services, unless federal law preempts state regulation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10177.6. On and after the effective date of this section, a self-insured employee welfare benefit plan shall not prohibit the insured from selecting any person who is the holder of a certificate or license under Section 3055 of the Business and Professions Code to perform the particular services covered under the terms of the plan, such certificate holder or licensee being expressly authorized by law to perform such services. This section shall not apply to any plan governed by federal law which expressly preempts state regulation. (Added by Stats. 1981, Ch. 1032, Sec. 1.)
  121. 10177.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain self-insured group employee welfare plans must offer coverage for diabetic daycare self-management education programs, subject to agreed terms, utilization controls, and physician supervision requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10177.7. On and after January 1, 1982, every self-insured employee welfare benefit plan which is issued, amended, delivered, or renewed that covers hospital, medical, or surgical expenses on a group basis shall offer coverage for diabetic daycare self-management education programs, under such terms and conditions as may be agreed upon between the plan and the group policyholder, subject to utilization controls. Coverage shall only apply to programs directed and supervised by a licensed physician who is board certified in internal medicine or pediatrics. Covered diabetic daycare self-managment and education programs shall be provided by health care professionals including, but not limited to, physicians, registered nurses, registered pharmacists, and registered dietitians who are knowledgeable about the disease process of diabetes and the treatment of diabetic patients. As used in this section, diabetic daycare self-management education programs means instruction which will enable diabetic patients and their families to gain an understanding of the diabetic disease process, and the daily management of diabetic therapy thereby avoiding frequent hospitalizations and complications. Nothing in this section shall be construed to require the offering of programs whose sole or primary purpose is weight reduction. (Added by Stats. 1981, Ch. 750, Sec. 4.)
  122. 10177.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A self-insured employee welfare benefit plan covered by this section cannot be treated as blocking plan members from choosing certain California-licensed providers for covered services in California.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10177.8. (a) A self-insured employee welfare benefit plan doing business in this state and providing coverage that includes California residents but that may be written or issued for delivery outside of California where benefits are provided within the scope of practice of a licensed clinical social worker, a registered nurse licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code who possesses a master’s degree in psychiatric-mental health nursing and two years of supervised experience in psychiatric-mental health nursing, a marriage and family therapist who is the holder of a license under Chapter 13 (commencing with Section 4980) of Division 2 of the Business and Professions Code, or a professional clinical counselor who is the holder of a license under Chapter 16 (commencing with Section 4999.10) of Division 2 of the Business and Professions Code, shall not be deemed to prohibit persons covered under the plan from selecting those licensees in California to perform the services in California that are within the terms of the contract even though the licensees are not licensed in the state where the contract is written or issued. (b) It is the intent of the Legislature in amending this section in the 1984 portion of the 1983–84 Legislative Session that persons covered by the plan and those providers of health care specified in this section who are licensed in California should be entitled to the benefits provided by the plan for services of those providers rendered to those persons. (Amended by Stats. 2011, Ch. 381, Sec. 40. (SB 146) Effective January 1, 2012.)
  123. 10177.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain hospital service and employee benefit plans must not discriminate against licensed dentists based only on the degree they earned.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10177.9. (a) It is the intent of the Legislature that all persons licensed in this state to engage in the practice of dentistry shall be accorded equal professional status and privileges, without regard to the degree earned. (b) Notwithstanding any other provision of law, no nonprofit hospital service plan or self-insured employee welfare benefit plan shall discriminate, with respect to employment, staff privileges, or the provision of, or contracts for, professional services, against a licensed dentist solely on the basis of the educational degree held by the dentist. (Added by Stats. 1991, Ch. 729, Sec. 3.)
  124. 10178.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain insurers and related benefit plans may not deny or reduce coverage for services from qualifying charitable research hospitals just because the patient had no out-of-pocket expense or the hospital does not charge in the absence of insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10178. No admitted insurer, union trust fund which administers health, medical, or surgical insurance, or employer which has an insurance company administering its health services program, shall deny, for the reason that the insured incurred no expense, a claim for hospital, medical or surgical services rendered by a nongovernmental charitable research hospital in this state which makes no charge for its services in the absence of insurance. No expense-incurred, group hospital, medical or surgical policy or certificate or union trust fund which administers health, medical, or surgical insurance, or employer which has an insurance company administering its health services program, shall except, limit or reduce benefits for services rendered by a nongovernmental charitable research hospital because it does not charge for its services in the absence of insurance. No expense-incurred individual hospital, medical or surgical policy or certificate or union trust fund which administers health, medical, or surgical insurance, or employer which has an insurance company administering its health services program, shall except, limit, or reduce benefits for services rendered by a nongovernmental charitable research hospital because it does not charge for its services in the absence of insurance. This section shall apply to every group policy or certificate of expense-incurred hospital, medical, or surgical insurance covering or delivered to a covered individual in this state, notwithstanding the situs of the group master policy pursuant to which the coverage is provided. As used in this section, charitable research hospital means a hospital that meets all the following criteria: (1) Is internationally recognized as devoting itself primarily to medical research. (2) Expends not less than 10 percent of its operating budget in each fiscal year exclusively on medical research activities which are not directly related to the provision of services to patients. (3) Derives not less than one-third of its gross revenues in each fiscal year from contributions, donations, grants, gifts, or other gratuitous forms from individuals, groups, persons, or entities unrelated to the hospital. Contributions, donations, grants, gifts or other gratuitous sources of revenue received as compensation for medical services provided patients shall not be considered for purposes of this subdivision. (4) Accepts patients without regard to the patient’s ability to pay for medical services. (5) Not less than two-thirds of the patients admitted have a primary diagnosis or suspected disease or condition directly related to the specific area or areas in which the hospital conducts research. Patients admitted because of an emergent life-threatening condition who could not be safely transported to another hospital shall not be considered as patients for purposes of this section. (Amended by Stats. 1982, Ch. 579, Sec. 1.)
  125. 10178.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Contracting agents must disclose how provider lists and rates may be sold or used, and payors must explain the network and prove their right to pay contracted rates on request.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10178.3. (a) In order to prevent the improper selling, leasing, or transferring of a health care provider’s contract, it is the intent of the Legislature that every arrangement that results in a payor paying a health care provider a reduced rate for health care services based on the health care provider’s participation in a network or panel shall be disclosed to the provider in advance and that the payor shall actively encourage beneficiaries to use the network, unless the health care provider agrees to provide discounts without that active encouragement. (b) Beginning July 1, 2000, every contracting agent that sells, leases, assigns, transfers, or conveys its list of contracted health care providers and their contracted reimbursement rates to a payor, as defined in subparagraph (A) of paragraph (3) of subdivision (d), or another contracting agent shall, upon entering or renewing a provider contract, do all of the following: (1) Disclose whether the list of contracted providers may be sold, leased, transferred, or conveyed to other payors or other contracting agents, and specify whether those payors or contracting agents include workers’ compensation insurers or automobile insurers. (2) Disclose what specific practices, if any, payors utilize to actively encourage a payor’s beneficiaries to use the list of contracted providers when obtaining medical care that entitles a payor to claim a contracted rate. For purposes of this paragraph, a payor is deemed to have actively encouraged its beneficiaries to use the list of contracted providers if one of the following occurs: (A) The payor’s contract with subscribers or insureds offers beneficiaries direct financial incentives to use the list of contracted providers when obtaining medical care. “Financial incentives” means reduced copayments, reduced deductibles, premium discounts directly attributable to the use of a provider panel, or financial penalties directly attributable to the nonuse of a provider panel. (B) The payor provides information to its beneficiaries, who are parties to the contract, or, in the case of workers’ compensation insurance, the employer, advising them of the existence of the list of contracted providers through the use of a variety of advertising or marketing approaches that supply the names, addresses, and telephone numbers of contracted providers to beneficiaries in advance of their selection of a health care provider, which approaches may include, but are not limited to, the use of provider directories, or the use of toll-free telephone numbers or Internet Web site addresses supplied directly to every beneficiary. However, Internet Web site addresses alone shall not be deemed to satisfy the requirements of this subparagraph. Nothing in this subparagraph shall prevent contracting agents or payors from providing only listings of providers located within a reasonable geographic range of a beneficiary. (3) Disclose whether payors to which the list of contracted providers may be sold, leased, transferred, or conveyed may be permitted to pay a provider’s contracted rate without actively encouraging the payors’ beneficiaries to use the list of contracted providers when obtaining medical care. Nothing in this subdivision shall be construed to require a payor to actively encourage the payor’s beneficiaries to use the list of contracted providers when obtaining medical care in the case of an emergency. (4) Disclose, upon the initial signing of a contract, and within 30 calendar days of receipt of a written request from a provider or provider panel, a payor summary of all payors currently eligible to claim a provider’s contracted rate due to the provider’s and payor’s respective written agreements with any contracting agent. (5) Allow providers, upon the initial signing, renewal, or amendment of a provider contract, to decline to be included in any list of contracted providers that is sold, leased, transferred, or conveyed to payors that do not actively encourage the payors’ beneficiaries to use the list of contracted providers when obtaining medical care as described in paragraph (2). Each provider’s election under this paragraph shall be binding on the contracting agent with which the provider has a contract and any other contracting agent that buys, leases, or otherwise obtains the list of contracted providers. A provider shall not be excluded from any list of contracted providers that is sold, leased, transferred, or conveyed to payors that actively encourage the payors’ beneficiaries to use the list of contracted providers when obtaining medical care, based upon the provider’s refusal to be included on any list of contracted providers that is sold, leased, transferred, or conveyed to payors that do not actively encourage the payors’ beneficiaries to use the list of contracted providers when obtaining medical care. (6) Nothing in this subdivision shall be construed to impose requirements or regulations upon payors, as defined in subparagraph (A) of paragraph (3) of subdivision (d). (c) Beginning July 1, 2000, a payor, as defined in subparagraph (B) of paragraph (3) of subdivision (d), shall do all of the following: (1) Provide an explanation of benefits or explanation of review that identifies the name of the network that has a written agreement signed by the provider whereby the payor is entitled, directly or indirectly, to pay a preferred rate for the services rendered. (2) Demonstrate that it is entitled to pay a contracted rate within 30 business days of receipt of a written request from a provider who has received a claim payment from the payor. The failure of a payor to make the demonstration within 30 business days shall render the payor responsible for the amount that the payor would have been required to pay pursuant to the beneficiary’s policy with the payor, which amount shall be due and payable within 10 business days of receipt of written notice from the provider, and shall bar the payor from taking any future discounts from that provider without the provider’s express written consent until the payor can demonstrate to the provider that it is entitled to pay a contracted rate as provided in this subdivision. A payor shall be deemed to have demonstrated that it is entitled to pay a contracted rate if it complies with either of the following: (A) Discloses the name of the network that has a written agreement with the provider whereby the provider agrees to accept discounted rates, and describes the specific practices the payor utilizes to comply with paragraph (2) of subdivision (b). (B) Identifies the provider’s written agreement with a contracting agent whereby the provider agrees to be included on lists of contracted providers sold, leased, transferred, or conveyed to payors that do not actively encourage beneficiaries to use the list of contracted providers pursuant to paragraph (5) of subdivision (b). (d) For the purposes of this section, the following terms have the following meanings: (1) “Beneficiary” means: (A) For automobile insurance, those persons covered under the medical payments portion of the insurance contract. (B) For group or individual health services covered through a health care service plan contract, including a specialized health care service plan contract, or a policy of disability insurance that covers hospital, medical, or surgical benefits, a subscriber, an enrollee, a policyholder, or an insured. (C) For workers’ compensation insurance, an employee seeking health care services for a work-related injury. (2) “Contracting agent” means an insurer licensed under this code to provide disability insurance that covers hospital, medical, or surgical benefits, automobile insurance, or workers’ compensation insurance, while engaged, for monetary or other consideration, in the act of selling, leasing, transferring, assigning, or conveying a provider or provider panel to provide health care services to beneficiaries. (3) (A) For the purposes of subdivision (b), “payor” means a health care service plan, including a specialized health care service plan, an insurer licensed under this code to provide disability insurance that covers hospital, medical, or surgical benefits, automobile insurance, or workers’ compensation insurance, or a self-insured employer that is responsible to pay for health care services provided to beneficiaries. (B) For the purposes of subdivision (c), “payor” means only an insurer licensed under this code to provide disability insurance that covers hospital, medical, or surgical benefits, or automobile insurance, if that insurer is responsible to pay for health care services provided to beneficiaries. (4) “Payor summary” means a written summary that includes the payor’s name and the type of plan, including, but not limited to, a group health plan, an automobile insurance plan, and a workers’ compensation insurance plan. (5) “Provider” means any of the following: (A) Any person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code. (B) Any person licensed pursuant to the Chiropractic Initiative Act or the Osteopathic Initiative Act. (C) Any person licensed pursuant to Chapter 2.5 (commencing with Section 1440) of Division 2 of the Health and Safety Code. (D) A clinic, health dispensary, or health facility licensed pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code. (E) Any entity exempt from licensure pursuant to Section 1206 of the Health and Safety Code. (e) This section shall become operative on July 1, 2000. (Amended by Stats. 2001, Ch. 159, Sec. 145. Effective January 1, 2002.)
  126. 10178.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    If a contracting agent sells, leases, or transfers a health provider’s contract to a payor, the provider’s rights and obligations are controlled by the underlying contract.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10178.4. (a) When a contracting agent sells, leases, or transfers a health provider’s contract to a payor, the rights and obligations of the provider shall be governed by the underlying contract between the health care provider and the contracting agent. (b) For purposes of this section, the following terms shall have the following meanings: (1) “Contracting agent” has the meaning set forth in paragraph (2) of subdivision (d) of Section 10178.3. (2) “Payor” has the meaning set forth in paragraph (3) of subdivision (d) of Section 10178.3. (Amended by Stats. 2004, Ch. 183, Sec. 246. Effective January 1, 2005.)
  127. 10178.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    Certain self-insured employee welfare benefit plans must include direct reimbursement for covered medical transportation services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10178.5. (a) Every self-insured employee welfare benefit plan issued, amended, or renewed on and after January 1, 1987, that offers coverage for medical transportation services, shall contain a provision providing for direct reimbursement to any provider of covered medical transportation services if the provider has not received payment for those services from any other source. (b) Subdivision (a) shall not apply to any transaction between a provider of medical transportation services and a self-insured employee welfare benefit plan if the parties have entered into a contract providing for direct payment. (c) For purposes of this subdivision, “direct reimbursement” means the following: The insured shall file a claim for the medical transportation service with the plan; the plan shall pay the medical transportation provider directly; and the medical transportation provider shall not demand payment from the insured until having received payment from the plan, at which time the medical transportation provider may demand payment from the insured for any unpaid portion of the provider’s fee. (Added by Stats. 1986, Ch. 930, Sec. 2.)
  128. 10179.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A disability insurer may not refuse to reasonably consider contracts or affiliation with podiatrists just because they are podiatrists.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10179. A disability insurer that offers or provides coverage for any services that are legally within the scope of the practice of podiatric medicine, as defined in Section 2472 of the Business and Professions Code, as a specific plan benefit or otherwise, shall not refuse to give reasonable consideration to negotiating contracts with or affiliation with podiatrists for the provision of service solely on the basis that they are podiatrists. (Amended by Stats. 1992, Ch. 981, Sec. 7. Effective January 1, 1993.)
  129. 1018.

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

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    Recording a qualifying order in a county recorder’s office gives it the same notice effect as recording a deed, bill of sale, or other executed title evidence.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1018. The recording in the office of a county recorder of any county in the State of an order entered pursuant to section 1011, 1016 or 1017 shall impart the same notice that would be imparted by the recordation of a deed, bill of sale or other evidence of title duly executed by such person. (Amended by Stats. 1935, Ch. 291.)
  130. 10180.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. )

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    A disability insurer negotiating alternative-rate contracts with professional providers must give reasonable consideration to timely written proposals from licensed or certified professional providers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Payment and Proceeds [10170 - 10180] ( Article 4 enacted by Stats. 1935, Ch. 145. ) ## 10180. (a) A disability insurer which negotiates and enters into a contract with professional providers to provide services at alternative rates of payment pursuant to Section 10133 of the Insurance Code, shall give reasonable consideration to timely written proposals for contracting by licensed or certified professional providers. (b) For the purposes of this section, the following definitions are applicable: (1) “Reasonable consideration” means consideration in good faith of the terms of proposals for contracting prior to the time that contracts for alternative rates of payment are entered into or renewed. An insurer may specify the terms and conditions of contracting to assure cost efficiency, qualification of providers, appropriate utilization of services, accessibility, convenience to persons who would receive the provider’s services, and consistency with its basic method of operation, but shall not exclude providers because of their category of license. (2) “Professional provider” means a holder of a certificate or license under Division 2 (commencing with Section 500) of the Business and Professions Code, or any initiative act referred to therein, except for those certified or licensed pursuant to Article 3 of Chapter 5 (commencing with Section 2050) or Chapter 11 (commencing with Section 4800), who may, within the scope of their licenses, perform the services of a specific benefit defined in the insurer’s policy. (c) An insurer which has a contract with an institutional provider or with professional providers is not required by this section to give consideration to contracting with professional providers who hold the same category of license or certificate and propose to serve a geographic area served adequately by the contracting providers that provide their professional services as employees or agents of that institutional or professional provider, or contract with that institutional or professional provider to provide professional services. (Added by Stats. 1984, Ch. 977, Sec. 2.)
  131. 10181.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    This section defines terms used in the article on review of rate increases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181. For purposes of this article, the following definitions shall apply: (a) (1) “Blended” means a rating method that combines community rating and experience rating methods. (2) “Community rated” means a rating method in the large group market that bases rates on the expected costs to a health insurer of providing covered benefits to all insureds, including both low-risk and high-risk insureds. Premiums may vary according to the factors in this article. (3) “Experience rated” means a rating method in the large group market under which a health insurer calculates the premiums for a large group in whole or blended based on the group’s prior experience. (b) (1) For individual and small group market products, “geographic region” has the same meaning as in Sections 10753.14 and 10965.9. (2) For large group market products, “geographic region” means one of the following areas, composed of the regions defined in Sections 10753.14 and 10965.9: (A) An area composed of regions 2, 4, 5, 6, 7, and 8, which consist of the Counties of Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma and the City and County of San Francisco. (B) An area composed of regions 1 and 3, which consist of the Counties of Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Placer, Plumas, Sacramento, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne, Yolo, and Yuba. (C) An area composed of regions 9 and 12, which consist of the Counties of Monterey, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz, and Ventura. (D) An area composed of regions 10, 11, and 14, which consist of the Counties of Fresno, Kern, Kings, Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare. (E) An area composed of regions 13 and 17, which consist of the Counties of Imperial, Inyo, Mono, Riverside, and San Bernardino. (F) An area composed of regions 15 and 16, which consist of the County of Los Angeles. (G) An area composed of regions 18 and 19, which consist of the Counties of Orange and San Diego. (c) “Large group health insurance policy” means a group health insurance policy other than a policy issued to a small employer, as defined in Section 10700, 10753, or 10755. (d) “Small group health insurance policy” means a group health insurance policy issued to a small employer, as defined in Section 10700, 10753, or 10755. (e) “PPACA” means Section 2794 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-94), as amended by the federal Patient Protection and Affordable Care Act (Public Law 111-148), and any subsequent rules, regulations, or guidance issued pursuant to that law. (f) “Unreasonable rate increase” has the same meaning as that term is defined in PPACA. (Amended by Stats. 2019, Ch. 807, Sec. 9. (AB 731) Effective January 1, 2020.)
  132. 10181.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    A health insurer must give requested claims data to qualifying large group purchasers each year, but only if the data are deidentified and the purchaser meets the section’s requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.10. (a) (1) A health insurer shall annually provide claims data at no charge to a large group purchaser if the large group purchaser requests the information and otherwise meets the requirements of this section. (2) The health insurer shall provide claims data that a qualified statistician has determined are deidentified so that the claims data do not identify or do not provide a reasonable basis from which to identify an individual. If the statistician is unable to determine that the data has been deidentified, then the data that cannot be deidentified shall not be provided by the health insurer to the large group purchaser. A health insurer may provide the claims data in an aggregated form as necessary to comply with subdivisions (e) and (f). (b) (1) As an alternative to providing claims data required pursuant to subdivision (a), the insurer shall provide, at no charge to a large group purchaser, all of the following: (A) Deidentified data sufficient for the large group purchaser to calculate the cost of obtaining similar services from other health insurers and plans and evaluate cost-effectiveness by service and disease category. (B) Deidentified aggregated patient-level data on demographics, prescribing, encounters, inpatient services, outpatient services, and any other data that is comparable to what is required of the health insurer to comply with risk adjustment, reinsurance, or risk corridors pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued thereunder. (C) Deidentified aggregated patient-level data used to experience rate the large group, including diagnostic and procedure coding and costs assigned to each service that the insurer has available. (2) The health insurer shall obtain a formal determination from a qualified statistician that the data provided pursuant to this subdivision have been deidentified so that the data do not identify or do not provide a reasonable basis from which to identify an individual. If the statistician is unable to determine that the data has been deidentified, the health insurer shall not provide the data that cannot be deidentified to the large group purchaser. The statistician shall document the formal determination in writing and shall, upon request, provide the protocol used for deidentification to the department. (c) Data provided pursuant to this section shall only be provided to a large group purchaser that meets both of the following conditions: (1) Is able to demonstrate its ability to comply with state and federal privacy laws. (2) Is a large group purchaser that is either an employer with an enrollment of greater than 1,000 covered lives and at least 500 covered lives enrolled with the health insurer providing the information or a multiemployer trust with an enrollment of greater than 500 covered lives and at least 250 covered lives enrolled with the health insurer providing the information. (d) Nothing in this section shall be construed to prohibit an insurer and purchaser from negotiating the release of additional information not described in this section. (e) All disclosures of data to the large group purchaser made pursuant to this section shall comply with the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191) and the federal Health Information Technology for Economic and Clinical Health Act, Title XIII of the federal American Recovery and Reinvestment Act of 2009 (Public Law 111-5), and implementing regulations. (f) All disclosures of data to the large group purchaser made pursuant to this section shall comply with the Insurance Information and Privacy Protection Act (Chapter 1 (commencing with Section 791) of Part 2 of Division 1 of the Insurance Code). (Added by Stats. 2014, Ch. 577, Sec. 6. (SB 1182) Effective January 1, 2015.)
  133. 10181.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    The department may review certain rate filings, and must post or report specified rate-related information on its website and to the Legislature.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.11. (a) Whenever it appears to the department that any person has engaged, or is about to engage, in any act or practice constituting a violation of this article, including the filing of inaccurate or unjustified rates or inaccurate or unjustified rate information, the department may review rate filing to ensure compliance with the law. (b) The department may review other filings. (c) The department shall accept and post to its Internet Web site any public comment on a rate increase submitted to the department during the applicable period described in subdivision (d) of Section 10181.7. (d) The department shall report to the Legislature at least quarterly on all unreasonable rate filings. (e) The department shall post on its Internet Web site any changes submitted by the insurer to the proposed rate increase, including any documentation submitted by the insurer supporting those changes. (f) If the commissioner makes a decision that an unreasonable rate increase is not justified or that a rate filing contains inaccurate information, the department shall post that decision on its Internet Web site. (g) Nothing in this article shall be construed to impair or impede the department’s authority to administer or enforce any other provision of this code. (Amended by Stats. 2016, Ch. 498, Sec. 9. (SB 908) Effective January 1, 2017.)
  134. 10181.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    The department must provide specified rate-trend data to the U.S. Secretary of Health and Human Services and, once the Exchange is created, provide whatever information is needed to support compliance with federal requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.13. The department shall do all of the following in a manner consistent with applicable federal laws, rules, and regulations: (a) Provide data to the United States Secretary of Health and Human Services on health insurer rate trends in premium rating areas. (b) Commencing with the creation of the Exchange, provide to the Exchange such information as may be necessary to allow compliance with federal law, rules, regulations, and guidance. (Added by Stats. 2010, Ch. 661, Sec. 7. (SB 1163) Effective January 1, 2011.)
  135. 10181.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    This section requires certain health insurers covering dental services to file detailed rate information with the department and answer information requests on time.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.14. (a) This section shall apply only to a specialized health insurance policy covering dental services, as defined in Section 10120.41. (b) On or after January 1, 2025, and at least annually thereafter, a health insurer shall file with the department the information required by this article, as applicable, including, but not limited to, all of the following: (1) Type of insurer involved, such as for profit or not for profit. (2) Product type. (3) Whether the products are opened or closed. (4) Annual rate. (5) Total earned premiums in each policy form. (6) Total incurred claims in each policy form. (7) Review category: initial filing for new product, filing for existing product, or resubmission. (8) Average rate of increase. (9) Effective date of rate increase. (10) Number of policyholders or insureds affected by each policy form. (11) A comparison of claims cost and rate changes over time. (12) Any changes in insured cost sharing over the prior year associated with the submitted rate filing. (13) Any changes in insured benefits over the prior year associated with the submitted rate filing. (14) Any changes in administrative costs. (15) Variation in trend, by geographic region, if the insurer serves more than one geographic region. (16) The loss ratio for the policy as described in Section 10112.26 and the lifetime loss ratio as described in the regulations adopted pursuant to Section 10293. (17) Proposed and effective rates for all products. (18) A rating manual that outlines the methodology used in the development of the premium rates, along with a description of how rates were determined. (19) The base rate or rates and the factors used to determine the base rate or rates. (20) Trend, including overall average, and by-product, if different. (21) Any other factors affecting dental premium rates. (22) An actuarial certification signed by a qualified actuary. (23) Any other information required for the department to make its determination. (c) (1) The health insurer shall file with the department the required information at least 120 days before any change in the methodology, factors, or assumptions that would affect rates. (2) A health insurer shall respond to the department’s request for any additional information necessary for the department to complete its review of the health insurer’s rate filing for individual and group health insurance policies within five business days of the department’s request or as otherwise required by the department. (3) If a health insurer fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a health insurer’s rate change is unreasonable or not justified. (4) If the department determines that a health insurer’s rate change for individual or group health insurance policies is unreasonable or not justified consistent with this article, the health insurer shall provide notice of that determination to an individual or group applicant or policyholder. (5) The department may contract with a consultant or consultants with expertise to assist the department in its review. Contracts entered into pursuant to the authority in this article shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, and the State Contract Act (Chapter 1 (commencing with Section 10100) of Part 2 of Division 2 of the Public Contract Code). (d) For all health insurers covering dental services, the department shall issue a determination that the health insurer’s rate change is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination. The determination by the department shall also apply to the methodology, factors, and assumptions used to determine rates. (e) The department may review the rate filings to ensure compliance with the law, as described in Section 10181.11, excluding subdivision (c). (f) The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners’ System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section. (g) (1) The department may adopt emergency regulations implementing this section. The initial adoption of emergency regulations implementing this section and the readoption of emergency regulations authorized by this subdivision shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. (2) On or before July 1, 2024, the commissioner may issue guidance to health insurers regarding compliance with this section. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (3) The department shall consult with the Department of Managed Health Care when issuing guidance on adopting necessary regulations pursuant to this subdivision. (Added by Stats. 2023, Ch. 557, Sec. 6. (AB 1048) Effective January 1, 2024.)
  136. 10181.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    This article applies to certain health insurance policies in California, including dental coverage, and excludes several listed policy types.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.2. This article shall apply to a health insurance policy offered in the individual or group market in California, including a health insurance policy covering dental services and a specialized health insurance policy covering dental services. However, this article shall not apply to a nondental specialized health insurance policy, a Medicare supplement policy subject to Article 6 (commencing with Section 10192.1), a health insurance policy offered in the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code), a health insurance policy offered in the California Major Risk Medical Insurance Program (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code), a health insurance conversion policy offered pursuant to Section 12682.1, a health insurance policy offered to a federally eligible defined individual under Chapter 9.5 (commencing with Section 10900), or a Mexican prepaid health plan subject to Section 1351.2 of the Health and Safety Code. (Amended by Stats. 2023, Ch. 557, Sec. 5. (AB 1048) Effective January 1, 2024.)
  137. 10181.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    Health insurers must file and disclose detailed rate information to the department on set timelines, and the department may review filings, require extra information, and issue determinations on whether rate changes are unreasonable or not justified.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.3. (a) (1) A health insurer shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered group health insurance policies at least 120 days before implementing any rate change. (2) A health insurer shall file with the department all required rate information for nongrandfathered individual health insurance policies on the earlier of the following dates: (A) One hundred days before the commencement of the annual enrollment period of the preceding policy year. (B) The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations. (3) For large group products that are either experience rated, in whole or blended, or community rated, a health insurer shall file the information required by this article at least annually and shall file 120 days before any change in the methodology, factors, or assumptions that would affect the rates paid by a large group. (b) An insurer shall disclose to the department all of the following for each rate filing for products in the individual, small group, community-rated segment of the large group market, and experience-rated segment, in whole or blended, in the large group market: (1) Company name and contact information. (2) Number of policy forms covered by the filing. (3) Policy form numbers covered by the filing. (4) Product type, such as indemnity or preferred provider organization. (5) Segment type. (6) Type of insurer involved, such as for profit or not for profit. (7) Whether the products are opened or closed. (8) Enrollment in each policy and rating form. (9) Insured months in each policy form. (10) Annual rate. (11) Total earned premiums in each policy form. (12) Total incurred claims in each policy form. (13) Average rate increase initially requested. (14) Review category: initial filing for new product, filing for existing product, or resubmission. (15) Average rate of increase. (16) Effective date of rate increase. (17) Number of policyholders or insureds affected by each policy form. (18) A comparison of claims cost and rate of changes over time. (19) Any changes in insured cost sharing over the prior year associated with the submitted rate filing. (20) Any changes in insured benefits over the prior year associated with the submitted rate filing. (21) The certification described in subdivision (b) of Section 10181.6. (22) Any changes in administrative costs. (23) Any other information required for rate review under PPACA. (c) A health insurer subject to subdivision (a) shall disclose the following by geographic region for individual, grandfathered group, and nongrandfathered group policies: (1) The insurer’s overall annual medical trend factor assumptions for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. The insurer shall also disclose integrated care management fees or other similar fees, as well as reclassification of services from one benefit category to another, such as from inpatient to outpatient. (2) Aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories. (3) Information by benefit category that demonstrates the price paid compared to the price paid by the Medicare Program for the same services. (4) Variation in trend, by geographic region, if the insurer serves more than one geographic region. (d) A health insurer subject to subdivision (a) shall disclose, by geographic region for individual, grandfathered group, and nongrandfathered group policies, the amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual policy trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. (e) An insurer subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and group health insurance markets: (1) Number and percentage of rate filings reviewed by the following: (A) Plan year. (B) Segment type. (C) Product type. (D) Number of policyholders. (E) Number of covered lives affected. (2) The insurer’s average rate increase by the following categories: (A) Plan year. (B) Segment type. (C) Product type. (3) Any cost containment and quality improvement efforts since the insurer’s last rate filing for the same category of health benefit plan. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period. If rate filings in a prior year or years included a description of cost containment or quality improvement efforts, the insurer shall document the effects of those efforts, if any, including the impact on rates and documented improvements in quality, such as reduction of readmissions, reduction of emergency room use, or other recognized measures of quality improvement. (f) For large group experience-rated, in whole or blended, and community-rated filings, the insurer shall also submit the following: (1) The geographic regions used. (2) Age, including age rating factors. (3) Industry or occupation adjustments. (4) Family composition. (5) Insured cost sharing. (6) Covered benefits in addition to basic health care services, as defined in subdivision (b) of Section 1345 of the Health and Safety Code, and other benefits mandated by this article. (7) The base rate or rates and the factors used to determine the base rate or rates. (8) Whether benefits, including prescription drugs, dental, and vision, are separately contracted. (9) Variations in covered benefits, including durable medical equipment, infertility, and other similar benefits. (10) Cost-sharing variations, described with actuarial value ranges and any expected impact on rates. (11) Any other factor that affects the community rating. (g) For large group filings that are experience rated, either in whole or blended, the insurer shall submit the methodology for modifying the rate based on experience. (h) (1) The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners’ System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section. (2) If California-specific information is required, the department may require additional schedules or documents. (i) A health insurer shall submit any other information required under PPACA. A health insurer shall also submit any other information required pursuant to a regulation adopted by the department to comply with this article. (j) (1) A health insurer shall respond to the department’s request for any additional information necessary for the department to complete its review of the health insurer’s rate filing for individual and group health insurance policies under this article within five business days of the department’s request or as otherwise required by the department. (2) Except as provided in paragraph (3), the department shall determine whether a health insurer’s rate change for individual and small group insurance policies is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination. For both experience-rated, in whole or blended, and community-rated large groups, the department shall determine whether the methodology, factors, and assumptions used to determine rates are unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination. (3) For all nongrandfathered individual health insurance policies, the department shall issue a determination that the health insurer’s rate change is unreasonable or not justified no later than 15 days before the start of the next annual enrollment period. If a health insurer fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a health insurer’s rate change is unreasonable or not justified. (4) The department may contract with a consultant or consultants with expertise to assist the department in its review. Contracts entered into pursuant to the authority in this article shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, and the State Contract Act (Chapter 1 (commencing with Section 10100) of Part 2 of Division 2 of the Public Contract Code). (k) If the department determines that a health insurer’s rate change for individual or group health insurance policies is unreasonable or not justified consistent with this article, the health insurer shall provide notice of that determination to any individual or group applicant. For both experience-rated, in whole or blended, and community-rated large groups, the determination by the department shall apply to methodology, factors, and assumptions used to determine rates. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 10113.9. The notice provided to a group applicant shall be consistent with the notice described in subdivision (d) of Section 10199.1. (l) Failure to provide the information required by subdivision (b), (c), (d), (e), (f), or (g) shall constitute an unjustified rate. (m) For purposes of this section, “policy year” has the same meaning as set forth in subdivision (g) of Section 10965. (n) (1) The department may adopt emergency regulations implementing this section. The department may, on a one-time basis, readopt an emergency regulation authorized by this section that is the same as, or substantially equivalent to, an emergency regulation previously adopted under this section. (2) The initial adoption of emergency regulations implementing this section and the readoption of emergency regulations authorized by this subdivision shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. The initial emergency regulations and the readoption of emergency regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and each shall remain in effect for no more than 180 days, by which time final regulations may be adopted. (o) The amendments made to this section by Chapter 807 of the Statutes of 2019 (Assembly Bill 731 of the 2019–20 Regular Session) shall become operative on July 1, 2020. (Amended by Stats. 2020, Ch. 370, Sec. 219. (SB 1371) Effective January 1, 2021.)
  138. 10181.31.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    A large group contractholder meeting the stated criteria may ask the department to review a rate change within 60 days of notice, and the insurer must provide requested information for that review.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.31. (a) Upon receiving notice of a rate change, a large group contractholder that has coverage that is experience rated in whole or blended and that meets the criteria in subdivision (e), may apply within 60 days to have the department review the rate change to determine whether the rate change is unreasonable or not justified, consistent with this article. (b) Upon receiving an application, the department shall notify the health insurer of the application, and the insurer shall provide the information required by the department to complete the department’s review of the proposed rate within five business days of the department’s request or as otherwise required by the department. (c) The department shall use reasonable efforts to complete its review of the rate change within 60 days of receiving all the information the department requires to make its determination, and shall notify the health insurer and the large group contractholder of its determination. (d) A rate change under review by the department shall not be imposed before a determination is made by the department pursuant to subdivision (c) or within 60 days following receipt by the department of all information the department requires to make its determination, whichever occurs earlier. (e) To apply for a review of a rate change for a particular group, at least one of the following shall apply: (1) The contractholder has more than 2,000 total insureds. (2) The insurer failed to provide the information required by this article or Section 10181.10. (f) To facilitate review, the department may group appeals that apply to the same health insurer and that raise similar questions about rates, methodology, assumptions, or factors. (g) The department may contract with a consultant or consultants with expertise to assist the department in its review. Contracts entered into pursuant to the authority in this article shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, and the State Contract Act (Chapter 1 (commencing with Section 10100) of Part 2 of Division 2 of the Public Contract Code). (h) This section shall become operative on July 1, 2021. (Added by Stats. 2019, Ch. 807, Sec. 12. (AB 731) Effective January 1, 2020. Section operative July 1, 2021, by its own provisions.)
  139. 10181.35.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    A health insurer submitting rates for review must show how changes in health care cost growth affect the rates, and the commissioner must consider that impact when deciding whether a rate is unreasonable or not justified.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.35. (a) It is the intent of the Legislature in enacting this section to ensure that insureds benefit from reductions in the rate of growth in health care costs as a result of the establishment of the Office of Health Care Affordability. (b) In submitting rates for review consistent with this article, a health insurer shall demonstrate the impact of any changes in the rate of growth in health care costs resulting from the health care cost targets set pursuant to Chapter 2.6 (commencing with Section 127500) of Part 2 of Division 107 of the Health and Safety Code. (c) In determining whether a rate is unreasonable or not justified, the commissioner shall consider the impact on changes in health care costs as a result of the health care cost targets set pursuant to Chapter 2.6 (commencing with Section 127500) of Part 2 of Division 107 of the Health and Safety Code. (Added by Stats. 2022, Ch. 47, Sec. 34. (SB 184) Effective June 30, 2022.)
  140. 10181.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    Health insurers filing large group rate changes must submit required rate information to the department at least 60 days before implementation and provide specified disclosures.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.4. (a) For large group health insurance policies, all health insurers shall file with the department at least 60 days prior to implementing any rate change all required rate information for unreasonable rate increases. This filing shall be concurrent with the written notice described in Section 10199.1. (b) For large group rate filings, health insurers shall submit all information that is required by PPACA. A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article. (c) A health insurer subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the large group health insurance market: (1) Number and percentage of rate filings reviewed by the following: (A) Plan year. (B) Segment type. (C) Product type. (D) Number of insureds. (E) Number of covered lives affected. (2) The insurer’s average rate increase by the following categories: (A) Plan year. (B) Segment type. (C) Product type. (3) Any cost containment and quality improvement efforts since the health insurer’s last rate filing for the same category of health insurance policy. To the extent possible, the health insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period. (d) The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners’ System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section. (Added by Stats. 2010, Ch. 661, Sec. 7. (SB 1163) Effective January 1, 2011.)
  141. 10181.45.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    Health insurers handling large group health insurance policies must file rate-increase information with the department and provide specified related disclosures. The department must also hold a public meeting every even-numbered year and within four months of posting the aggregate information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.45. (a) For large group health insurance policies, a health insurer shall file with the department the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. The average shall be weighted by the number of insureds in each large group benefit design in the insurer’s large group market and adjusted to the most commonly sold large group benefit design by enrollment during the 12-month period. For the purposes of this section, the large group benefit design includes, but is not limited to, benefits such as basic health care services and prescription drugs. The large group benefit design shall not include cost sharing, including, but not limited to, deductibles, copays, and coinsurance. (b) (1) A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article. (2) The department shall conduct a public meeting in every even-numbered year regarding large group rates within four months of posting the aggregate information described in this section in order to permit a public discussion of the reasons for the changes in the rates, benefits, and cost sharing in the large group market. The meeting shall be held in either the Los Angeles area or the San Francisco Bay area. (c) A health insurer subject to subdivision (a) shall also disclose the following for the aggregate rate information for the large group market submitted under this section: (1) For rates effective during the 12-month period ending January 1 of the following year, number and percentage of rate changes reviewed by the following: (A) Plan year. (B) Segment type, including whether the rate is community rated, in whole or in part. (C) Product type. (D) Number of insureds. (E) The number of products sold that have materially different benefits, cost sharing, or other elements of benefit design. (2) For rates effective during the 12-month period ending January 1 of the following year, any factors affecting the base rate, and the actuarial basis for those factors, including all of the following: (A) Geographic region. (B) Age, including age rating factors. (C) Occupation. (D) Industry. (E) Health status factors, including, but not limited to, experience and utilization. (F) Employee, and employee and dependents, including a description of the family composition used. (G) Insureds’ share of premiums. (H) Insureds’ cost sharing, including cost sharing for prescription drugs. (I) Covered benefits in addition to basic health care services, as defined in Section 1345 of the Health and Safety Code, and other benefits mandated under this article. (J) Which market segment, if any, is fully experience rated and which market segment, if any, is in part experience rated and in part community rated. (K) Any other factor that affects the rate that is not otherwise specified. (3) (A) The insurer’s overall annual medical trend factor assumptions for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology for the applicable 12-month period ending January 1 of the following year. (B) The amount of the projected trend separately attributable to the use of services, price inflation, and fees and risk for annual policy trends by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. (C) A comparison of the aggregate per insured per month costs and rate of changes over the last five years for each of the following: (i) Premiums. (ii) Claims costs, if any. (iii) Administrative expenses. (iv) Taxes and fees. (D) Any changes in insured cost sharing over the prior year associated with the submitted rate information, including both of the following: (i) Actual copays, coinsurance, deductibles, annual out of pocket maximums, and any other cost sharing by the benefit categories determined by the department. (ii) Any aggregate changes in insured cost sharing over the prior years as measured by the weighted average actuarial value, weighted by the number of insureds. (E) Any changes in insured benefits over the prior year, including a description of benefits added or eliminated as well as any aggregate changes as measured as a percentage of the aggregate claims costs, listed by the categories determined by the department. (F) Any cost containment and quality improvement efforts made since the insurer’s prior year’s information pursuant to this section for the same category of health insurer. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period. (G) The number of products covered by the information that incurred the excise tax paid by the health insurer. (4) (A) For covered prescription generic drugs excluding specialty generic drugs, prescription brand name drugs excluding specialty drugs, and prescription brand name and generic specialty drugs dispensed at a pharmacy, network pharmacy, or mail order pharmacy for outpatient use, all of the following shall be disclosed: (i) The percentage of the premium attributable to prescription drug costs for the prior year for each category of prescription drugs as defined in this subparagraph. (ii) The year-over-year increase, as a percentage, in per-member, per-month total health insurer spending for each category of prescription drugs as defined in this subparagraph. (iii) The year-over-year increase in per-member, per-month costs for drug prices compared to other components of the health care premium. (iv) The specialty tier formulary list. (B) The insurer shall include the percentage of the premium attributable to prescription drugs administered in a doctor’s office that are covered under the medical benefit as separate from the pharmacy benefit, if available. (C) (i) The insurer shall include information on its use of a pharmacy benefit manager, if any, including which components of the prescription drug coverage described in subparagraphs (A) and (B) are managed by the pharmacy benefit manager. (ii) The insurer shall also include the name or names of the pharmacy benefit manager, or managers if the insurer uses more than one. (d) The information required pursuant to this section shall be submitted to the department on or before October 1, 2016, and on or before October 1 annually thereafter. Information submitted pursuant to this section is subject to Section 10181.7. (e) For the purposes of this section, a “specialty drug” is one that exceeds the threshold for a specialty drug under the Medicare Part D program (Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173)). (Amended by Stats. 2020, Ch. 184, Sec. 41. (SB 1255) Effective January 1, 2021.)
  142. 10181.46.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    Health insurers (other than specialized health insurance policies) must file annual reports with the department about specified premium, cost-sharing, benefit-design, enrollment, and rate-change information for individual and small group products.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.46. (a) A health insurer, not including a specialized health insurance policy, shall annually report to the department the information described in subdivision (c) for all grandfathered and nongrandfathered products that the insurer offers and sells in the individual market, including both on-exchange and off-exchange enrollment, for rates effective during the 12-month period ending January 1 of the following year. (b) A health insurer, not including a specialized health insurance policy, shall annually report to the department the information described in subdivision (c) for all grandfathered and nongrandfathered products that the insurer offers and sells in the small group market, including both on-exchange and off-exchange enrollment, for products with rates effective during that 12-month period ending January 1 of the following year. (c) (1) Information on premiums, including share of premium, if applicable, average premium weighted by enrollment, and weighted average rate change. (2) Cost sharing, including deductibles, maximum out-of-pocket limit, copayments, coinsurance and any other cost sharing for covered benefits as well as high deductible health policies. (3) (A) For nongrandfathered policies, essential health benefits and basic health care services. (B) For grandfathered policies, covered benefits, including mandates, if any. (4) Standard and nonstandard benefit designs, including on-exchange and off-exchange nonstandard benefit designs. (5) Enrollment by actuarial value tier, product, benefit design and premiums, including both of the following: (A) Enrollment in products with zero deductibles, high deductibles as defined in this section, and deductibles between zero and high. (B) (i) Enrollment by premium. (ii) For small group products, enrollment by share of premium. (6) Trend factors as reported in individual and small group rate filings for the health insurer, including both price and utilization, as required in Section 10181.3. (d) By October 1, 2021, and annually thereafter, a health insurer shall submit the annual report, as described under subdivision (a), to the department in a form and manner determined by the department. (e) Beginning in 2022, the department shall annually present the information reported under this section in the meeting specified in Section 10181.45 or at any other public meeting the department deems appropriate. The department also shall post the information reported under this section on its internet website no later than December 15 of each year. (f) For purposes of this section, the following definitions apply: (1) “Average premium weighted by enrollment” means both of the following: (A) For the individual market, the average premium shall be weighted by the number of individual insureds in the insurer’s individual market during the 12-month period. (B) For the small group market, the average premium shall be weighted by the number of insureds in each small group benefit design in the insurer’s small group market during the 12-month period. (2) “Benefit design” means the cost sharing for covered benefits. (3) “High deductible” has the same meaning as defined in Section 223(c)(2)(A) of Title 26 of the United States Code. (4) “Nonstandard benefit design” means a benefit design other than the standard benefit design. (5) “Share of premium” means the share of premium paid by the insured on behalf of the insured and any dependents, not the employer. (6) “Standard benefit design” means the standardized products approved by the executive board of the California Health Benefit Exchange pursuant to subdivision (c) of Section 100504 of the Government Code. (g) Until January 1, 2023, a health insurer shall not be required to report either of the following information: (1) Share of premium paid by insured. (2) Enrollment by benefit design, deductible, or share of premium. (h) The commissioner may issue guidance to health insurers regarding compliance with this section. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until January 1, 2024. (Added by Stats. 2020, Ch. 277, Sec. 2. (AB 2118) Effective January 1, 2021.)
  143. 10181.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    The department may request from a health insurer any information required under this article or PPACA, even if a health insurer-provider contract says otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.5. Notwithstanding any provision in a contract between a health insurer and a provider, the department may request from a health insurer any information required under this article or PPACA. (Added by Stats. 2010, Ch. 661, Sec. 7. (SB 1163) Effective January 1, 2011.)
  144. 10181.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    Rate-filing submissions must be actuarially sound and include independent actuarial certification; the health insurer must use an independent actuary, and the commissioner is not authorized here to set rates for covered health care services.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.6. (a) A filing submitted under this article shall be actuarially sound. (b) (1) The health insurer shall contract with an independent actuary or actuaries consistent with this section. (2) A filing submitted under this article shall include a certification by an independent actuary or actuarial firm that the rate increase is reasonable or unreasonable and, if unreasonable, that the justification for the increase is based on accurate and sound actuarial assumptions and methodologies. Unless PPACA requires a certification of actuarial soundness for each large group health insurance policy, a filing submitted under Section 10181.4 shall include a certification by an independent actuary, as described in this section, that the aggregate or average rate increase is based on accurate and sound actuarial assumptions and methodologies. (3) The actuary or actuarial firm acting under paragraph (2) shall not be an affiliate or a subsidiary of, nor in any way owned or controlled by, a health insurer or a trade association of health insurers. A board member, director, officer, or employee of the actuary or actuarial firm shall not serve as a board member, director, or employee of a health insurer. A board member, director, or officer of a health insurer or a trade association of health insurers shall not serve as a board member, director, officer, or employee of the actuary or actuarial firm. (c) Nothing in this article shall be construed to permit the commissioner to establish the rates charged insureds and policyholders for covered health care services. (Added by Stats. 2010, Ch. 661, Sec. 7. (SB 1163) Effective January 1, 2011.)
  145. 10181.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    The department must publicly release most rate-review information, but certain contracted rates and related information are confidential and may not be disclosed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.7. (a) Notwithstanding Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code, all information submitted under this article shall be made publicly available by the department except as provided in subdivision (b). (b) (1) The contracted rates between a health insurer and a provider shall be deemed confidential information that shall not be made public by the department and are exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). The contracted rates between a health insurer and a provider shall not be disclosed by a health insurer to a large group purchaser that receives information pursuant to Section 10181.10. (2) The contracted rates between a health insurer, including those submitted to the department pursuant to Section 10181.31, and a large group shall be deemed confidential information that shall not be made public by the department and are exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Information provided to a large group purchaser pursuant to Section 10181.10 shall be deemed confidential information that shall not be made public by the department and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (c) All information submitted to the department under this article shall be submitted electronically in order to facilitate review by the department and the public. (d) In addition, the department and the health insurer shall, at a minimum, make the following information readily available to the public on their internet websites in plain language and in a manner and format specified by the department, except as provided in subdivision (b). For individual and small group health insurance policies, the information shall be made public for 120 days prior to the implementation of the rate increase. For large group health care insurance policies, the information shall be made public for 60 days prior to the implementation of the rate increase. The information shall include: (1) Justifications for any unreasonable rate increases, including all information and supporting documentation as to why the rate increase is justified. (2) An insurer’s overall annual medical trend factor assumptions in each rate filing for all benefits. (3) An insurer’s actual costs, by aggregate benefit category to include, hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. (4) The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual policy trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. (Amended by Stats. 2021, Ch. 615, Sec. 310. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  146. 10181.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    A health insurance policy subject to Sections 10181.3 or 10181.4 must file a separate schedule showing the cost savings linked to Section 10176.11 and the effect on rates.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.8. A health insurance policy subject to Section 10181.3 or 10181.4 shall file a separate schedule documenting the cost savings associated with Section 10176.11 and the impact on rates. (Added by Stats. 2019, Ch. 862, Sec. 6. (AB 290) Effective January 1, 2020.)
  147. 10181.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. )

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    The commissioner may issue compliance guidance to health insurers by July 1, 2012, and that guidance is not subject to the Administrative Procedure Act. The department must consult with the Department of Managed Health Care when issuing guidance and when taking related implementation steps.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4.5. Review of Rate Increases [10181 - 10181.14] ( Article 4.5 added by Stats. 2010, Ch. 661, Sec. 7. ) ## 10181.9. (a) On or before July 1, 2012, the commissioner may issue guidance to health insurers regarding compliance with this article. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (b) The department shall consult with the Department of Managed Health Care in issuing guidance under subdivision (a), in adopting necessary regulations, in posting information on its Internet Web site under this article, and in taking any other action for the purpose of implementing this article. (Added by Stats. 2010, Ch. 661, Sec. 7. (SB 1163) Effective January 1, 2011.)
  148. 1019.

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

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    If a liquidation order is issued under section 1016, the rights and liabilities of the listed parties are fixed as of the date the order is entered, unless the court directs otherwise.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1019. Upon the issuance of an order of liquidation under section 1016, the rights and liabilities of any such person and of creditors, policyholders, shareholders and members, and all other persons interested in its assets, including the State of California, shall, unless otherwise directed by the court, be fixed as of the date of the entry of the order in the office of the clerk of the county wherein the application was made. (Amended by Stats. 1939, Ch. 934.)
  149. 10190.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. )

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    Sections 800 to 804 do not apply to life insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. ) ## 10190. The provisions of Sections 800, 801, 802, 803, and 804 shall not apply to life insurance. (Amended by Stats. 1980, Ch. 676, Sec. 189.)
  150. 10191.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. )

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    The commissioner may set up and update rules for filing and approving insurance documents before they are issued, delivered, or used in the state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. ) ## 10191. (a) The commissioner may, from time to time as conditions warrant, after notice and hearing, promulgate such reasonable rules and regulations, and amendments and additions thereto, as are necessary or advisable, to establish and maintain a procedure for the filing and approval of documents, as defined in this section, prior to their issuance, delivery, or use in this state, in lieu of the requirements of submission, filing, or approval for the documents presently provided in Section 10205, 10205.5, 10205.6, 10225, 10270, 10270.1, 10270.57, 10270.9, 10270.91, 10270.92, 10270.93, 10290, 10292, 11066, 11069, 11513, 11513.1, 11513.2, 11515, or 11658. For purposes of this section, “document” includes, but is not limited to, every form of contract, insurance policy, application, rider, endorsement, amendment, insert policy page, certificate, or other evidence or notice of insurance, fill-in material, schedules of rates and classifications of risks, and any modification to any document, which is subject to the requirements of any of the enumerated sections. (b) Any such rule or regulation shall be promulgated in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (c) In promulgating any such rule or regulation, the commissioner may give consideration to the following circumstances: (1) Whether all such documents, the submission, filing, or approval of which is governed by any of the foregoing enumerated sections, or only a portion thereof described in the rule or regulation, shall be subject thereto. (2) Whether certain documents or portions thereof should be regulated in respect of submission, filing, or approval in a fashion differing from similar requirements applicable to other documents. (3) Whether varying procedures may be made applicable among admitted insurers in respect of the submission, filing or approval predicated, in whole or in part, upon such factors as the age and size of the submitting insurer, the period of its licensing in this state for the class or classes of insurance represented by the documents, the nature and number of prior submissions of similar documents and the disposition thereof by the commissioner, and similar criteria which is relevant to a determination that the submitting insurer has demonstrated compliance with all applicable statutes, rules, and regulations relating to documents comprising prior submissions. (d) In promulgating any such rules and regulations, the commissioner shall, so far as practical, describe or define certain provisions: (1) which the commissioner will authorize without review when accompanied by a certification prescribed by him or her by rule, and (2) which the commissioner will under no circumstances approve. (e) The commissioner shall establish a period of time, not shorter than one year, during which any change in the provisions which pursuant to subdivision (d), he or she has provided he or she will under no circumstances approve, will not apply to policies filed prior to the effective date of the change. (f) Except as otherwise provided in this section any document approved by the commissioner pursuant to rules and regulations authorized by this section may have its approval withdrawn in accordance with subdivision (d) of Section 10291.5 or Section 12957, whichever is applicable. (Amended by Stats. 1985, Ch. 106, Sec. 95.)
  151. 10191.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. )

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    The commissioner may publish file-review materials for life and disability insurance forms, and the department must use a published expanded cover letter to document compliance with those standards.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. ) ## 10191.1. (a) In order to streamline the department’s file review process for life and disability insurance forms, the commissioner may develop and publish all of the following: (1) Procedural requirements for file submission. (2) Guidelines and checklists that list and interpret applicable required and optional insurance statutes and regulations. (3) Standard insurance contract language previously approved by the department. (b) Documented use of the published standards described in paragraphs (1) to (3), inclusive, of subdivision (a) will enable the department to expedite its review process. In order to expedite file review, an expanded cover letter, in a format published by the department, shall be used to clearly document and demonstrate compliance with those standards. (c) A publication developed pursuant to this section shall be made available on a dedicated page of the department’s Internet Web site. (Added by Stats. 2015, Ch. 691, Sec. 1. (AB 387) Effective January 1, 2016.)
  152. 10191.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. )

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    The commissioner must request a study about whether certain interstate insurance standards provide consumer protections equivalent to state law, then submit the study to legislative insurance committee chairpersons. The commissioner may review the final study and add written comments. No General Fund or Insurance Fund money may be used to implement this section.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. ) ## 10191.5. (a) (1) The commissioner shall request that a multistate regulatory support organization commission a study to examine and report on the extent to which the uniform standards set forth in the Interstate Insurance Product Regulation Compact developed by the Interstate Insurance Product Regulation Commission provide consumer protections that are equivalent to those established under state law for annuity, life, disability income, and long-term care insurance products. (2) The commissioner’s request for the study described in paragraph (1) shall include a request that the study be completed no later than January 1, 2017, and that the study, to the extent feasible, highlight the substantive differences between the uniform standards set forth in the Interstate Insurance Product Regulation Compact and the statutory requirements under state law for annuity, life, disability income, and long-term care insurance products. (b) (1) Upon completion of the study described in paragraph (1) of subdivision (a), the commissioner shall submit the study to the Chairpersons of the Assembly and Senate committees on insurance. The study shall be submitted in compliance with Section 9795 of the Government Code. (2) The commissioner may review the final study prior to its submission to the Legislature, and submit written comments on the results of the study to the Legislature when submitting the study to the Legislature pursuant to paragraph (1). (c) No moneys from the General Fund or the Insurance Fund may be used to implement this section. (Added by Stats. 2015, Ch. 691, Sec. 2. (AB 387) Effective January 1, 2016.)
  153. 10192.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. )

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    When a life insurance policy becomes paid up under a paid-up nonforfeiture benefit, the insurer must notify the policy owner, and may have to notify named beneficiaries if the owner asks.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Exemptions and Miscellaneous Provisions Relating to Insurance Contracts [10190 - 10192] ( Heading of Article 5 amended by Stats. 1989, Ch. 1360, Sec. 98. ) ## 10192. If a policy of life insurance becomes paid up pursuant to a paid up nonforfeiture benefit, the insurer shall send a notice to the owner of the policy not later than six months after the date the paid up nonforfeiture benefit becomes effective, and once every five years thereafter. The notice shall advise the owner of the policy that the owner, within six months after the date of the notice, may request the insurer to send notices to all direct beneficiaries named in the policy. If so requested, the insurer shall send the notices by first-class mail to the addresses of the beneficiaries as supplied by the owner. The notices shall advise the beneficiaries that they are named as beneficiaries in the policy, and shall identify the owner of the policy and the insured. The insurer shall provide, but not be limited to, the following information upon request from the beneficiary: (a) how the policy of insurance is identified on the records of the insurer, (b) the amount of death benefits, and (c) the cash surrender value of the policy. (Added by Stats. 1990, Ch. 870, Sec. 1.)
  154. 10192.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Medicare supplement policies and certificates must comply with specified Insurance Code provisions, even if the contract is located elsewhere.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.1. All Medicare supplement policies and certificates shall comply with the provisions of subdivision (b) of Section 10291.5 and Chapter 7 (commencing with Section 10600) of Part 2 of Division 2, regardless of the situs of the contract. (Repealed and added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  155. 10192.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section sets rules for Medicare Select policies and certificates, including approval, disclosure, network-provider standards, grievance handling, and coverage protections.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.10. (a) (1) This section shall apply to Medicare Select policies and certificates, as defined in this section. (2) A policy or certificate shall not be advertised as a Medicare Select policy or certificate unless it meets the requirements of this section. (b) For the purposes of this section: (1) “Appeal” means dissatisfaction expressed in writing by an individual insured under a Medicare Select policy or certificate with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers. (2) “Complaint” means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers. (3) “Medicare Select issuer” means an issuer offering, seeking to offer, advertising, marketing, soliciting, or issuing a Medicare Select policy or certificate. (4) “Medicare Select policy” or “Medicare Select certificate” means respectively a Medicare supplement policy or certificate that contains restricted network provisions. (5) “Network provider” means a provider of health care, or a group of providers of health care, which has entered into a written agreement with the issuer or other entity to provide benefits insured under a Medicare Select policy. (6) “Restricted network provision” means any provision that conditions the payment of benefits, in whole or in part, on the use of network providers. (7) “Service area” means the geographic area approved by the commissioner within which an issuer is authorized to offer a Medicare Select policy. (8) “Grievance” means a written complaint registered by an individual for resolution under the formal grievance procedure, which may involve, but is not limited to, the administration, claims practices, or provision of services by the issuer or its network providers. (9) “Medicare Select coverage” means Medicare supplement coverage through a preferred provider organization or any other type of restricted network, which coverage has been approved by the commissioner under this section. (10) “Preferred provider organization” means a health care provider or an entity contracting with health care providers that (A) establishes alternative or discounted rates of payment, (B) offers the insureds certain advantages for selecting the member providers, or (C) withholds from the insureds certain advantages if they choose providers other than the member providers. Organizations regulated as Medicare Select include, but are not limited to, provider groups, hospital marketing plans, and organizations that are formed or operated by insurers or third-party administrators. (c) The commissioner may authorize an issuer to offer a Medicare Select policy or certificate pursuant to this section if the commissioner finds that the issuer has satisfied all of the requirements of this section. (d) A Medicare Select issuer shall not issue a Medicare Select policy or certificate in this state until its plan of operation has been approved by the commissioner. (e) A Medicare Select issuer shall file a proposed plan of operation with the commissioner in a format prescribed by the commissioner. The plan of operation shall contain at least the following information: (1) Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration of all of the following: (A) That services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation, and afterhour care. The hours of operation and availability of afterhour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual travel times within the community. (B) That the number of network providers in the service area is sufficient, with respect to current and expected policyholders, as to either of the following: (i) To deliver adequately all services that are subject to a restricted network provision. (ii) To make appropriate referrals. (C) There are written agreements with network providers describing specific responsibilities. (D) Emergency care is available 24 hours per day and seven days per week. (E) In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, that there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare Select policy or certificate. This subparagraph shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select policy or certificate. (2) A statement or map providing a clear description of the service area. (3) A description of the appeal or grievance procedure to be utilized. (4) A description of the quality assurance program, including all of the following: (A) The formal organizational structure. (B) The written criteria for selection, retention, and removal of network providers. (C) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted. (5) A list and description, by specialty, of the network providers. (6) Copies of the written information proposed to be used by the issuer to comply with subdivision (i). (7) Any other information requested by the commissioner. (f) (1) A Medicare Select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the commissioner prior to implementing the changes. Changes shall be considered approved by the commissioner after 30 days unless specifically disapproved. (2) An updated list of network providers shall be filed at the commissioner’s request, but at least quarterly. (g) A Medicare Select policy or certificate shall not restrict payment for covered services provided by nonnetwork providers if: (1) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury, or condition. (2) It is not reasonable to obtain services through a network provider. (h) A Medicare Select policy or certificate shall provide payment for full coverage under the policy for covered services that are not available through network providers. (i) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare Select policy or certificate to each applicant. This disclosure shall include at least the following: (1) An outline of coverage sufficient to permit the applicant to compare the coverage and premiums of the Medicare Select policy or certificate with both of the following: (A) Other Medicare supplement policies or certificates offered by the issuer. (B) Other Medicare Select policies or certificates. (2) A description, including address, telephone number, and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals, and other providers. (3) A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. The description shall inform the applicant that expenses incurred when using out-of-network providers are excluded from the out-of-pocket annual limit in benefit plans K and L, unless the policy or certificate provides otherwise. (4) A description of coverage for emergency and urgently needed care and other out-of-service area coverage. (5) A description of limitations on referrals to restricted network providers and to other providers. (6) A description of the policyholder’s or certificate holder’s rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer. (7) A description of the Medicare Select issuer’s quality assurance, grievance, and appeal procedure. (j) Prior to the sale of a Medicare Select policy or certificate, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to subdivision (i) and that the applicant understands the restrictions of the Medicare Select policy or certificate. Acknowledgments shall be maintained by the insurer for at least five years in accordance with Section 10508. (k) A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written appeals and grievances from the insureds. The procedures shall be aimed at mutual agreement for settlement and may include arbitration procedures. (1) The appeal and grievance procedure shall be described in the policy and certificates and in the outline of coverage. (2) At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder or certificate holder describing how an appeal or grievance may be registered with the issuer. (3) Appeals or grievances shall be considered in a timely manner and shall be transmitted to appropriate fiduciaries who have authority to fully investigate the issue and take corrective action. (4) If an appeal or grievance is found to be valid, corrective action shall be taken promptly. (5) All concerned parties shall be notified about the results of an appeal or grievance. (6) The issuer shall report no later than each March 31st to the commissioner regarding its appeal or grievance procedure. The report shall be in a format prescribed by the commissioner and shall contain the number of appeals or grievances filed in the past year and a summary of the subject, nature, and resolution of those appeals or grievances. (7) Detailed information describing in writing how to register an appeal or grievance shall be provided to the insured prior to, or simultaneously with, the issuance of the policy or certificate. (8) The issuer shall maintain records of each appeal or grievance for at least five years. (l) At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer. (m) (1) At the request of an individual insured under a Medicare Select policy or certificate, a Medicare Select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make the policies or certificates available without requiring evidence of insurability after the Medicare Select policy or certificate has been in force for six months, unless the replacement policy or certificate includes at-home recovery benefits that were not included in the Medicare Select coverage. (2) For the purposes of this subdivision, a Medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Medicare Part B excess charges. (n) Medicare Select policies and certificates shall provide for continuation of coverage in the event the commissioner determines that Medicare Select policies and certificates issued pursuant to this section should be discontinued due to either the failure of the Medicare Select program to be reauthorized under law or its substantial amendment. (1) Each Medicare Select issuer shall make available to each individual insured under a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make the policies and certificates available without requiring evidence of insurability. (2) For the purposes of this subdivision, a Medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Medicare Part B excess charges. (o) A Medicare Select issuer shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services for the purpose of evaluating the Medicare Select program. (p) The commissioner may grant special Medicare Select status to plans of guaranteed renewable Medicare supplement coverage provided through a preferred provider organization, which plans were offered to the public or in force before the effective date of this section, if the commissioner determines that the applicants will receive benefits and consumer protections that are substantially equivalent to those in other Medicare Select plans identified in this section, and if the issuer satisfies the following requirements: (1) The issuer shall apply within one year of the effective date of this section by submitting to the commissioner the following items: (A) The current plan of operation as defined in subdivision (e). (B) If the written disclosures of subdivision (i) have not been delivered to each applicant as required, the issuer’s plan to accomplish full disclosure to every insured and to achieve substantial compliance with subdivision (j). (C) The issuer’s statement of intent to comply with subdivision (f). (D) If the plan of operation does not comply with the standards of subdivision (g), (h), (k), (l), or (m), the issuer’s plan for achieving substantial compliance with these subdivisions for every insured. (2) The issuer shall alter the plan as requested by the commissioner in order to bring the plan into substantial compliance with Medicare Select standards. (3) The issuer shall issue disclosures or other notices to its insureds regarding its status as Medicare Select as ordered by the commissioner. (4) The issuer shall provide data as provided in subdivision (o). (Amended by Stats. 2005, Ch. 206, Sec. 22. Effective January 1, 2006.)
  156. 10192.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers of Medicare supplement policies must offer required plans, cannot deny or price policies based on specified health factors during protected enrollment periods, and must give notice of open-enrollment rights.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.11. (a) (1) An issuer shall not deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this state, nor discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant in the case of an application for a policy or certificate that is submitted prior to or during the six-month period beginning with the first day of the first month in which an individual is both 65 years of age or older and is enrolled for benefits under Medicare Part B. Each Medicare supplement policy and certificate currently available from an issuer shall be made available to all applicants who qualify under this subdivision and who are 65 years of age or older. (2) (A) An issuer shall make available Medicare supplement benefit plans A, B, C, and F, if currently available, to an applicant who qualifies under this subdivision, who is 64 years of age or younger, and who does not have end-stage renal disease. An issuer shall also make available to those applicants Medicare supplement benefit plan K or L, if currently available, or Medicare supplement benefit plan M or N, if currently available. The selection between Medicare supplement plan K or L and the selection between Medicare supplement benefit plan M or N shall be made at the issuer’s discretion. (B) For policies sold on or after January 1, 2020, to newly eligible Medicare beneficiaries, as defined in subdivision (b) of Section 10192.92, an issuer shall make available Medicare supplement benefit plans A, B, D, and G, if currently available, to applicants who qualify under this subdivision who are 64 years of age or younger and who do not have end-stage renal disease. An issuer shall also make available to those applicants Medicare supplement benefit plan K or L, if currently available, or Medicare supplement benefit plan M or N, if currently available. The selection between Medicare supplement benefit plan K or L and the selection between Medicare supplement benefit plan M or N shall be made at the issuer’s discretion. (3) This section and Section 10192.12 do not prohibit an issuer in determining premium rates from treating applicants who are under 65 years of age and are eligible for Medicare Part B as a separate risk classification. This section does not prevent the exclusion of benefits for preexisting conditions as defined in paragraph (1) of subdivision (a) of Section 10192.8 or paragraph (1) of subdivision (a) of Section 10192.81. (b) (1) If an applicant qualifies under subdivision (a) and submits an application during the time period referenced in subdivision (a) and, as of the date of application, has had a continuous period of creditable coverage of at least six months, the issuer shall not exclude benefits based on a preexisting condition. (2) If the applicant qualifies under subdivision (a) and submits an application during the time period referenced in subdivision (a) and, as of the date of application, has had a continuous period of creditable coverage that is less than six months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The manner of the reduction under this subdivision shall be as specified by the commissioner. (c) Except as provided in subdivision (b) and Section 10192.23, subdivision (a) does not prevent the exclusion of benefits under a policy, during the first six months, based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the coverage became effective. (d) An individual enrolled in Medicare by reason of disability shall be entitled to open enrollment described in this section for six months after the date of their enrollment in Medicare Part B, or if notified retroactively of their eligibility for Medicare, for six months following notice of eligibility. Every issuer shall make available to every applicant qualified for open enrollment all policies and certificates offered by that issuer at the time of application. An issuer shall not discourage sales during the open enrollment period by any means, including the altering of the commission structure. (e) (1) An individual enrolled in Medicare Part B is entitled to open enrollment described in this section for six months following: (A) Receipt of a notice of termination or, if no notice is received, the effective date of termination from any employer-sponsored health plan including an employer-sponsored retiree health plan. (B) Receipt of a notice of loss of eligibility due to the divorce or death of a spouse or, if no notice is received, the effective date of loss of eligibility due to the divorce or death of a spouse, from any employer-sponsored health plan including an employer-sponsored retiree health plan. (C) Termination of health care services for a military retiree or the retiree’s Medicare eligible spouse or dependent as a result of a military base closure or loss of access to health care services because the base no longer offers services or because the individual relocates. (2) For purposes of this subdivision, “employer-sponsored retiree health plan” includes any coverage for medical expenses, including, but not limited to, coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and the California Continuation Benefits Replacement Act (Cal-COBRA), that is directly or indirectly sponsored or established by an employer for employees or retirees, their spouses, dependents, or other included insureds. (f) An individual enrolled in Medicare Part B is entitled to open enrollment described in this section if the individual was covered under a policy, certificate, or contract providing Medicare supplement coverage but that coverage terminated because the individual established residence at a location not served by the plan. (g) An individual whose coverage was terminated by a Medicare Advantage plan shall be entitled to an additional 60-day open enrollment period to be added on to and run consecutively after any open enrollment period authorized by federal law or regulation, for any Medicare supplement coverage provided by a Medicare supplement issuer and available on a guaranteed basis under state and federal law or regulation for persons terminated by their Medicare Advantage plan. (h) (1) An individual shall be entitled to an annual open enrollment period lasting 60 days or more, commencing with the individual’s birthday, during which time that person may purchase any Medicare supplement policy that offers benefits equal to or lesser than those provided by the previous coverage. During this open enrollment period, an issuer that falls under this paragraph shall not deny or condition the issuance or effectiveness of Medicare supplement coverage, nor discriminate in the pricing of coverage, because of health status, claims experience, receipt of health care, or medical condition of the individual if, at the time of the open enrollment period, the individual is covered under another Medicare supplement policy or contract. An issuer shall notify a policyholder of their rights under this subdivision at least 30 and no more than 60 days before the beginning of the open enrollment period, and on any notice related to a benefit modification or premium adjustment. (2) For purposes of this subdivision, the following provisions apply: (A) A 1990 standardized Medicare supplement benefit plan A shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan A. (B) A 1990 standardized Medicare supplement benefit plan B shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan B. (C) A 1990 standardized Medicare supplement benefit plan C shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan C. (D) A 1990 standardized Medicare supplement benefit plan D shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan D. (E) A 1990 standardized Medicare supplement benefit plan E shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare benefit plan D. (F) (i) A 1990 standardized Medicare supplement benefit plan F shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare benefit plan F. (ii) A 1990 standardized Medicare supplement benefit high deductible plan F shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit high deductible plan F. (G) A 1990 standardized Medicare supplement benefit plan G shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan G. (H) A 1990 standardized Medicare supplement benefit plan H shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan D. (I) A 1990 standardized Medicare supplement benefit plan I shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan G. (J) (i) A 1990 standardized Medicare supplement benefit plan J shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan F. (ii) A 1990 standardized Medicare supplement benefit high deductible plan J shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit high deductible plan F. (K) A 1990 standardized Medicare supplement benefit plan K shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan K. (L) A 1990 standardized Medicare supplement benefit plan L shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan L. (M) New or innovative benefits, as described in subdivision (f) of Section 10192.9 and subdivision (f) of Section 10192.91, shall not be included when determining whether benefits are equal to or lesser than those provided by the previous coverage. (i) An individual enrolled in Medicare Part B is entitled to open enrollment described in this section upon being notified that, because of an increase in the individual’s income or assets, they meet one of the following requirements: (1) They are no longer eligible for Medi-Cal benefits. (2) They are only eligible for Medi-Cal benefits with a share of cost and certifies at the time of application that they have not met the share of cost. (Amended (as amended by Stats. 2019, Ch. 157, Sec. 6) by Stats. 2019, Ch. 549, Sec. 4. (SB 407) Effective January 1, 2020.)
  157. 10192.12.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section gives certain eligible people guaranteed issue rights for Medicare supplement policies, limits what issuers may do, and requires notices and premium refunds in some cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.12. (a) (1) With respect to the guaranteed issue of a Medicare supplement policy, eligible persons are those individuals described in subdivision (b) who seek to enroll under the policy during the period specified in subdivision (c), and who submit evidence of the date of termination or disenrollment or enrollment in Medicare Part D with the application for a Medicare supplement policy. (2) With respect to eligible persons, an issuer shall not take any of the following actions: (A) Deny or condition the issuance or effectiveness of a Medicare supplement policy described in subdivision (e) that is offered and is available for issuance to new enrollees by the issuer. (B) Discriminate in the pricing of that Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition. (C) Impose an exclusion of benefits based on a preexisting condition under that Medicare supplement policy. (b) An eligible person is an individual described in any of the following paragraphs: (1) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare and either of the following applies: (A) The plan either terminates or ceases to provide all of those supplemental health benefits to the individual. (B) The employer no longer provides the individual with insurance that covers all of the payment for the 20-percent coinsurance. (2) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, and any of the following circumstances apply: (A) The certification of the organization or plan has been terminated. (B) The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides. (C) The individual is no longer eligible to elect the plan because of a change in the individual’s place of residence or other change in circumstances specified by the secretary. Those changes in circumstances shall not include termination of the individual’s enrollment on the basis described in Section 1851(g)(3)(B) of the federal Social Security Act where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under Section 1856 of the federal Social Security Act, or the plan is terminated for all individuals within a residence area. (D) (i) The Medicare Advantage plan in which the individual is enrolled reduces any of its benefits or increases the amount of cost sharing or premium or discontinues for other than good cause relating to quality of care its relationship or contract under the plan with a provider who is currently furnishing services to the individual. An individual shall be eligible under this subparagraph for a Medicare supplement policy issued by the same issuer through which the individual was enrolled at the time the reduction, increase, or discontinuance described above occurs or, commencing January 1, 2007, for one issued by a subsidiary of the parent company of that issuer or by a network that contracts with the parent company of that issuer. If no Medicare supplement policy is available to the individual from the same issuer, a subsidiary of the parent company of the issuer, or a network that contracts with the parent company of the issuer, the individual shall be eligible for a Medicare supplement policy pursuant to paragraph (1) of subdivision (e) issued by any issuer, if the Medicare Advantage plan in which the individual is enrolled does any of the following: (I) Increases the premium by 15 percent or more. (II) Increases physician, hospital, or drug copayments by 15 percent or more. (III) Reduces any benefits under the plan. (IV) Discontinues, for other than good cause relating to quality of care, its relationship or contract under the plan with a provider who is currently furnishing services to the individual. (ii) Enrollment in a Medicare supplement policy from an issuer unaffiliated with the issuer of the Medicare Advantage plan in which the individual is enrolled shall be permitted only during the annual election period for a Medicare Advantage plan, except where the Medicare Advantage plan has discontinued its relationship with a provider currently furnishing services to the individual. Nothing in this section shall be construed to authorize an individual to enroll in a group Medicare supplement policy if the individual does not meet the eligibility requirements for the group. (E) The individual demonstrates, in accordance with guidelines established by the secretary, either of the following: (i) The organization offering the plan substantially violated a material provision of the organization’s contract under this article in relation to the individual, including the failure to provide on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide the covered care in accordance with applicable quality standards. (ii) The organization, or agent or other entity acting on the organization’s behalf, materially misrepresented the plan’s provisions in marketing the plan to the individual. (F) The individual meets other exceptional conditions as the secretary may provide. (3) The individual is 65 years of age or older, is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under Section 1894 of the federal Social Security Act, and circumstances similar to those described in paragraph (2) exist that would permit discontinuance of the individual’s enrollment with the provider, if the individual were enrolled in a Medicare Advantage plan. (4) The individual meets both of the following conditions: (A) The individual is enrolled with any of the following: (i) An eligible organization under a contract under Section 1876 of the federal Social Security Act (Medicare cost). (ii) A similar organization operating under demonstration project authority, effective for periods before April 1, 1999. (iii) An organization under an agreement under Section 1833(a)(1)(A) of the federal Social Security Act (health care prepayment plan). (iv) An organization under a Medicare Select policy. (B) The enrollment ceases under the same circumstances that would permit discontinuance of an individual’s election of coverage under paragraph (2) or (3). (5) The individual is enrolled under a Medicare supplement policy, and the enrollment ceases because of any of the following circumstances: (A) The insolvency of the issuer or bankruptcy of the nonissuer organization, or other involuntary termination of coverage or enrollment under the policy. (B) The issuer of the policy substantially violated a material provision of the policy. (C) The issuer, or an agent or other entity acting on the issuer’s behalf, materially misrepresented the policy’s provisions in marketing the policy to the individual. (6) The individual meets both of the following conditions: (A) The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, any eligible organization under a contract under Section 1876 of the federal Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under Section 1894 of the federal Social Security Act, or a Medicare Select policy. (B) The subsequent enrollment under subparagraph (A) is terminated by the individual during any period within the first 12 months of the subsequent enrollment (during which the enrollee is permitted to terminate the subsequent enrollment under Section 1851(e) of the federal Social Security Act). (7) The individual upon first becoming eligible for benefits under Medicare Part A at 65 years of age enrolls in a Medicare Advantage plan under Medicare Part C or with a PACE provider under Section 1894 of the federal Social Security Act, and disenrolls from the plan or program not later than 12 months after the effective date of enrollment. (8) The individual while enrolled under a Medicare supplement policy that covers outpatient prescription drugs enrolls in a Medicare Part D plan during the initial enrollment period terminates enrollment in the Medicare supplement policy, and submits evidence of enrollment in Medicare Part D along with the application for a policy described in paragraph (4) of subdivision (e). (c) (1) In the case of an individual described in paragraph (1) of subdivision (b), the guaranteed issue period begins on the later of the following two dates and ends on the date that is 63 days after the date the applicable coverage terminates: (A) The date the individual receives a notice of termination or cessation of all supplemental health benefits or, if no notice is received, the date of the notice denying a claim because of a termination or cessation of benefits. (B) The date that the applicable coverage terminates or ceases. (2) In the case of an individual described in paragraphs (2), (3), (4), (6), and (7) of subdivision (b) whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated. (3) In the case of an individual described in subparagraph (A) of paragraph (5) of subdivision (b), the guaranteed issue period begins on the earlier of the following two dates and ends on the date that is 63 days after the date the coverage is terminated: (A) The date that the individual receives a notice of termination, a notice of the issuer’s bankruptcy or insolvency, or other similar notice if any. (B) The date that the applicable coverage is terminated. (4) In the case of an individual described in paragraph (2), (3), (6), or (7) of, or in subparagraph (B) or (C) of paragraph (5) of, subdivision (b) who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date of the disenrollment. (5) In the case of an individual described in paragraph (8) of subdivision (b), the guaranteed issue period begins on the date the individual receives notice pursuant to Section 1882(v)(2)(B) of the federal Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial enrollment period for Medicare Part D and ends on the date that is 63 days after the effective date of the individual’s coverage under Medicare Part D. (6) In the case of an individual described in subdivision (b) who is not included in this subdivision, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date of disenrollment. (d) (1) In the case of an individual described in paragraph (6) of subdivision (b), or deemed to be so described pursuant to this paragraph, whose enrollment with an organization or provider described in subparagraph (A) of paragraph (6) of subdivision (b) is involuntarily terminated within the first 12 months of enrollment and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in paragraph (6) of subdivision (b). (2) In the case of an individual described in paragraph (7) of subdivision (b), or deemed to be so described pursuant to this paragraph, whose enrollment with a plan or in a program described in paragraph (7) of subdivision (b) is involuntarily terminated within the first 12 months of enrollment and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in paragraph (7) of subdivision (b). (3) For purposes of paragraphs (6) and (7) of subdivision (b), an enrollment of an individual with an organization or provider described in subparagraph (A) of paragraph (6) of subdivision (b), or with a plan or in a program described in paragraph (7) of subdivision (b) shall not be deemed to be an initial enrollment under this paragraph after the two-year period beginning on the date on which the individual first enrolled with such an organization, provider, plan, or program. (e) (1) Under paragraphs (1), (2), (3), (4), and (5) of subdivision (b), an eligible individual is entitled to a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F (including a high deductible Plan F), K, L, M, or N offered by any issuer. (2) (A) Under paragraph (6) of subdivision (b), an eligible individual is entitled to the same Medicare supplement policy in which he or she was most recently enrolled, if available from the same issuer. If that policy is not available, the eligible individual is entitled to a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F (including a high deductible Plan F), K, L, M, or N offered by any issuer. (B) On and after January 1, 2006, an eligible individual described in this paragraph who was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit is entitled to a Medicare supplement policy that is available from the same issuer but without an outpatient prescription drug benefit or, at the election of the individual, has a benefit package classified as a Plan A, B, C, F (including high deductible Plan F), K, L, M, or N that is offered by any issuer. (3) Under paragraph (7) of subdivision (b), an eligible individual is entitled to any Medicare supplement policy offered by any issuer. (4) Under paragraph (8) of subdivision (b), an eligible individual is entitled to a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F (including a high deductible Plan F), K, L, M, or N and that is offered and is available for issuance to a new enrollee by the same issuer that issued the individual’s Medicare supplement policy with outpatient prescription drug coverage. (f) (1) At the time of an event described in subdivision (b) by which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of his or her rights under this section and of the obligations of issuers of Medicare supplement policies under subdivision (a). The notice shall be communicated contemporaneously with the notification of termination. (2) At the time of an event described in subdivision (b) by which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of his or her rights under this section, and of the obligations of issuers of Medicare supplement policies under subdivision (a). The notice shall be communicated within 10 working days of the date the issuer received notification of disenrollment. (g) An issuer shall refund any unearned premium that an insured paid in advance and shall terminate coverage upon the request of an insured. (Amended by Stats. 2012, Ch. 162, Sec. 113. (SB 1171) Effective January 1, 2013.)
  158. 10192.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers must follow federal Medicare supplement claim-processing rules, certify compliance, file annual policy lists, and provide specified notices and information; they also may not require more than one form per claim in certain Medicare and federal employee programs.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.13. (a) An issuer shall comply with Section 1882(c)(3) of the federal Social Security Act (as enacted by Section 4081(b)(2)(C) of the federal Omnibus Budget Reconciliation Act of 1987 (OBRA), Public Law 100-203) by doing all of the following and by certifying compliance on the Medicare supplement insurance experience reporting form: (1) Accepting a notice from a Medicare Administrative Contractor, formerly known as a fiscal intermediary or carrier, on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice. (2) Notifying the participating physician or supplier and the beneficiary of the payment determination. (3) Paying the participating physician or supplier directly. (4) Furnishing, at the time of enrollment, each enrollee with a card listing the policy name, number, and a central mailing address to which notices from Medicare Administrative Contractors may be sent. (5) Paying user fees for claim notices that are transmitted electronically or otherwise. (6) Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare Administrative Contractors. (7) File, by June 30 of each year, with the commissioner a list of its Medicare supplement policies and certificates offered or issued or in force in California as of the end of the previous year. (A) The list shall identify the issuer by name and address, shall identify each type of form it offers by name and form number, and shall differentiate between forms approved in the previous calendar year and those approved before the previous calendar year. (B) The list shall identify all of the following: (i) Forms issued and in force but no longer offered in California. (ii) Forms that, for any reason, were not filed and approved by the commissioner. (iii) Forms for which the commissioner’s approval was withdrawn within the previous calendar year. (iv) The number of forms issued in California in the previous calendar year, and the number of forms in force in California on December 31 of the previous calendar year. (b) (1) Compliance with the requirements set forth in subdivision (a) shall be certified on the Medicare supplement insurance experience reporting form provided by the commissioner. (2) The commissioner shall, by September 1 of each year, provide the secretary with a list identifying each issuer by name and address and provide the information requested in this section. (c) No issuer that administers Medicare coverage and federal employee programs may require that more than one form be submitted per claim in order to receive payment or reimbursement under any or all of those policies or programs. (Amended by Stats. 2009, Ch. 10, Sec. 23. Effective July 2, 2009.)
  159. 10192.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Medicare supplement policy forms generally cannot be advertised, solicited, or issued for delivery unless they meet specified loss-ratio standards, and issuers must file annual rate and experience materials with the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.14. (a) (1) (A) With respect to loss ratio standards, a Medicare supplement policy form or certificate form shall not be advertised, solicited, or issued for delivery unless the policy form or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders and certificate holders in the form of aggregate benefits, not including anticipated refunds or credits, provided under the policy form or certificate form at least 75 percent of the aggregate amount of premiums earned in the case of group policies, or at least 65 percent of the aggregate amount of premiums earned in the case of individual policies. (B) Loss ratio standards shall be calculated on the basis of incurred claims experience, and earned premiums shall be calculated for the period and in accordance with accepted actuarial principles and practices. (2) All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of this section when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards. (3) For purposes of applying paragraph (1) of subdivision (a) and paragraph (3) of subdivision (d) of Section 10192.15 only, policies issued as a result of solicitations of individuals through the mail or by mass media advertising, including both print and broadcast advertising, shall be deemed to be individual policies. (b) (1) With respect to refund or credit calculations, an issuer shall collect and file with the commissioner by May 31 of each year the data contained in the applicable reporting form required by the commissioner for each type of coverage in a standard Medicare supplement benefit plan. (2) If on the basis of the experience as reported the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a statewide basis for each type in a standard Medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year shall be excluded. (3) For the purposes of this section, with respect to policies or certificates advertised, solicited, or issued for delivery prior to January 1, 2001, the issuer shall make the refund or credit calculation separately for all individual policies, including all group policies subject to an individual loss ratio standard when issued, combined and all other group policies combined for experience after January 1, 2001. The first report pursuant to paragraph (1) shall be due by May 31, 2003. (4) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a de minimis level. The refund shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the secretary, but in no event shall it be less than the average rate of interest for 13-week Treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based. (c) An issuer of Medicare supplement policies and certificates shall file annually its rates, rating schedule, and supporting documentation including ratios of incurred losses to earned premiums by policy duration for approval by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner and this code. The supporting documentation shall also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. The demonstration shall exclude active life reserves. An expected third-year loss ratio that is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than three years. As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer of Medicare supplement policies or certificates shall file with the commissioner, in accordance with applicable filing procedures, all of the following: (1) (A) Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. The supporting documents necessary to justify the adjustment shall accompany the filing. (B) An issuer shall make premium adjustments necessary to produce an expected loss ratio under the policy or certificate to conform to minimum loss ratio standards for Medicare supplement policies and that are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the Medicare supplement policies or certificates. No premium adjustment that would modify the loss ratio experience under the policy other than the adjustments described in this section shall be made with respect to a policy at any time other than upon its renewal date or anniversary date. (C) If an issuer fails to make premium adjustments acceptable to the commissioner, the commissioner may order premium adjustments, refunds, or premium credits deemed necessary to achieve the loss ratio required by this section. (2) Any appropriate riders, endorsements, or policy forms needed to accomplish the Medicare supplement policy or certificate modifications necessary to eliminate benefit duplications with Medicare. The riders, endorsements, or policy forms shall provide a clear description of the Medicare supplement benefits provided by the policy or certificate. (d) The commissioner may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before or after the effective date of January 1, 2001, if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished in a manner deemed appropriate by the commissioner. (Amended by Stats. 2005, Ch. 206, Sec. 26. Effective January 1, 2006.)
  160. 10192.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers must get commissioner approval before selling, delivering, or changing Medicare supplement policy forms or premium rates, and must keep or file certain forms, notices, and reports as specified.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.15. (a) An issuer shall not advertise, solicit, or issue for delivery a policy or certificate to a resident of this state unless the policy form or certificate form has been filed with and approved by the commissioner in accordance with filing requirements and procedures prescribed by the commissioner. Master policies issued outside California shall be filed for informational purposes along with the certificates. Until January 1, 2001, or 90 days after approval of Medicare supplement policies or certificates submitted for approval pursuant to this section, whichever is later, issuers may continue to offer and market previously approved Medicare supplement policies or certificates. (b) An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits, as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), only with the commissioner in the state where the policy or certificate was issued. (c) (1) An issuer shall not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule, and supporting documentation have been filed with and approved by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner. (2) Paragraph (1) of subdivision (b) of Section 10290 shall not apply to Medicare supplement insurance forms or rates. However, the commissioner may authorize in writing, for good cause only, the limited use of a form or rates after that form or the rates have been filed with the commissioner for 60 days and have not otherwise been acted upon. (d) (1) Except as provided in paragraph (2), an issuer shall not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan. (2) An issuer may offer, with the approval of the commissioner, up to four additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases: (A) The inclusion of new or innovative benefits. (B) The addition of either direct response or agent marketing methods. (C) The addition of either guaranteed issue or underwritten coverage. (D) The offering of coverage to individuals eligible for Medicare by reason of disability. (3) For the purposes of this section, a “type” means an individual policy, a group policy, an individual Medicare Select policy, or a group Medicare Select policy. (e) (1) Except as provided in subdivision (a), an issuer shall continue to make available for purchase any policy form or certificate form issued after January 1, 2001, that has been approved by the commissioner. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months. (A) An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the commissioner in writing its decision at least 60 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the commissioner, the issuer shall no longer offer for sale the policy form or certificate form in this state. (B) An issuer that discontinues the availability of a policy form or certificate form pursuant to subparagraph (A) shall not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for a period of five years after the issuer provides notice to the commissioner of the discontinuance. The period of discontinuance may be reduced if the commissioner determines that a shorter period is appropriate. (2) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subdivision. (3) A change in the rating structure or methodology shall be considered a discontinuance under paragraph (1) unless the issuer complies with the following requirements: (A) The issuer provides an actuarial memorandum, in a form and manner prescribed by the commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates. The commissioner may approve the change if it is in the public interest. (B) The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The commissioner may approve a change to the differential that is in the public interest. The commissioner may approve a change to the differential if it is in the public interest. (f) (1) Except as provided in paragraph (2), the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in Section 10192.14. (2) Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation. (Amended by Stats. 2005, Ch. 206, Sec. 27. Effective January 1, 2006.)
  161. 10192.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section limits commission and other compensation for Medicare supplement policy sales and renewals, and requires insurers to file their commission structure or a compliance explanation with the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.16. (a) An issuer or other entity may provide commission or other compensation to an agent or other representative for the sale of a Medicare supplement policy or certificate only if the first year commission or other first year compensation is no more than 200 percent of the commission or other compensation paid for selling or servicing the policy or certificate in the second year or period. Every insurer shall file with the commissioner its commission structure or an explanation of the insurer’s plan to comply with this provision. (b) The commission or other compensation provided in subsequent renewal years must be the same as that provided in the second year or period and must be provided for no fewer than five renewal years. (c) No issuer or other entity shall provide compensation to its agents or other producers, and no agent or producer shall receive compensation, greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates if an existing policy or certificate is replaced. (d) For purposes of this section, “commission” or “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate, including, but not limited to, bonuses, gifts, prizes, awards, and finders’ fees. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  162. 10192.165.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section gives the commissioner authority to assess administrative penalties for violations of the article and sets penalty amounts for issuers and non-issuers; it also allows court actions and criminal punishment for knowing or intentional violations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.165. (a) (1) As prescribed in this chapter, the commissioner shall have the administrative authority to assess penalties against issuers, brokers, agents, and other entities engaged in the business of insurance or any other person or entity for violations of this article. (2) Upon a showing of a violation of this article in any civil action, a court may also assess the penalties prescribed in this chapter. (3) Whenever the commissioner has reasonable cause to believe or determines after a public hearing that any issuer, agent, broker, or other person or entity engaged in the business of insurance, has violated this article he or she shall make and serve upon the issuer, broker, or other person or entity a notice of hearing. The notice shall state the commissioner’s intent to assess the administrative penalties, the time and place of the hearing, and the conduct, condition, or ground upon which the commissioner is holding the hearing and assessing the penalties. The hearing shall occur within 30 days after the notice is served. Within 30 days after the hearing the commissioner shall issue an order specifying the amount of penalties to be paid. The penalties resulting from the hearing shall be paid to the Insurance Fund. (4) The powers vested in the commissioner by this section shall be additional to any and all powers and remedies vested in the commissioner by law. (b) (1) Any broker, agent, or other person or entity engaged in the business of insurance, other than an issuer, who violates this article is liable for administrative penalties of no less than two hundred fifty dollars ($250) for the first violation. (2) Any broker, agent, other person, or other entity engaged in the business of insurance, other than an issuer, who engages in practices prohibited by this chapter a second or subsequent time or who commits a knowing violation of this article, is liable for administrative penalties of no less than one thousand dollars ($1,000) and no more than twenty-five thousand dollars ($25,000) for each violation. (3) Any issuer who violates this article is liable for administrative penalties of no less than two thousand five hundred dollars ($2,500) for the first violation. (4) Any issuer who violates this article with a frequency as to indicate a general business practice or commits a knowing violation of this article, is liable for administrative penalties of no less than ten thousand dollars ($10,000) and no more than one hundred thousand dollars ($100,000) for each violation. (c) (1) Actions for injunctive relief, penalties in the amounts specified in subdivision (a), damages, restitution, and all other remedies provided for in law, may be brought in superior court by the Attorney General, district attorney, or city attorney on behalf of the people of the State of California. (2) The court shall award reasonable attorney’s fees and costs to a prevailing plaintiff who establishes a violation of this article. (d) In addition to any other applicable penalties, the commissioner may require issuers, agents, brokers, or other persons or entities violating any provision of this article or regulations promulgated pursuant to this article, to cease marketing in this state any Medicare supplement policy or certificate or may require the issuer, agent, broker, or other person or entity to take such actions as are necessary to comply with the provisions of this article, or both. (e) Any person who knowingly or intentionally violates any provision of this article is guilty of a public offense punishable by imprisonment in a county jail not exceeding one year, or by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. (f) (1) The requirements and remedies provided by this article are in addition to any other remedies provided by law. (2) If any provision of this article or the application thereof to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the article which can be given effect without the invalid provision or application, and to this end the provisions of this article are severable. (Amended by Stats. 2011, Ch. 15, Sec. 213. (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.)
  163. 10192.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section requires Medicare supplement policies to include specified renewal and disclosure provisions, limits certain benefit changes, and gives policyholders a 30-day return right with a premium refund.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.17. (a) Medicare supplement policies and certificates shall include a renewal, continuation, or conversion provision. The language or specifications of the provision shall be consistent with the type of contract issued. The provision shall be appropriately captioned and shall appear on the first page of the policy, and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder’s age. (b) Except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after the date of issue or upon reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require a signed acceptance by the insured. After the date of policy or certificate issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies, or if the increased benefits or coverage is required by law. If a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy. (c) Medicare supplement policies or certificates shall not provide for the payment of benefits based on standards described as “usual and customary,” “reasonable and customary,” or words of similar import. (d) If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions, those limitations shall appear as a separate paragraph of the policy and be labeled as “Preexisting Condition Limitations.” (e) (1) Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate, and of the outline of coverage, or attached thereto, in no less than 10-point uppercase type, stating in substance that the policyholder or certificate holder shall have the right to return the policy or certificate, via regular mail, within 30 days of receiving it, and to have the full premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason. The return shall void the contract from the beginning, and the parties shall be in the same position as if no contract had been issued. (2) For purposes of this section, a timely manner shall be no later than 30 days after the issuer receives the returned contract. (3) If the issuer fails to refund all prepaid or periodic charges paid in a timely manner, then the applicant shall receive interest on the paid charges at the legal rate of interest on judgments as provided in Section 685.010 of the Code of Civil Procedure. The interest shall be paid from the date the issuer received the returned contract. (f) (1) Issuers of health insurance policies, certificates, or contracts that provide hospital or medical expense coverage on an expense incurred or indemnity basis, other than incidentally, to persons eligible for Medicare shall provide to those applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare and Medicaid Services and in a type size no smaller than 12-point type. Delivery of the guide shall be made whether or not the policies or certificates are advertised, solicited, or issued for delivery as Medicare supplement policies or certificates as defined in this article. Except in the case of direct response issuers, delivery of the guide shall be made to the applicant at the time of application, and acknowledgment of receipt of the guide shall be obtained by the issuer. Direct response issuers shall deliver the guide to the applicant upon request, but not later than at the time the policy is delivered. (2) For the purposes of this section, “form” means the language, format, type size, type proportional spacing, bold character, and line spacing. (g) As soon as practicable, but no later than 30 days prior to the annual effective date of any Medicare benefit changes, an issuer shall notify its policyholders and certificate holders of modifications it has made to Medicare supplement policies or certificates in a format acceptable to the commissioner. The notice shall include both of the following: (1) A description of revisions to the Medicare Program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate. (2) Inform each policyholder or certificate holder as to when any premium adjustment is to be made due to changes in Medicare. (h) The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension. (i) The notices shall not contain or be accompanied by any solicitation. (j) (1) Issuers shall provide an outline of coverage to all applicants at the time application is presented to the prospective applicant and, except for direct response policies, shall obtain an acknowledgment of receipt of the outline from the applicant. If an outline of coverage is provided at the time of application and the Medicare supplement policy or certificate is issued on a basis which would require revision of the outline, a substitute outline of coverage properly describing the policy or certificate shall accompany the policy or certificate when it is delivered and contain the following statement, in no less than 12-point type, immediately above the company name: “NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued.” (2) The outline of coverage provided to applicants pursuant to this section consists of four parts: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage shall be in the language and format prescribed below in no less than 12-point type. All Medicare supplement plans authorized by federal law shall be shown on the cover page, and the plans that are offered by the issuer shall be prominently identified. Premium information for plans that are offered shall be shown on the cover page or immediately following the cover page and shall be prominently displayed. The premium and mode shall be stated for all plans that are offered to the prospective applicant. All possible premiums for the prospective applicant shall be illustrated. (3) The commissioner may adopt regulations to implement this article, including, but not limited to, regulations that specify the required information to be contained in the outline of coverage provided to applicants pursuant to this section, including the format of tables, charts, and other information. (k) (1) Any disability insurance policy or certificate, a basic, catastrophic or major medical expense policy, or single premium nonrenewal policy or certificate issued to persons eligible for Medicare, other than a Medicare supplement policy, a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.), a disability income policy, or any other policy identified in subdivision (b) of Section 10192.3, advertised, solicited, or issued for delivery in this state to persons eligible for Medicare, shall notify insureds under the policy that the policy is not a Medicare supplement policy or certificate. The notice shall either be printed or attached to the first page of the outline of coverage delivered to insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy or certificate delivered to insureds. The notice shall be in no less than 12-point type and shall contain the following language: “THIS [POLICY OR CERTIFICATE] IS NOT A MEDICARE SUPPLEMENT [POLICY OR CONTRACT]. If you are eligible for Medicare, review the Guide to Health Insurance for People with Medicare available from the company.” (2) Applications provided to persons eligible for Medicare for the disability insurance policies or certificates described in paragraph (1) shall disclose the extent to which the policy duplicates Medicare in a manner required by the commissioner. The disclosure statement shall be provided as a part of, or together with, the application for the policy or certificate. (l) (1) Insurers issuing Medicare supplement policies or certificates for delivery in California shall provide an outline of coverage to all applicants at the time of presentation for examination or sale as provided in Section 10605, and in no case later than at the time the application is made. Except for direct response policies, insurers shall obtain a written acknowledgment of receipt of the outline from the applicant. Any advertisement that is not a presentation for examination or sale as defined in subdivision (e) of Section 10601 shall contain a notice in no less than 10-point uppercase type that an outline of coverage is available upon request. The insurer or agent that receives any request for an outline of coverage shall provide an outline of coverage to the person making the request within 14 days of receipt of the request. (2) If an outline of coverage is provided at or before the time of application and the Medicare supplement policy or certificate is issued on a basis that would require revision of the outline, a substitute outline of coverage properly describing the policy or certificate shall accompany the policy or certificate when it is delivered and contain the following statement, in no less than 12-point type, immediately above the name: “NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued.” (3) The outline of coverage shall be in the language and format prescribed in this subdivision in no less than 12-point type, and shall include the following items in the order prescribed below. Titles, as set forth below in paragraphs (B) to (H), inclusive, shall be capitalized, centered, and printed in boldface type. (A) (i) The following shall only apply to policies sold for effective dates prior to June 1, 2010: (I) The outline of coverage shall include the items, and in the same order, specified in the chart set forth in Section 17 of the Model Regulation to implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, as adopted by the National Association of Insurance Commissioners in 2004. (II) The cover page shall contain the 14-plan (A-L) charts. The plans offered by the insurer shall be clearly identified. Innovative benefits shall be explained in a manner approved by the commissioner. The text shall read: “Medicare supplement insurance can be sold in only 12 standard plans. This chart shows the benefits included in each plan. Every insurance company must offer Plan A. Some plans may not be available. The BASIC BENEFITS included in ALL plans are: Hospitalization: Medicare Part A coinsurance plus coverage for 365 additional days after Medicare benefits end. Medical expenses: Medicare Part B coinsurance (usually 20 percent of the Medicare-approved amount). Blood: First three pints of blood each year. Mammogram: One annual screening to the extent not covered by Medicare. Cervical cancer test: One annual screening.” [Reference to the mammogram and cervical cancer screening test shall not be included so long as California is required to disallow them for Medicare beneficiaries by the Centers for Medicare and Medicaid Services or other agent of the federal government under 42 U.S.C. Sec. 1395ss.] (ii) The following shall only apply to policies sold for effective dates on or after June 1, 2010: (I) The outline of coverage shall include the items, and in the same order specified in the chart set forth in Section 17 of the Model Regulation to implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, as adopted by the National Association of Insurance Commissioners in 2008. (II) The cover page shall contain all Medicare supplement benefit plan charts A to D, inclusive, F, high deductible F, G, and K to N, inclusive. The plans offered by the insurer shall be clearly identified. Innovative benefits shall be explained in a manner approved by the commissioner. The text shall read: “Medicare supplement insurance can be sold in only standard plans. This chart shows the benefits included in each plan. Every insurance company must offer Plan A. Some plans may not be available. Plans E, H, I and J are no longer available for sale. [This sentence shall not appear after June 1, 2011.] The BASIC BENEFITS included in ALL plans are: Hospitalization: Medicare Part A coinsurance plus coverage for 365 additional days after Medicare benefits end. Medical expenses: Medicare Part B coinsurance (usually 20 percent of the Medicare-approved amount) or copayments for hospital outpatient services. Plans K, L, and N require insureds to pay a portion of Part B coinsurance copayments. Blood: First three pints of blood each year. Hospice: Part A coinsurance. Mammogram: One annual screening to the extent not covered by Medicare. Cervical cancer test: One annual screening.” [Reference to the mammogram and cervical cancer screening test shall not be included so long as California is required to disallow them for Medicare beneficiaries by the Centers for Medicare and Medicaid Services or other agent of the federal government under 42 U.S.C. Sec. 1395ss.] (iii) The following shall apply only to policies sold for effective dates on or after January 1, 2020: (I) The outline of coverage shall include the items, and in the same order specified in the chart set forth in Section 17 of the Model Regulation to implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, as adopted by the National Association of Insurance Commissioners in 2016. (II) The cover page shall contain all Medicare supplement benefit plan charts A to D, inclusive, F, high deductible F, G, high deductible G, and K to N, inclusive. The plans offered by the insurer shall be clearly identified. Plans C, F, and high deductible F shall be noted as available only to applicants eligible before 2020. Innovative benefits shall be explained in a manner approved by the commissioner. The text shall read: “Medicare supplement insurance can be sold in only standard plans. This chart shows the benefits included in each plan. Every insurance company must offer Plan A. The BASIC BENEFITS included in ALL plans are: Hospitalization: Medicare Part A coinsurance plus coverage for 365 additional days after Medicare benefits end. Medical expenses: Medicare Part B coinsurance (usually 20 percent of the Medicare-approved amount) or copayments for hospital outpatient services. Plans K, L, and N require insureds to pay a portion of Part B coinsurance copayments. Blood: First three pints of blood each year. Hospice: Part A coinsurance. Mammogram: One annual screening to the extent not covered by Medicare. Cervical cancer test: One annual screening.” [Reference to the mammogram and cervical cancer screening test shall not be included so long as California is required to disallow them for Medicare beneficiaries by the Centers for Medicare and Medicaid Services or other agent of the federal government under 42 U.S.C. Sec. 1395ss.] (B) PREMIUM INFORMATION. Premium information for plans that are offered by the insurer shall be shown on, or immediately following, the cover page and shall be clearly and prominently displayed. The premium and mode shall be stated for all offered plans. All possible premiums for the prospective applicant shall be illustrated in writing. If the premium is based on the increasing age of the insured, information specifying when and how premiums will change shall be clearly illustrated in writing. The text shall state: “We [the insurer’s name] can only raise your premium if we raise the premium for all policies like yours in California.” (C) The text shall state: “Use this outline to compare benefits and premiums among policies.” (D) READ YOUR POLICY VERY CAREFULLY. The text shall state: “This is only an outline describing your policy’s most important features. The policy is your insurance contract. You must read the policy itself to understand all of the rights and duties of both you and your insurance company.” (E) THIRTY-DAY RIGHT TO RETURN THIS POLICY. The text shall state: “If you find that you are not satisfied with your policy, you may return it to [insert the insurer’s address]. If you send the policy back to us within 30 days after you receive it, we will treat the policy as if it has never been issued and return all of your payments.” (F) POLICY REPLACEMENT. The text shall read: “If you are replacing another health insurance policy, do NOT cancel it until you have actually received your new policy and are sure you want to keep it.” (G) DISCLOSURES. The text shall read: “This policy may not fully cover all of your medical costs.” “Neither this company nor any of its agents are connected with Medicare.” “This outline of coverage does not give all the details of Medicare coverage. Contact your local social security office or consult ‘The Medicare Handbook’ for more details.” “For additional information concerning policy benefits, contact the Health Insurance Counseling and Advocacy Program (HICAP) or your agent. Call the HICAP toll-free telephone number, 1-800-434-0222, for a referral to your local HICAP office. HICAP is a service provided free of charge by the State of California.” For policies effective on dates on or after June 1, 2010, the following language shall be required until June 1, 2011, “This outline shows benefits and premiums of policies sold for effective dates on or after June 1, 2010. Policies sold for effective dates prior to June 1, 2010 have different benefits and premiums. Plans E, H, I, and J are no longer available for sale.” (H) [For policies that are not guaranteed issue] COMPLETE ANSWERS ARE IMPORTANT. The text shall read: “When you fill out the application for a new policy, be sure to answer truthfully and completely all questions about your medical and health history. The company may have the right to cancel your policy and refuse to pay any claims if you leave out or falsify important medical information. Review the application carefully before you sign it. Be certain that all information has been properly recorded.” (I) One chart for each benefit plan offered by the insurer showing the services, Medicare payments, payments under the policy and payments expected from the insured, using the same uniform format and language. No more than four plans may be shown on one page. Include an explanation of any innovative benefits in a manner approved by the commissioner. (m) An issuer shall comply with all notice requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173). (Amended by Stats. 2019, Ch. 157, Sec. 7. (SB 784) Effective July 30, 2019.)
  164. 10192.18.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section sets application, notice, replacement, suspension, and reinstatement rules for Medicare supplement policies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.18. (a) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement, Medicare Advantage, Medi-Cal coverage, or another health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other disability policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent containing those questions and statements may be used. (Statements) (1) You do not need more than one Medicare supplement policy. (2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages. (3) You may be eligible for benefits under Medi-Cal and may not need a Medicare supplement policy. (4) If after purchasing this policy you become eligible for Medi-Cal, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, during your entitlement to benefits under Medi-Cal for 24 months. You must request this suspension within 90 days of becoming eligible for Medi-Cal. If you are no longer entitled to Medi-Cal, your suspended Medicare supplement policy or if that is no longer available, a substantially equivalent policy, will be reinstituted if requested within 90 days of losing Medi-Cal eligibility. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension. (5) If you are eligible for, and have enrolled in, a Medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement policy under these circumstances and later lose your employer or union-based group health plan, your suspended Medicare supplement policy or if that is no longer available, a substantially equivalent policy, will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension. (6) Counseling services are available in this state to provide advice concerning your purchase of Medicare supplement insurance and concerning medical assistance through the Medi-Cal program, including benefits as a qualified Medicare beneficiary (QMB) and a specified low-income Medicare beneficiary (SLMB). If you want to discuss buying Medicare supplement insurance with a trained insurance counselor, call the California Department of Insurance’s toll-free telephone number 1-800-927-HELP, or access the department’s Internet Web site, www.insurance.ca.gov, and ask how to contact your local Health Insurance Counseling and Advocacy Program (HICAP) office. HICAP is a service provided free of charge by the State of California. (Questions) If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance policy or that you had certain rights to buy such a policy, you may be guaranteed acceptance in one or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS. [Please mark Yes or No below with an “X.”] To the best of your knowledge, (1) (a) Did you turn 65 years of age in the last 6 months? Yes____ No____ (b) Did you enroll in Medicare Part B in the last 6 months? Yes____ No____ (c) If yes, what is the effective date?___________________ (2) Are you covered for medical assistance through California’s Medi-Cal program? NOTE TO APPLICANT: If you have a share of cost under the Medi-Cal program, please answer NO to this question. Yes____ No____ If yes, (a) Will Medi-Cal pay your premiums for this Medicare supplement policy? Yes____ No____ (b) Do you receive benefits from Medi-Cal OTHER THAN payments toward your Medicare Part B premium? Yes____ No____ (3) (a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “END” blank. START __/__/__ END __/__/__ (b) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement policy? Yes____ No____ (c) Was this your first time in this type of Medicare plan? Yes____ No____ (d) Did you drop a Medicare supplement policy to enroll in the Medicare plan? Yes____ No____ (4) (a) Do you have another Medicare supplement policy in force? Yes____ No____ (b) If so, with what company, and what plan do you have? [optional for direct mailers] Yes____ No____ (c) If so, do you intend to replace your current Medicare supplement policy with this policy? Yes____ No____ (5) Have you had coverage under any other health insurance within the past 63 days (For example, an employer, union, or individual plan)? Yes____ No____ (a) If so, with what companies and what kind of policy? ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ (b) What are your dates of coverage under the other policy? START __/__/__ END __/__/__ (If you are still covered under the other policy, leave “END” blank.) (b) Agents shall list any other health insurance policies they have sold to the applicant as follows: (1) List policies sold that are still in force. (2) List policies sold in the past five years that are no longer in force. (c) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the issuer, shall be returned to the applicant by the issuer upon delivery of the policy. (d) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance for delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except when the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer as provided in Section 10508. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of Medicare supplement coverage. (e) The notice required by subdivision (d) for an issuer shall be in the form specified by the commissioner, using, to the extent practicable, a model notice prepared by the National Association of Insurance Commissioners for this purpose. The replacement notice shall be printed in no less than 12-point type in substantially the following form: [Insurer’s name and address] NOTICE TO APPLICANT REGARDING REPLACEMENT OF MEDICARE SUPPLEMENT COVERAGE OR MEDICARE ADVANTAGE SAVE THIS NOTICE! IT MAY BE IMPORTANT IN THE FUTURE. If you intend to cancel or terminate existing Medicare supplement or Medicare Advantage insurance and replace it with coverage issued by [company name], please review the new coverage carefully and replace the existing coverage ONLY if the new coverage materially improves your position. DO NOT CANCEL YOUR PRESENT COVERAGE UNTIL YOU HAVE RECEIVED YOUR NEW POLICY AND ARE SURE THAT YOU WANT TO KEEP IT. If you decide to purchase the new coverage, you will have 30 days after you receive the policy to return it to the insurer, for any reason, and receive a refund of your money. If you want to discuss buying Medicare supplement or Medicare Advantage coverage with a trained insurance counselor, call the California Department of Insurance’s toll-free telephone number 1-800-927-HELP, and ask how to contact your local Health Insurance Counseling and Advocacy Program (HICAP) office. HICAP is a service provided free of charge by the State of California. STATEMENT TO APPLICANT FROM THE INSURER AND AGENT: I have reviewed your current health insurance coverage. To the best of my knowledge, the replacement of insurance involved in this transaction does not duplicate coverage or, if applicable, Medicare Advantage coverage because you intend to terminate your existing Medicare supplement coverage or leave your Medicare Advantage plan. In addition, the replacement coverage contains benefits that are clearly and substantially greater than your current benefits for the following reasons: __ Additional benefits that are: ______ __ No change in benefits, but lower premiums. __ Fewer benefits and lower premiums. __ Plan has outpatient prescription drug coverage and applicant is enrolled in Medicare Part D. __ Disenrollment from a Medicare Advantage plan. Reasons for disenrollment: __ Other reasons specified here: ______ 1. Note: If the issuer of the Medicare supplement policy being applied for does not impose, or is otherwise prohibited from imposing, preexisting condition limitations, please skip to statement 3 below. Health conditions that you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy. 2. State law provides that your replacement Medicare supplement policy may not contain new preexisting conditions, waiting periods, elimination periods, or probationary periods. The insurer will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new coverage for similar benefits to the extent that time was spent (depleted) under the original policy. 3. If you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer any and all questions on the application concerning your medical and health history. Failure to include all material medical information on an application requesting that information may provide a basis for the insurer to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. [If the policy or certificate is guaranteed issue, this paragraph need not appear.] DO NOT CANCEL YOUR PRESENT POLICY UNTIL YOU HAVE RECEIVED YOUR NEW POLICY AND ARE SURE THAT YOU WANT TO KEEP IT. (Signature of Agent, Broker, or Other Representative) (Signature of Applicant) (Date) (f) An issuer, broker, agent, or other person shall not cause an insured to replace a Medicare supplement insurance policy unnecessarily. In recommending replacement of any Medicare supplement insurance, an agent shall make reasonable efforts to determine the appropriateness to the potential insured. (g) An issuer shall not require, request, or obtain health information as part of the application process for an applicant who is eligible for guaranteed issuance of, or open enrollment for, any Medicare supplement coverage pursuant to Section 10192.11 or 10192.12, except for purposes of paragraph (1) or (2) of subdivision (a) of Section 10192.11 when the applicant is first enrolled in Medicare Part B. The application form shall include a clear and conspicuous statement that the applicant is not required to provide health information during a period where guaranteed issue or open enrollment applies, as specified in Section 10192.11 or 10192.12, except for purposes of paragraph (1) or (2) of subdivision (a) of Section 10192.11 when the applicant is first enrolled in Medicare Part B, and shall inform the applicant of those periods of guaranteed issuance of Medicare supplement coverage. This subdivision does not prohibit an issuer from requiring proof of eligibility for a guaranteed issuance of Medicare supplement coverage. (h) This section shall become operative on January 1, 2017. (Amended (as added by Stats. 2015, Ch. 348, Sec. 21) by Stats. 2016, Ch. 86, Sec. 207. (SB 1171) Effective January 1, 2017.)
  165. 10192.185.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers of Medicare supplement policies may not require more than one or two months’ premium with an application, depending on whether interim coverage is provided, and they must notify the applicant within 60 days. If they do not notify on time, they must pay interest on the applicant’s funds until refunded or applied to premium.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.185. In addition to any other requirements of law, the following shall apply to a Medicare supplement policy: (a) The issuer shall not require an amount greater than one month’s premium to be submitted with an application for the policy of insurance if interim coverage is not provided. If interim coverage is provided, the issuer shall not require an amount greater than two months’ premium for that purpose. No further premiums may be collected until the policy is delivered to the applicant. (b) The issuer shall notify the applicant within 60 days from the date the issuer or issuer’s authorized representative or producer receives the application and the amount as to whether or not the applicant will be issued a policy of insurance. If the applicant is not so notified, the issuer or issuer’s authorized representative or producer shall pay interest to the applicant on the funds that the applicant submitted with the application, at the legal rate of interest on judgments as provided in Section 685.010 of the Code of Civil Procedure, from the date the issuer or issuer’s authorized representative or producer received those funds until they are refunded to the applicant or are applied toward the premium. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  166. 10192.19.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers and related sellers of Medicare supplement policies have advertising disclosure, review, and anti-misleading rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.19. (a) An issuer shall provide a copy of any Medicare supplement advertisement intended for use in this state whether through written, radio, or television medium to the commissioner for review at least 30 days before dissemination of the advertisement. The advertisement shall comply with all applicable laws of California. (b) A television, radio, mail, or newspaper advertisement which is designed to produce leads either by use of a coupon or a request to write or otherwise contact the issuer, a production agent, or other person or a subsequent advertisement prior to contact shall include information disclosing that an agent may contact the applicant if that is the fact. In addition, an agent who makes contact with a consumer, as a result of acquiring that consumer’s name from a lead generating device shall disclose that fact in the initial contact with the consumer. (c) No issuer, agent, broker, solicitor, or other person or other entity shall solicit residents of this state for the purchase of a Medicare supplement policy through the use of a true or fictitious name which is deceptive or misleading with regard to the status, character, or proprietary or representative capacity of the entity or person or the true purpose of the advertisement. (d) For purposes of this section, an advertisement includes envelopes, stationery, business cards, or other materials designed to describe and encourage the purchase of a Medicare supplement policy. (e) Advertisements may not employ words, letters, initials, symbols, or other devices which are so similar to those used by governmental agencies, a nonprofit or charitable institution, senior organization, or other insurer that they could have the capacity or tendency to mislead the public. Examples of misleading materials, include, but are not limited to, those which imply any of the following: (1) The advertised coverages are somehow provided by or are endorsed by the governmental agencies or the other insurer. (2) The advertiser is the same as, is connected with, or is endorsed by, the governmental agencies, other entity, or other insurers. (3) That the advertised coverages are somehow provided by or are endorsed by the governmental agencies, other entity, or other insurers. (f) No advertisement shall use the name of a state or political subdivision thereof in a policy name or description. (g) No advertisement may use any name, service mark, slogan, symbol, or a device in any manner that implies that the issuer or the Medicare supplement policy advertised, or that any agency who may call upon the consumer in response to the advertisement is connected with a governmental agency, such as the Social Security Administration. (h) No advertisement shall be used that fails to prominently display the disclaimer to the effect of “Not Connected with or endorsed by the U.S. Government or the federal Medicare program.” (i) No advertisement may imply that the reader may lose a right or privilege or benefit under federal, state, or local law if he or she fails to respond to the advertisement. (j) An issuer, agent, broker, or other entity may not use an address so as to mislead or deceive as to the true identity, location, or licensing status of the issuer, agent, broker, or other entity. (k) No issuer may use, in the trade name of its insurance policy, any terminology or words so similar to the name of a governmental agency or governmental program as to have the tendency to confuse, deceive, or mislead a prospective purchaser. (l) All advertisements used by agents, producers, brokers, solicitors, or other persons of an issuer must have prior written approval of the issuer before they may be used. (m) No issuer, agent, broker, or other entity may solicit a particular class by use of advertisements which state or imply that the occupational or other status as members of the class entitles them to reduced rates on a group or other basis when, in fact, the policy being advertised is sold only on an individual basis at regular rates. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  167. 10192.195.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    The commissioner may set the standard form and contents of a Medicare informational brochure, and may require it to be given to eligible applicants on specific timing rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.195. The commissioner may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for Medicare by reason of age which is intended to improve the buyer’s ability to select the most appropriate coverage and improve the buyer’s understanding of Medicare. Except in the case of direct response insurance policies, the commissioner may require by regulation that the information brochure be provided to any applicant eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the commissioner may require by regulation that the prescribed brochure be provided upon request to any applicant eligible for Medicare by reason of age, but in no event later than the time of policy delivery. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  168. 10192.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This article’s purpose is to standardize and simplify Medicare supplement policies and require full disclosures in their sale.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.2. The purpose of this article is to provide for the reasonable standardization of coverage and simplification of terms and benefits of Medicare supplement policies, to facilitate public understanding and comparison of those policies, to eliminate provisions contained in those policies that may be misleading or confusing in connection with the purchase of the policies or with the settlement of claims, and to provide for full disclosures in the sale of Medicare supplement insurance policies to persons eligible for Medicare. (Repealed and added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  169. 10192.20.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers of Medicare supplement policies must follow specific marketing rules, and the commissioner must prepare and publish a yearly rate guide.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.20. (a) An issuer, directly or through its producers, shall do each of the following: (1) Establish marketing procedures to ensure that any comparison of policies by its agents or other producers will be fair and accurate. (2) Establish marketing procedures to ensure that excessive insurance is not sold or issued. (3) Display prominently by type, stamp, or other appropriate means, on the first page of the policy, the following: “Notice to buyer: This policy may not cover all of your medical expenses.” (4) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant for a Medicare supplement policy already has health insurance and the types and amounts of that insurance. (5) Establish auditable procedures for verifying compliance with this subdivision. (b) In addition to the practices prohibited by this code or any other law, the following acts and practices are prohibited: (1) Twisting, which means knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert an insurance policy or to take out a policy of insurance with another insurer. (2) High pressure tactics, which means employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance. (3) Cold lead advertising, which means making use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is the solicitation of insurance and that contact will be made by an insurance agent or insurance company. (c) The terms “Medicare supplement,” “Medigap,” “Medicare Wrap-Around” and words of similar import shall not be used unless the policy is issued in compliance with this article. (d) The commissioner each year shall prepare a rate guide for Medicare supplement insurance and Medicare supplement contracts. The commissioner each year shall make the rate guide available on or before the date of the fall Medicare annual open enrollment. The rate guide shall include all of the following for each company that sells Medicare supplemental insurance or Medicare supplement contracts in California: (1) (A) For policies sold for effective dates prior to June 1, 2010, a listing of all the policies, plans A to L, inclusive, that are available from the company. (B) For policies sold for effective dates on or after June 1, 2010, a listing of all the policies, plans A to D, inclusive, F, high deductible F, G, and K to N, inclusive, that are available from the company. (C) For policies sold or issued for effective dates on or after January 1, 2020, a listing of all the policies, plans A to D, inclusive, F, high deductible F, G, high deductible G, and K to N, inclusive, that are available from the company. (2) (A) For policies sold for effective dates prior to June 1, 2010, a listing of all the policies, plans A to L, inclusive, for Medicare beneficiaries under 65 years of age that are available from the company. (B) For policies sold for effective dates on or after June 1, 2010, a listing of all the policies, plans, A to D, inclusive, F, high deductible F, G, and K to N, inclusive, for Medicare beneficiaries under 65 years of age that are available from the company. (C) For policies sold or issued for effective dates on or after January 1, 2020, a listing of all the policies, plans A to D, inclusive, F, high deductible F, G, high deductible G, and K to N, inclusive, for Medicare beneficiaries under 65 years of age that are available from the company. (3) The toll-free telephone number of the company that consumers can use to obtain information from the company. (4) Sample rates for each policy listed pursuant to paragraphs (1) and (2). The sample rates shall be for ages 0–65, 65, 70, 75, and 80. (5) The premium rate methodology for each policy listed pursuant to paragraphs (1) and (2). “Premium rate methodology” means attained age, issue age, or community rated. (6) The waiting period for preexisting conditions for each policy listed pursuant to paragraphs (1) and (2). (e) The consumer rate guide prepared pursuant to subdivision (d) shall be distributed using all of the following methods: (1) Through Health Insurance Counseling and Advocacy Program (HICAP) offices. (2) By telephone, using the department’s consumer toll-free telephone number. (3) On the department’s internet website. (4) In addition to the distribution methods described in paragraphs (1) to (3), inclusive, each insurer that markets Medicare supplement insurance or Medicare supplement contracts in this state shall provide on the application form a statement that reads as follows: “A rate guide is available that compares the policies sold by different insurers. You can obtain a copy of this rate guide by calling the Department of Insurance’s consumer toll-free telephone number (1-800-927-HELP), by calling the Health Insurance Counseling and Advocacy Program (HICAP) toll-free telephone number (1-800-434-0222), or by accessing the Department of Insurance’s internet website (www.insurance.ca.gov).” (Amended by Stats. 2019, Ch. 157, Sec. 8. (SB 784) Effective July 30, 2019.)
  170. 10192.21.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Agents must use reasonable efforts to judge whether a recommended Medicare supplement policy or certificate is appropriate. A sale that would give an individual more than one such policy or certificate is prohibited, and issuers may not issue one to a person enrolled in Medicare Part C unless coverage starts after Part C ends.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.21. (a) In recommending the purchase or replacement of any Medicare supplement policy or certificate, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement. (b) Any sale of a Medicare supplement policy or certificate that will provide an individual more than one Medicare supplement policy or certificate is prohibited. (c) An issuer shall not issue a Medicare supplement policy or certificate to an individual enrolled in Medicare Part C unless the effective date of the coverage is after the termination date of the individual’s coverage under Medicare Part C. (Amended by Stats. 2005, Ch. 206, Sec. 31. Effective January 1, 2006.)
  171. 10192.22.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    An issuer must report certain Medicare supplement policy information by March 1 each year for residents who have more than one such policy or certificate, and the items must be grouped by individual policyholder.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.22. (a) On or before March 1 of each year, an issuer shall report the following information for every individual resident of this state for which the issuer has in force more than one Medicare supplement policy or certificate: (1) Policy and certificate number. (2) Date of issuance. (b) The items set forth above must be grouped by individual policyholder. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  172. 10192.23.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    When a Medicare supplement policy or certificate replaces another one, the replacing issuer must waive certain waiting and related periods for similar benefits, and if the prior policy has been in effect for at least six months, the replacement policy may not include those periods for similar benefits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.23. (a) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new Medicare supplement policy or certificate for similar benefits to the extent that time was spent under the original policy. (b) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate that has been in effect for at least six months, the replacing policy shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods for benefits similar to those contained in the original policy or certificate. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  173. 10192.24.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Issuers of Medicare supplement policies or certificates must follow federal genetic nondiscrimination rules, including limits on using genetic information, and may not deny, condition, or price coverage based on genetic information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.24. This section applies to all policies with policy years beginning on or after May 21, 2009. (a) In addition to the requirements set forth under Sections 10140 and 10143, an issuer of a Medicare supplement policy or certificate shall adhere to the requirements imposed by the federal Genetic Information Nondiscrimination Act of 2008 (Public Law 110-233) as follows: (1) The issuer shall not deny or condition the issuance or effectiveness of the policy or certificate, including the imposition of any exclusion of benefits under the policy based on a preexisting condition, on the basis of the genetic information with respect to that individual or a family member of the individual. (2) The issuer shall not discriminate in the pricing of the policy or certificate, including the adjustment of premium rates, of an individual on the basis of the genetic information with respect to that individual or a family member of the individual. (b) Nothing in subdivision (a) shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, to do either of the following: (1) Deny or condition the issuance or effectiveness of the policy or certificate or increase the premium for a group based on the manifestation of a disease or disorder of an insured or applicant. (2) Increase the premium for any policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy. For purposes of this paragraph, the manifestation of a disease or disorder in one individual shall not also be used as genetic information about other group members and to further increase the premium for the group. (c) An issuer of a Medicare supplement policy or certificate shall not request or require an individual or a family member of that individual to undergo a genetic test. (d) Subdivision (c) shall not be construed to preclude an issuer of a Medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a determination regarding payment, as defined for the purposes of applying the regulations promulgated under Part C of Title XI and Section 264 of the Health Insurance Portability and Accountability Act of 1996, as may be revised from time to time, and consistent with subdivision (a). (e) For purposes of carrying out subdivision (d), an issuer of a Medicare supplement policy or certificate may request only the minimum amount of information necessary to accomplish the intended purpose. (f) An issuer of a Medicare supplement policy or certificate shall not request, require, seek, or purchase genetic information for underwriting purposes. (g) An issuer of a Medicare supplement policy or certificate shall not request, require, seek, or purchase genetic information with respect to any individual or a family member of that individual prior to the individual’s enrollment under the policy in connection with that enrollment. (h) If an issuer of a Medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual or a family member of that individual, the request, requirement, or purchase shall not be considered a violation of subdivision (g) if the request, requirement, or purchase is not in violation of subdivision (f). However, the issuer shall not use any genetic information obtained under this section for any prohibited purpose described in this section or in Sections 10140 and 10143. (i) For the purposes of this section, the following definitions shall apply: (1) “Issuer of a Medicare supplement policy or certificate” includes a third-party administrator, or other person acting for or on behalf of an issuer. (2) “Family member” means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of the individual. (3) “Genetic information” means, with respect to any individual, information about the individual’s genetic tests, the genetic tests of family members of the individual, and the manifestation of a disease or disorder in family members of the individual. The term includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by the individual or any family member of the individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman includes genetic information of any fetus carried by that pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member. The term “genetic information” does not include information about the sex or age of any individual. (4) “Genetic services” means a genetic test, genetic education, or genetic counseling, including obtaining, interpreting, or assessing genetic information. (5) “Genetic test” means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detect genotypes, mutations, or chromosomal changes. The term “genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved. (6) “Underwriting purposes” includes all of the following: (A) Rules for, or determination of, eligibility, including enrollment and continued eligibility, for benefits under the policy. (B) The computation of premium or contribution amounts under the policy. (C) The application of any preexisting condition exclusion under the policy. (D) Other activities related to the creation, renewal, or replacement of a policy of health insurance or health benefits. (Added by Stats. 2009, Ch. 10, Sec. 27. Effective July 2, 2009.)
  174. 10192.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section says Article 6 generally applies to Medicare supplement policies and related certificates, subject to stated exceptions, and the commissioner may issue regulations to carry it out.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.3. (a) Except as otherwise provided in this section or in Sections 10192.7, 10192.12, 10192.13, 10192.16, and 10192.21, this article shall apply to all Medicare supplement policies advertised, solicited, or issued for delivery in this state on or after January 1, 2001, and to all certificates delivered in this state under a group Medicare supplement master policy agreement that have been advertised, solicited, or issued for delivery in this state on or after that date. (b) This article shall not apply to a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations. (c) This article shall not apply to Medicare supplement policies subject to Article 3.5 (commencing with Section 1358.1) of Chapter 2.2 of Division 2 of the Health and Safety Code. (d) The commissioner may, from time to time, promulgate regulations to implement this article. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  175. 10192.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section defines terms used in the Medicare supplement policies article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.4. The following definitions apply for the purposes of this article: (a) “Applicant” means: (1) The person who seeks to contract for insurance benefits, in the case of an individual Medicare supplement policy. (2) The proposed certificate holder, in the case of a group Medicare supplement policy. (b) “Bankruptcy” means that situation in which a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state. (c) “Certificate” means a certificate issued for delivery in this state under a group Medicare supplement policy. (d) “Certificate form” means the form on which the certificate is issued for delivery by the issuer. (e) “Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than 63 days. (f) (1) “Creditable coverage” means, with respect to an individual, coverage of the individual provided under any of the following: (A) Any individual or group contract, policy, certificate, or program that is written or administered by a health care service plan, health insurer, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage. (B) Part A or B of Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395c et seq.) (Medicare). (C) Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) (Medicaid (known as Medi-Cal in California)), other than coverage consisting solely of benefits under Section 1928 of that act. (D) Chapter 55 of Title 10 of the United States Code (CHAMPUS). (E) A medical care program of the Indian Health Service or of a tribal organization. (F) A state health benefits risk pool. (G) A health plan offered under Chapter 89 of Title 5 of the United States Code (Federal Employees Health Benefits Program). (H) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996. (I) A health benefit plan under Section 5(e) of the federal Peace Corps Act (Section 2504(e) of Title 22 of the United States Code). (J) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (K) Any other creditable coverage as defined by subsection (c) of Section 2701 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg(c)). (2) “Creditable coverage” shall not include one or more, or any combination of, the following: (A) Coverage only for accident or disability income insurance, or any combination thereof. (B) Coverage issued as a supplement to liability insurance. (C) Liability insurance, including general liability insurance and automobile liability insurance. (D) Workers’ compensation or similar insurance. (E) Automobile medical payment insurance. (F) Credit-only insurance. (G) Coverage for onsite medical clinics. (H) Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits. (3) “Creditable coverage” shall not include the following benefits if they are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan: (A) Limited scope dental or vision benefits. (B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof. (C) Other similar, limited benefits as are specified in federal regulations. (4) “Creditable coverage” shall not include the following benefits if offered as independent, noncoordinated benefits: (A) Coverage only for a specified disease or illness. (B) Hospital indemnity or other fixed indemnity insurance. (5) “Creditable coverage” shall not include the following if offered as a separate policy, certificate, or contract of insurance: (A) Medicare supplemental health insurance as defined under Section 1882(g)(1) of the federal Social Security Act. (B) Coverage supplemental to the coverage provided under Chapter 55 of Title 10 of the United States Code. (C) Similar supplemental coverage provided to coverage under a group health plan. (g) “Employee welfare benefit plan” means a plan, fund, or program of employee benefits as defined in Section 1002 of Title 29 of the United States Code (Employee Retirement Income Security Act). (h) “Insolvency” means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer’s state of domicile. (i) “Issuer” includes insurance companies, fraternal benefit societies, and any other entity delivering, or issuing for delivery, Medicare supplement policies or certificates in this state, except entities subject to Article 3.5 (commencing with Section 1358.1) of Chapter 2.2 of Division 2 of the Health and Safety Code. (j) “Medi-Cal” means California’s version of Medicaid under Title XIX of the federal Social Security Act. (k) “Medicare” means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended. (l) “Medicare Advantage plan” means a plan of coverage for health benefits under Medicare Part C and includes: (1) Coordinated care plans that provide health care services, including, but not limited to, health care service plans (with or without a point-of-service option), plans offered by provider-sponsored organizations, and preferred provider organizations plans. (2) Medical savings account plans coupled with a contribution into a Medicare Advantage medical savings account. (3) Medicare Advantage private fee-for-service plans. (m) “Medicare supplement policy” means a group or individual policy of health insurance, other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Sec. 1395mm) or an issued policy under a demonstration project specified in Section 1395ss(g)(1) of Title 42 of the United States Code, that is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare. “Medicare supplement policy” does not include a Medicare Advantage plan established under Medicare Part C, an outpatient prescription drug plan established under Medicare Part D, or a health care prepayment plan that provides benefits pursuant to an agreement under subparagraph (A) of paragraph (1) of subsection (a) of Section 1833 of the federal Social Security Act. (n) “Policy form” means the form on which the policy is issued for delivery by the issuer. (o) “1990 standardized Medicare supplement benefit plan,” “1990 standardized benefit plan,” or “1990 plan” means a group or individual policy of Medicare supplement insurance issued on or after July 21, 1992, and with an effective date prior to June 1, 2010, and includes Medicare supplement insurance policies and certificates renewed on or after that date which are not replaced by the issuer at the request of the insured. (p) “2010 standardized Medicare supplement benefit plan,” “2010 standardized benefit plan,” or “2010 plan” means a group or individual policy of Medicare supplement insurance issued with an effective date on or after June 1, 2010. (q) “Secretary” means the Secretary of the United States Department of Health and Human Services. (Amended by Stats. 2010, Ch. 328, Sec. 145. (SB 1330) Effective January 1, 2011.)
  176. 10192.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    A Medicare supplement policy or certificate must use the required definitions and may not use more restrictive wording than this section allows.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.5. A policy or certificate shall not be advertised, solicited, or issued for delivery as a Medicare supplement policy or certificate unless the policy or certificate contains definitions or terms that conform to the requirements of this section. (a) (1) “Accident,” “accidental injury,” or “accidental means” shall be defined to employ “result” language and shall not include words that establish an accidental means test or use words such as “external, violent, visible wounds” or other similar words of description or characterization. (2) The definition shall not be more restrictive than the following: “injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.” (3) The definition may provide that injuries shall not include injuries for which benefits are provided or available under any workers’ compensation, employer’s liability, or similar law, unless prohibited by law. (b) “Benefit period” or “Medicare benefit period” shall not be defined more restrictively than as defined in the Medicare Program. (c) “Convalescent nursing home,” “extended care facility,” or “skilled nursing facility” shall not be defined more restrictively than as defined in the Medicare Program. (d) (1) “Health care expenses” means expenses of health maintenance organizations associated with the delivery of health care services, which expenses are analogous to incurred losses of insurers. (2) “Health care expenses” shall not include any of the following: (A) Home office and overhead costs. (B) Advertising costs. (C) Commissions and other acquisition costs. (D) Taxes. (E) Capital costs. (F) Administrative costs. (G) Claims processing costs. (e) “Hospital” may be defined in relation to its status, facilities, and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare Program. (f) “Medicare” shall be defined in the policy and certificate. “Medicare” may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended,” or “Title I, Part I of Public Law 89-97, as enacted by the 89th Congress and popularly known as the Health Insurance for the Aged Act, as amended,” or words of similar import. (g) “Medicare eligible expenses” shall mean expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare. (h) “Physician” shall not be defined more restrictively than as defined in the Medicare Program. (i) (1) “Sickness” shall not be defined more restrictively than as follows: “sickness means illness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force.” (2) The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any workers’ compensation, occupational disease, employer’s liability, or similar law. (Amended by Stats. 2005, Ch. 206, Sec. 18. Effective January 1, 2006.)
  177. 10192.55.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    For Medicare supplement policies, insurers, brokers, agents, and others in the insurance business owe policyholders and prospective policyholders duties of honesty and good faith and fair dealing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.55. (a) With regard to Medicare supplement policies, all insurers, brokers, agents, and others engaged in the business of insurance owe a policyholder or a prospective policyholder a duty of honesty, and a duty of good faith and fair dealing. (b) Conduct of an insurer, broker, or agent during the offer and sale of a Medicare supplement policy previous to the purchase is relevant to any action alleging a breach of the duty of honesty, and a duty of good faith and fair dealing set forth in subdivision (a). (Amended by Stats. 2001, Ch. 328, Sec. 4. Effective January 1, 2002.)
  178. 10192.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section restricts Medicare supplement policies from having coverage limits more restrictive than Medicare and limits how they may handle preexisting conditions and outpatient drug coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.6. (a) Except for permitted preexisting condition clauses as described in Sections 10192.7, 10192.8, and 10192.81, a policy or certificate shall not be advertised, solicited, or issued for delivery as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare. (b) A Medicare supplement policy or certificate shall not use waivers to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions. (c) A Medicare supplement policy or certificate in force shall not contain benefits that duplicate benefits provided by Medicare. (d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of Section 10192.8, a Medicare supplement policy with benefits for outpatient prescription drugs that was issued prior to January 1, 2006, shall be renewed for current policyholders, at the option of the policyholder, who do not enroll in Medicare Part D. (2) A Medicare supplement policy with benefits for outpatient prescription drugs shall not be issued on and after January 1, 2006. (3) On and after January 1, 2006, a Medicare supplement policy with benefits for outpatient prescription drugs shall not be renewed after the policyholder enrolls in Medicare Part D unless both of the following conditions exist: (A) The policy is modified to eliminate outpatient prescription drug coverage for outpatient prescription drug expenses incurred after the effective date of the individual’s coverage under a Medicare Part D plan. (B) The premium is adjusted to reflect the elimination of outpatient prescription drug coverage at the time of enrollment in Medicare Part D, accounting for any claims paid if applicable. (Amended by Stats. 2009, Ch. 10, Sec. 16. Effective July 2, 2009.)
  179. 10192.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    A policy or certificate may not be advertised, solicited, or issued for delivery as a Medicare supplement policy or certificate before January 1, 2001, unless it meets or exceeds the code requirements that were already in effect before that date.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.7. A policy or certificate shall not be advertised, solicited, or issued for delivery as a Medicare supplement policy or certificate prior to January 1, 2001, unless it meets or exceeds requirements applicable pursuant to this code that were in effect prior to that date. (Added by Stats. 2000, Ch. 706, Sec. 4. Effective January 1, 2001.)
  180. 10192.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Medicare supplement policies must follow specified benefit standards, limits, and renewal rules, and they cannot be sold or issued unless they comply.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.8. The following standards are applicable to all Medicare supplement policies or certificates advertised, solicited, or issued for delivery on or after January 1, 2001, and with an effective date prior to June 1, 2010. A policy or certificate shall not be advertised, solicited, or issued for delivery as a Medicare supplement policy or certificate unless it complies with these benefit standards. (a) The following general standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this article: (1) A Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage. (2) A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. (3) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with those changes. (4) A Medicare supplement policy or certificate shall not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium. (5) Each Medicare supplement policy shall be guaranteed renewable or noncancelable. (A) The issuer shall not cancel or nonrenew the policy solely on the ground of health status of the individual. (B) The issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or misrepresentation which is shown by the issuer to be material to the acceptance for coverage. The contestability period for Medicare supplement insurance shall be two years. (C) If the Medicare supplement policy is terminated by the master policyholder and is not replaced as provided under subparagraph (E), the issuer shall offer certificate holders an individual Medicare supplement policy that, at the option of the certificate holder, either provides for continuation of the benefits contained in the group policy or provides for benefits that otherwise meet the requirements of one of the standardized policies defined in this article. (D) If an individual is a certificate holder in a group Medicare supplement policy and membership in the group is terminated, the issuer shall either offer the certificate holder the conversion opportunity described in subparagraph (C) or, at the option of the group policyholder, shall offer the certificate holder continuation of coverage under the group policy. (E) (i) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced. (ii) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate that has been in force for six months or more, the replacing issuer shall not impose an exclusion or limitation based on a preexisting condition. If the original coverage has been in force for less than six months, the replacing issuer shall waive any time period applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new policy or certificate to the extent the time was spent under the original coverage. (F) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), the policy as modified as a result of that act shall be deemed to satisfy the guaranteed renewal requirements of this paragraph. (6) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or to payment of the maximum benefits. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss. (7) (A) (i) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to Medi-Cal, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to assistance. Upon receipt of timely notice, the insurer shall return directly to the insured that portion of the premium attributable to the period of Medi-Cal eligibility, subject to adjustment for paid claims. If suspension occurs and if the policyholder or certificate holder loses entitlement to Medi-Cal, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the policyholder or certificate holder provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement, or equivalent coverage shall be provided if the prior form is no longer available. (ii) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for any period that may be provided by federal regulation if the policyholder is entitled to benefits under Section 226(b) of the Social Security Act and is covered under a group health plan, as defined in Section 1862(b)(1)(A)(v) of the Social Security Act. If suspension occurs and the policyholder or certificate holder loses coverage under the group health plan, the policy or certificate shall be automatically reinstituted, effective as of the date of loss of coverage if the policyholder provides notice within 90 days of the date of the loss of coverage. (B) Reinstitution of coverages: (i) Shall not provide for any waiting period with respect to treatment of preexisting conditions. (ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension. If the suspended Medicare supplement policy provided coverage for outpatient prescription drugs, reinstitution of the policy for a Medicare Part D enrollee shall not include coverage for outpatient prescription drugs but shall otherwise provide coverage that is substantially equivalent to the coverage in effect before the date of suspension. (iii) Shall provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended. (8) If an issuer makes a written offer to the Medicare supplement policyholders or certificate holders of one or more of its plans, to exchange during a specified period from his or her 1990 standardized plan, as described in Section 10192.9, to a 2010 standardized plan, as described in Section 10192.91, the offer and subsequent exchange shall comply with the following requirements: (A) An issuer need not provide justification to the commissioner if the insured replaces a 1990 standardized policy or certificate with an issue age rated 2010 standardized policy or certificate at the insured’s original issue age and duration. If an insured’s policy or certificate to be replaced is priced on an issue age rate schedule at the time of that offer, the rate charged to the insured for the new exchanged policy shall recognize the policy reserve buildup, due to the prefunding inherent in the use of an issue age rate basis, for the benefit of the insured. The method proposed to be used by an issuer shall be filed with the commissioner. (B) The rating class of the new policy or certificate shall be the class closest to the insured’s class of the replaced coverage. (C) An issuer shall not apply new preexisting condition limitations or a new incontestability period to the new policy for those benefits contained in the exchanged 1990 standardized policy or certificate of the insured, but may apply preexisting condition limitations of no more than six months to any added benefits contained in the new 2010 standardized policy or certificate not contained in the exchanged policy. This subparagraph shall not apply to an applicant who is guaranteed issue under Section 10192.11 or 10192.12. (D) The new policy or certificate shall be offered to all policyholders or certificate holders within a given plan, except where the offer or issue would be in violation of state or federal law. (9) A Medicare supplement policy shall not limit coverage exclusively to a single disease or affliction. (b) With respect to the standards for basic (core) benefits for benefit plans A to J, inclusive, every issuer shall make available a policy or certificate including only the following basic “core” package of benefits to each prospective insured. An issuer may make available to prospective insureds any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it. However, the benefits described in paragraphs (6) and (7) shall not be offered so long as California is required to disallow these benefits for Medicare beneficiaries by the Centers for Medicare and Medicaid Services or other agent of the federal government under Section 1395ss of Title 42 of the United States Code. (1) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day to the 90th day, inclusive, in any Medicare benefit period. (2) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used. (3) Upon exhaustion of the Medicare hospital inpatient coverage including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance. (4) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations. (5) Coverage for the coinsurance amount, or in the case of hospital outpatient department services, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible. (6) Coverage of the actual cost, up to the legally billed amount, of an annual mammogram as provided in Section 10123.81, to the extent not paid by Medicare. (7) Coverage of the actual cost, up to the legally billed amount, of an annual cervical cancer screening test as provided in Section 10123.18, to the extent not paid by Medicare. (c) The following additional benefits shall be included in Medicare supplement benefit plans B to J, inclusive, only as provided by Section 10192.9. (1) With respect to the Medicare Part A deductible, coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period. (2) With respect to skilled nursing facility care, coverage for the actual billed charges up to the coinsurance amount from the 21st day to the 100th day, inclusive, in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A. (3) With respect to the Medicare Part B deductible, coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. (4) With respect to 80 percent of the Medicare Part B excess charges, coverage for 80 percent of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare Program or state law, and the Medicare-approved Part B charge. If the insurer limits payment to a limiting charge, the insurer has the burden to establish that amount as the legal limit. (5) With respect to 100 percent of the Medicare Part B excess charges, coverage for all of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare Program or state law, and the Medicare-approved Part B charge. If the insurer limits payment to a limiting charge, the insurer has the burden to establish that amount as the legal limit. (6) With respect to the basic outpatient prescription drug benefit, coverage for 50 percent of outpatient prescription drug charges, after a two hundred fifty dollar ($250) calendar year deductible, to a maximum of one thousand two hundred fifty dollars ($1,250) in benefits received by the insured per calendar year, to the extent not covered by Medicare. On and after January 1, 2006, no Medicare supplement policy may be sold or issued if it includes a prescription drug benefit. (7) With respect to the extended outpatient prescription drug benefit, coverage for 50 percent of outpatient prescription drug charges, after a two hundred fifty dollar ($250) calendar year deductible, to a maximum of three thousand dollars ($3,000) in benefits received by the insured per calendar year, to the extent not covered by Medicare. On and after January 1, 2006, no Medicare supplement policy may be sold or issued if it includes a prescription drug benefit. (8) With respect to medically necessary emergency care in a foreign country, coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of two hundred fifty dollars ($250), and a lifetime maximum benefit of fifty thousand dollars ($50,000). For purposes of this benefit, “emergency care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. (9) With respect to the following, reimbursement shall be for the actual charges up to 100 percent of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) codes, up to a maximum of one hundred twenty dollars ($120) annually under this benefit, however, this benefit shall not include payment for any procedure covered by Medicare: (A) An annual clinical preventive medical history and physical examination that may include tests and services from subparagraph (B) and patient education to address preventive health care measures. (B) The following screening tests or preventive services that are not covered by Medicare, the selection and frequency of which are determined to be medically appropriate by the attending physician: (i) Fecal occult blood test. (ii) Mammogram. (C) Influenza vaccine administered at any appropriate time during the year. (10) With respect to the at-home recovery benefit, coverage for the actual charges up to forty dollars ($40) per visit and an annual maximum of one thousand six hundred dollars ($1,600) per year to provide short-term, at-home assistance with activities of daily living for those recovering from an illness, injury, or surgery. (A) For purposes of this benefit, the following definitions shall apply: (i) “Activities of daily living” include, but are not limited to, bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings. (ii) “Care provider” means a duly qualified or licensed home health aide or homemaker, or a personal care aide or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry. (iii) “Home” shall mean any place used by the insured as a place of residence, provided that the place would qualify as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility shall not be considered the insured’s place of residence. (iv) “At-home recovery visit” means the period of a visit required to provide at-home recovery care, without any limit on the duration of the visit, except that each consecutive four hours in a 24-hour period of services provided by a care provider is one visit. (B) With respect to coverage requirements and limitations, the following shall apply: (i) At-home recovery services provided shall be primarily services that assist in activities of daily living. (ii) The insured’s attending physician shall certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare. (iii) Coverage is limited to the following: (I) No more than the number and type of at-home recovery visits certified as necessary by the insured’s attending physician. The total number of at-home recovery visits shall not exceed the number of Medicare-approved home health care visits under a Medicare-approved home care plan of treatment. (II) The actual charges for each visit up to a maximum reimbursement of forty dollars ($40) per visit. (III) One thousand six hundred dollars ($1,600) per calendar year. (IV) Seven visits in any one week. (V) Care furnished on a visiting basis in the insured’s home. (VI) Services provided by a care provider as defined in subparagraph (A). (VII) At-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded. (VIII) At-home recovery visits received during the period the insured is receiving Medicare-approved home care services or no more than eight weeks after the service date of the last Medicare-approved home health care visit. (C) Coverage is excluded for the following: (i) Home care visits paid for by Medicare or other government programs. (ii) Care provided by family members, unpaid volunteers, or providers who are not care providers. (d) The standardized Medicare supplement benefit plan “K” shall consist of the following benefits: (1) Coverage of 100 percent of the Medicare Part A hospital coinsurance amount for each day used from the 61st to the 90th day, inclusive, in any Medicare benefit period. (2) Coverage of 100 percent of the Medicare Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st to the 150th day, inclusive, in any Medicare benefit period. (3) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment for this benefit as payment in full and shall not bill the insured for any balance. (4) With respect to the Medicare Part A deductible, coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation described in paragraph (10) is met. (5) With respect to skilled nursing facility care, coverage for 50 percent of the coinsurance amount for each day used from the 21st day to the 100th day, inclusive, in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation described in paragraph (10) is met. (6) With respect to hospice care, coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation described in paragraph (10) is met. (7) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations, until the out-of-pocket limitation described in paragraph (10) is met. (8) Except for coverage provided in paragraph (9), coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible, until the out-of-pocket limitation is met as described in paragraph (10). (9) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services, after the policyholder pays the Medicare Part B deductible. (10) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of four thousand dollars ($4,000) in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary. (e) The standardized Medicare supplement benefit plan “L” shall consist of the following benefits: (1) The benefits described in paragraphs (1), (2), (3), and (9) of subdivision (d). (2) With respect to the Medicare Part A deductible, coverage for 75 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation described in paragraph (8) is met. (3) With respect to skilled nursing facility care, coverage for 75 percent of the coinsurance amount for each day used from the 21st day to the 100th day, inclusive, in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation described in paragraph (8) is met. (4) With respect to hospice care, coverage for 75 percent of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation described in paragraph (8) is met. (5) Coverage for 75 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations, until the out-of-pocket limitation described in paragraph (8) is met. (6) Except for coverage provided in paragraph (7), coverage for 75 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation described in paragraph (8) is met. (7) Coverage for 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible. (8) Coverage of 100 percent of the cost sharing for Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of two thousand dollars ($2,000) in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary. (f) An issuer shall prominently indicate through text edits, or by other means acceptable to the commissioner, an amendment made to a Medicare supplement policy form that the department previously approved on the basis that the amendment is consistent with this section. The department may, in its discretion, restrict its review to amendments made to Medicare supplement policy forms that have not previously been found consistent with this section in order to facilitate the availability of amended policy forms that are consistent with the federal Medicare Modernization Act. The department shall not restrict its review if the amendment makes additional changes to the Medicare supplement policy form. (Amended by Stats. 2009, Ch. 10, Sec. 17. Effective July 2, 2009.)
  181. 10192.81.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section sets benefit standards for Medicare supplement policies and certificates, including limits on preexisting-condition exclusions, renewal rules, suspension/reinstatement rights, and required coverage items.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.81. The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit standards. No issuer may offer any 1990 standardized Medicare supplement benefit plan for sale with an effective date on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates issued with an effective date prior to June 1, 2010, remain subject to the requirements of Section 10192.8. (a) The following general standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this article: (1) A Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage. (2) A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. (3) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with those changes. (4) A Medicare supplement policy or certificate shall not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium. (5) Each Medicare supplement policy shall be guaranteed renewable. (A) The issuer shall not cancel or nonrenew the policy solely on the ground of health status of the individual. (B) The issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation which is shown by the issuer to be material to the acceptance for coverage. The contestability period for Medicare supplement insurance shall be two years, pursuant to Section 10350.2. (C) If the Medicare supplement policy is terminated by the master policyholder and is not replaced as provided under subparagraph (E), the issuer shall offer certificate holders an individual Medicare supplement policy which, at the option of the certificate holder, does one of the following: (i) Provides for continuation of the benefits contained in the group policy. (ii) Provides for benefits that otherwise meet the requirements of one of the standardized policies defined in this article. (D) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall do one of the following: (i) Offer the certificate holder the conversion opportunity described in subparagraph (C). (ii) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy. (E) (i) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced. (ii) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate that has been in force for six months or more, the replacing issuer shall not impose an exclusion or limitation based on a preexisting condition. If the original coverage has been in force for less than six months, the replacing issuer shall waive any time period applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new policy or certificate to the extent the time was spent under the original coverage. (6) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss. (7) (A) (i) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Medi-Cal, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to assistance. Upon receipt of timely notice, the insurer shall return directly to the insured that portion of the premium attributable to the period of Medi-Cal eligibility, subject to adjustment for paid claims. (ii) If suspension occurs and if the policyholder or certificate holder loses entitlement to medical assistance under Medi-Cal, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the policyholder or certificate holder provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement or equivalent coverage shall be provided if the prior form is no longer available. (iii) Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder if the policyholder is entitled to benefits under Section 226(b) of the federal Social Security Act and is covered under a group health plan (as defined in Section 1862(b)(1)(A)(v) of the federal Social Security Act). If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy shall be automatically reinstituted (effective as of the date of loss of coverage) if the policyholder provides notice of loss of coverage within 90 days after the date of the loss and pays the applicable premium. (B) Reinstitution of coverages shall comply with all of the following requirements: (i) Not provide for any waiting period with respect to treatment of preexisting conditions. (ii) Provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension. (iii) Provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended. (8) A Medicare supplement policy shall not limit coverage exclusively to a single disease or affliction. (9) A Medicare supplement policy shall provide an examination period of 30 days after the receipt of the policy by the applicant for purposes of review, during which time the applicant may return the policy as described in subdivision (e) of Section 10192.17. (b) With respect to the standards for basic (core) benefits for benefit plans A, B, C, D, F, high deductible F, G, M, and N, every issuer of Medicare supplement insurance benefit plans shall make available a policy or certificate including only the following basic “core” package of benefits to each prospective insured. An issuer may make available to prospective insureds any of the other Medicare Supplement Insurance Benefit Plans in addition to the basic (core) package, but not in lieu of it. However, the benefits described in paragraphs (7) and (8) shall not be offered so long as California is required to disallow these benefits for Medicare beneficiaries by the Centers for Medicare and Medicaid Services or other agent of the federal government under Section 1395ss of Title 42 of the United States Code. (1) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day, inclusive, in any Medicare benefit period. (2) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used. (3) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance. (4) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations. (5) Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible. (6) Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses. (7) Coverage of the actual cost, up to the legally billed amount, of an annual mammogram as provided in Section 10123.81, to the extent not paid by Medicare. (8) Coverage of the actual cost, up to the legally billed amount, of an annual cervical cancer screening test as provided in Section 10123.18, to the extent not paid by Medicare. (c) The following additional benefits shall be included in Medicare supplement benefit plans B, C, D, F, high deductible F, G, M, and N, consistent with the plan type and benefits for each plan as provided in Section 10192.91: (1) With respect to the Medicare Part A deductible, coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period. (2) With respect to the Medicare Part A deductible, coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period. (3) With respect to skilled nursing facility care, coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A. (4) With respect to the Medicare Part B deductible, coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. (5) With respect to 100 percent of the Medicare Part B excess charges, coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare Program or state law, and the Medicare-approved Part B charge. (6) With respect to medically necessary emergency care in a foreign country, coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of two hundred fifty dollars ($250), and a lifetime maximum benefit of fifty thousand dollars ($50,000). For purposes of this benefit, “emergency care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. (Amended by Stats. 2010, Ch. 328, Sec. 146. (SB 1330) Effective January 1, 2011.)
  182. 10192.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    Medicare supplement issuers must follow standardized benefit-plan rules, limit what can be sold, and stop including outpatient prescription drug benefits in policies sold on or after January 1, 2006.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.9. The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state on or after July 1, 1992, and with an effective date prior to June 1, 2010. (a) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic (core) benefits, as defined in subdivision (b) of Section 10192.8. (b) No groups, packages, or combinations of Medicare supplement benefits other than those listed in this section shall be offered for sale in this state, except as may be permitted by subdivision (f) and by Section 10192.10. (c) Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans A to L, inclusive, listed in subdivision (e), and shall conform to the definitions in Section 10192.4. Each benefit shall be structured in accordance with the format provided in subdivisions (b), (c), (d), and (e) of Section 10192.8 and list the benefits in the order listed in subdivision (e). For purposes of this section, “structure, language, and format” means style, arrangement, and overall content of a benefit. (d) An issuer may use, in addition to the benefit plan designations required in subdivision (c), other designations to the extent permitted by law. (e) With respect to the makeup of benefit plans, the following shall apply: (1) Standardized Medicare supplement benefit plan A shall be limited to the basic (core) benefit common to all benefit plans, as defined in subdivision (b) of Section 10192.8. (2) Standardized Medicare supplement benefit plan B shall include only the following: the core benefit, plus the Medicare Part A deductible as defined in paragraph (1) of subdivision (c) of Section 10192.8. (3) Standardized Medicare supplement benefit plan C shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (3), and (8) of subdivision (c) of Section 10192.8, respectively. (4) Standardized Medicare supplement benefit plan D shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, medically necessary emergency care in a foreign country, and the at-home recovery benefit as defined in paragraphs (1), (2), (8), and (10) of subdivision (c) of Section 10192.8, respectively. (5) Standardized Medicare supplement benefit plan E shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, medically necessary emergency care in a foreign country, and preventive medical care as defined in paragraphs (1), (2), (8), and (9) of subdivision (c) of Section 10192.8, respectively. (6) Standardized Medicare supplement benefit plan F shall include only the following: the core benefit, plus the Medicare Part A deductible, the skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section 10192.8, respectively. (7) Standardized Medicare supplement benefit high deductible plan F shall include only the following: 100 percent of covered expenses following the payment of the annual high deductible plan F deductible. The covered expenses include the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section 10192.8, respectively. The annual high deductible plan F deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan F policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan F deductible shall be one thousand five hundred dollars ($1,500) for 1998 and 1999, and shall be based on the calendar year, as adjusted annually thereafter by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). (8) Standardized Medicare supplement benefit plan G shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, 80 percent of the Medicare Part B excess charges, medically necessary emergency care in a foreign country, and the at-home recovery benefit as defined in paragraphs (1), (2), (4), (8), and (10) of subdivision (c) of Section 10192.8, respectively. (9) Standardized Medicare supplement benefit plan H shall consist of only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, basic outpatient prescription drug benefit, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (6), and (8) of subdivision (c) of Section 10192.8, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold on or after January 1, 2006. (10) Standardized Medicare supplement benefit plan I shall consist of only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, basic outpatient prescription drug benefit, medically necessary emergency care in a foreign country, and at-home recovery benefit as defined in paragraphs (1), (2), (5), (6), (8), and (10) of subdivision (c) of Section 10192.8, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold on or after January 1, 2006. (11) Standardized Medicare supplement benefit plan J shall consist of only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care, and at-home recovery benefit as defined in paragraphs (1), (2), (3), (5), (7), (8), (9), and (10) of subdivision (c) of Section 10192.8, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold on or after January 1, 2006. (12) Standardized Medicare supplement benefit high deductible plan J shall consist of only the following: 100 percent of covered expenses following the payment of the annual high deductible plan J deductible. The covered expenses include the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care benefit, and at-home recovery benefit as defined in paragraphs (1), (2), (3), (5), (7), (8), (9), and (10) of subdivision (c) of Section 10192.8, respectively. The annual high deductible plan J deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan J policy, and shall be in addition to any other specific benefit deductibles. The annual deductible shall be one thousand five hundred dollars ($1,500) for 1998 and 1999, and shall be based on a calendar year, as adjusted annually thereafter by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold on or after January 1, 2006. (13) Standardized Medicare supplement benefit plan K shall consist of only those benefits described in subdivision (d) of Section 10192.8. (14) Standardized Medicare supplement benefit plan L shall consist of only those benefits described in subdivision (e) of Section 10192.8. (f) An issuer may, with the prior approval of the commissioner, offer policies or certificates with new or innovative benefits in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to Medicare supplement insurance, that are not otherwise available and that are cost-effective and offered in a manner that is consistent with the goal of simplification of Medicare supplement policies. On and after January 1, 2006, the innovative benefit shall not include an outpatient prescription drug benefit. (Amended by Stats. 2009, Ch. 10, Sec. 19. Effective July 2, 2009.)
  183. 10192.91.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section sets standards for Medicare supplement policies and certificates and limits what issuers may sell or advertise unless the policy complies. It also requires certain benefit forms, restricts changing standardized plans with new benefits, and adds disclosure rules for premium line items.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.91. The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit plan standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued with an effective date before June 1, 2010, remain subject to the requirements of Section 10192.9. (a) (1) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic (core) benefits, as defined in subdivision (b) of Section 10192.81. (2) If an issuer makes available any of the additional benefits described in subdivision (c) of Section 10192.81, or offers standardized benefit plan K or L, as described in paragraphs (8) and (9) of subdivision (e), then the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic core benefits as described in paragraph (1), a policy form or certificate form containing either standardized benefit plan C, as described in paragraph (3) of subdivision (e), or standardized benefit plan F, as described in paragraph (5) of subdivision (e). (b) No groups, packages, or combinations of Medicare supplement benefits other than those listed in this section shall be offered for sale in this state, except as may be permitted in subdivision (f) and by Section 10192.10. (c) Benefit plans shall be uniform in structure, language, designation, and format to the standard benefit plans listed in subdivision (e) and conform to the definitions in Section 10192.4. Each benefit shall be structured in accordance with the format provided in subdivisions (b) and (c) of Section 10192.81; or, in the case of plan K or L, in paragraph (8) or (9) of subdivision (e) and list the benefits in the order shown in subdivision (e). For purposes of this section, “structure, language, and format” means style, arrangement, and overall content of a benefit. (d) In addition to the benefit plan designations required in subdivision (c), an issuer may use other designations to the extent permitted by law. (e) With respect to the makeup of 2010 standardized benefit plans, the following shall apply: (1) Standardized Medicare supplement benefit plan A shall include only the basic (core) benefits as defined in subdivision (b) of Section 10192.81. (2) Standardized Medicare supplement benefit plan B shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible as defined in paragraph (1) of subdivision (c) of Section 10192.81. (3) Standardized Medicare supplement benefit plan C shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (4), and (6) of subdivision (c) of Section 10192.81, respectively. (4) Standardized Medicare supplement benefit plan D shall include only the following: the basic (core) benefit, as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), and (6) of subdivision (c) of Section 10192.81, respectively. (5) Standardized Medicare supplement benefit plan F shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible, the skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (3), (4), (5), and (6) of subdivision (c) of Section 10192.81, respectively. (6) Standardized Medicare supplement benefit high deductible plan F shall include only the following: 100 percent of covered expenses following the payment of the annual deductible set forth in subparagraph (B). (A) The covered expenses include the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (4), (5), and (6) of subdivision (c) of Section 10192.81, respectively. (B) The annual deductible in high deductible plan F shall consist of out-of-pocket expenses, other than premiums, for services covered by plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be one thousand five hundred dollars ($1,500) and shall be adjusted annually from 1999 by the Secretary of the United States Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). (7) (A) Standardized Medicare supplement benefit plan G shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (5), and (6) of subdivision (c) of Section 10192.81, respectively. (B) Effective January 1, 2020, the standardized benefit plans described in paragraph (4) of subdivision (a) of Section 10192.92 (redesignated high deductible plan G) may be offered to any individual who was eligible for Medicare prior to January 1, 2020. (8) Standardized Medicare supplement benefit plan K shall include only the following: (A) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period. (B) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period. (C) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance. (D) Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subparagraph (J). (E) Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subparagraph (J). (F) Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subparagraph (J). (G) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subparagraph (J). (H) Except for coverage provided in subparagraph (I), coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in subparagraph (J). (I) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible. (J) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of four thousand dollars ($4,000) in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the United States Department of Health and Human Services. (9) Standardized Medicare supplement benefit plan L shall include only the following: (A) The benefits described in subparagraphs (A), (B), (C), and (I) of paragraph (8). (B) The benefit described in subparagraphs (D), (E), (F), (G), and (H) of paragraph (8), but substituting 75 percent for 50 percent. (C) The benefit described in subparagraph (J) of paragraph (8), but substituting two thousand dollars ($2,000) for four thousand dollars ($4,000). (10) Standardized Medicare supplement benefit plan M shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 50 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country, as defined in paragraphs (2), (3), and (6) of subdivision (c) of Section 10192.81, respectively. (11) Standardized Medicare supplement benefit plan N shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 10192.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), and (6) of subdivision (c) of Section 10192.81, respectively, with copayments in the following amounts: (A) The lesser of twenty dollars ($20) or the Medicare Part B coinsurance or copayment for each covered health care provider office visit, including visits to medical specialists. (B) The lesser of fifty dollars ($50) or the Medicare Part B coinsurance or copayment for each covered emergency room visit; however, this copayment shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense. (f) (1) (A) An issuer may, with the prior approval of the commissioner, offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost effective. Approval of new or innovative benefits shall not adversely impact the goal of Medicare supplement simplification. (B) New or innovative benefits shall exclude an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan. (C) Commencing July 1, 2020, the portion of the premium attributed to the new or innovative benefits shall be identified as a separate line item on the payment invoice or bill. (2) In the interest of full and fair disclosure, and to ensure the availability of necessary consumer information to current and prospective policyholders and certificate holders, for purposes of implementing this paragraph, the department shall collaborate with the Department of Managed Health Care, consumer group representatives, and issuers to develop and implement policies and procedures, as necessary, including, but not limited to, all of the following: (A) The development and dissemination of information and material about any new or innovative benefits approved for sale. (B) The revision of materials described in Sections 10192.15 and 10192.18 of this code, and Sections 1358.15 and 1358.18 of the Health and Safety Code, as may be necessary. (C) The standardization of new or innovative benefits, as appropriate, for purposes of allowing consumer comparison of benefits, out-of-pocket costs, and premiums. (3) On or before July 1, 2020, the commissioner may issue guidance to issuers regarding compliance with this section and that guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Any guidance issued pursuant to this subdivision shall be effective only through December 31, 2022, or until the commissioner adopts and effects regulations pursuant to the Administrative Procedure Act, whichever occurs first. (Amended (as amended by Stats. 2019, Ch. 157, Sec. 4) by Stats. 2019, Ch. 549, Sec. 3. (SB 407) Effective January 1, 2020.)
  184. 10192.92.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. )

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    This section sets Medicare supplement policy standards for people newly eligible for Medicare on or after January 1, 2020.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Medicare Supplement Policies [10192.1 - 10192.24] ( Article 6 repealed and added by Stats. 2000, Ch. 706, Sec. 4. ) ## 10192.92. The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state to individuals newly eligible for Medicare on or after January 1, 2020. A policy or certificate that provides coverage of the Medicare Part B deductible shall not be advertised, solicited, delivered, or issued for delivery in the state as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, 2020. All policies must comply with the following benefit standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued to individuals eligible for Medicare before January 1, 2020, remain subject to the requirements of Section 10192.91 or 10192.9, as applicable. (a) The standards and requirements of Section 10192.91 apply to all Medicare supplement policies delivered or issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020, with the following exceptions: (1) Standardized Medicare supplement benefit plan C is redesignated as plan D and shall provide the benefits described in paragraph (3) of subdivision (e) of Section 10192.91 but shall not provide coverage for 100 percent, or any portion, of the Medicare Part B deductible. (2) Standardized Medicare supplement benefit plan F is redesignated as plan G and shall provide the benefits described in paragraph (5) of subdivision (e) of Section 10192.91, but shall not provide coverage for 100 percent, or any portion, of the Medicare Part B deductible. (3) Standardized Medicare supplement benefit plans C, F, and high deductible plan F may not be offered to individuals newly eligible for Medicare on or after January 1, 2020. (4) Standardized Medicare supplement benefit high deductible plan F is redesignated as high deductible plan G and shall provide the benefits described for standardized Medicare supplement benefit high deductible plan F in paragraph (6) of subdivision (e) of Section 10192.91, but shall not provide coverage for 100 percent, or any portion, of the Medicare Part B deductible. The Medicare Part B deductible paid by the beneficiary shall be considered an out-of-pocket expense in meeting the annual deductible under high deductible plan G. (5) The reference to standardized Medicare supplement benefit plan C or F in paragraph (2) of subdivision (a) of Section 10192.91 shall, for purposes of this section, be deemed a reference to standardized Medicare supplement benefit plan D or G, respectively. (b) This section applies only to individuals who are newly eligible for Medicare on or after January 1, 2020. For purposes of this section, “newly eligible Medicare beneficiary” means an individual who satisfies one of the following: (1) The individual has attained 65 years of age on or after January 1, 2020. (2) The individual is entitled to benefits under Medicare Part A pursuant to Section 226(b) or 226A of the federal Social Security Act, or is deemed eligible for benefits under Section 226(a) of the federal Social Security Act, on or after January 1, 2020. (c) For purposes of subdivision (e) of Section 10192.12, in the case of an individual newly eligible for Medicare on or after January 1, 2020, any reference to standardized Medicare supplement benefit plan C, plan F, or high deductible plan F shall be deemed to be a reference to standardized Medicare supplement benefit plan D, plan G, or high deductible plan G, respectively, that meet the requirements of subdivision (a). (d) On or after January 1, 2020, the standardized Medicare supplement benefit plans described in paragraph (4) of subdivision (a) may be offered to any individual who was eligible for Medicare prior to January 1, 2020, in addition to the standardized Medicare supplement benefit plans described in subdivision (e) of Section 10192.91. (Amended by Stats. 2020, Ch. 370, Sec. 220. (SB 1371) Effective January 1, 2021.)
  185. 10198.10.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. )

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    Article 7 becomes operative on January 1, 2014.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. ) ## 10198.10. This article shall become operative on January 1, 2014. (Repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. (AB 1083) Effective January 1, 2013. Note: This section prescribes a delayed operative date (Jan. 1, 2014) for Article 7, commencing with Section 10198.6.)
  186. 10198.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. )

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    This section defines several insurance terms used in the article, including health benefit plan, preexisting condition provision, creditable coverage, waivered condition provision, grandfathered health benefit plan, nongrandfathered health benefit plan, and PPACA.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. ) ## 10198.6. For purposes of this article, the following definitions shall apply: (a) “Health benefit plan” means any group or individual policy of health insurance, as defined in Section 106. The term does not include coverage of Medicare services pursuant to contracts with the United States government or coverage that provides excepted benefits as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10198.61. (b) “Preexisting condition provision” means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insured’s effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. (c) “Creditable coverage” means: (1) Any individual or group policy, contract, or program, that is written or administered by a health insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care insurance, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers’ compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (2) The federal Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (3) The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.). (4) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (5) 10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)). (6) A medical care program of the Indian Health Service or of a tribal organization. (7) A health plan offered under 5 U.S.C. Chapter 89 (commencing with Section 8901) (Federal Employees Health Benefits Program (FEHBP)). (8) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996. (9) A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)). (10) Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (d) “Waivered condition provision” means a contract provision that excludes coverage for charges or expenses incurred during a specified period of time for one or more specific, identified, medical conditions. (e) “Grandfathered health benefit plan” means a health benefit plan that is a grandfathered health plan, as defined in Section 1251 of PPACA. (f) “Nongrandfathered health benefit plan” means a health benefit plan that is not a grandfathered health plan as defined in Section 1251 of PPACA. (g) “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. (Repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. (AB 1083) Effective January 1, 2013. Section operative January 1, 2014, pursuant to Section 10198.10.)
  187. 10198.61.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. )

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    Carriers offering certain supplemental disease or hospital indemnity policies must file annual certification materials with the commissioner and, for first-offered policies, file them at least 30 days before issuance; insurers must also require the insured person to have separate medical, hospital, and surgical coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. ) ## 10198.61. (a) For purposes of this article, “health benefit plan” does not include policies or certificates of specified disease or hospital confinement indemnity provided that the carrier offering those policies or certificates complies with the following: (1) The carrier files, on or before March 1 of each year, a certification with the commissioner that contains the statement and information described in paragraph (2). (2) The certification required in paragraph (1) shall contain the following: (A) A statement from the carrier certifying that policies or certificates described in this section (i) are being offered and marketed as supplemental health insurance and not as a substitute for coverage that provides essential health benefits as defined by the state pursuant to Section 1302 of PPACA, and (ii) the disclosure form as described in Section 10603 contains the following statement prominently on the first page: “This is a supplement to health insurance. It is not a substitute for essential health benefits or minimum essential coverage as defined in federal law.” (B) A summary description of each policy or certificate described in this section, including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender, or other factors, charged for the policies and certificates issued or delivered in this state. (3) In the case of a policy or certificate described in this section and that is offered for the first time in this state for plan years on or after January 1, 2014, the carrier files with the commissioner the information and statement required in paragraph (2) at least 30 days prior to the date such a policy or certificate is issued or delivered in this state. (b) As used in this section, “policies or certificates of specified disease” and “policies or certificates of hospital confinement indemnity” mean policies or certificates of insurance sold to an insured to supplement other health insurance coverage as specified in this section. An insurer issuing a “policy or certificate of specified disease” or a “policy or certificate of hospital confinement indemnity” shall require that the person to be insured is covered by an individual or group policy or contract that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. (Repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. (AB 1083) Effective January 1, 2013. Section operative January 1, 2014, pursuant to Section 10198.10.)
  188. 10198.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. )

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    Health benefit plans cannot impose preexisting-condition or waiting-period limits in the ways described here, and must credit prior creditable coverage when the timing conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. ) ## 10198.7. (a) A health benefit plan for group coverage shall not impose any preexisting condition provision or waivered condition provision upon any individual. (b) (1) A nongrandfathered health benefit plan for individual coverage shall not impose any preexisting condition provision or waivered condition provision upon any individual. (2) A grandfathered health benefit plan for individual coverage shall not exclude coverage on the basis of a waivered condition provision or preexisting condition provision for a period greater than 12 months following the individual’s effective date of coverage, nor limit or exclude coverage for a specific insured by type of illness, treatment, medical condition, or accident, except for satisfaction of a preexisting condition provision or waivered condition provision pursuant to this article. Waivered condition provisions or preexisting condition provisions contained in individual grandfathered health benefit plans may relate only to conditions for which medical advice, diagnosis, care, or treatment, including use of prescription drugs, was recommended or received from a licensed health practitioner during the 12 months immediately preceding the effective date of coverage. (3) In determining whether a preexisting condition provision or a waivered condition provision applies to an individual under this subdivision, a health benefit plan shall credit the time the individual was covered under creditable coverage, provided that the individual becomes eligible for coverage under the succeeding health benefit plan within 62 days of termination of prior coverage and applies for coverage under the succeeding plan within the applicable enrollment period. (c) A health benefit plan for group or individual coverage shall not impose a waiting period. (Amended by Stats. 2021, Ch. 764, Sec. 8. (SB 326) Effective January 1, 2022.)
  189. 10198.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. )

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    This section says the article applies to all health benefit plans that provide benefits to residents of this state.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. ) ## 10198.8. This article applies to all health benefit plans that provide benefits to residents of this state regardless of the situs of the contract or group master policyholder. (Repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. (AB 1083) Effective January 1, 2013. Section operative January 1, 2014, pursuant to Section 10198.10.)
  190. 10198.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. )

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    A group health benefit plan may not use health-status-related factors to set eligibility or continued eligibility rules for an individual or dependent enrolling under the plan.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. The Contract [10110 - 10198.10] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Preexisting Condition Provisions [10198.6 - 10198.10] ( Article 7 repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. ) ## 10198.9. A health benefit plan for group coverage shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related factors: (a) Health status. (b) Medical condition, including physical and mental illnesses. (c) Claims experience. (d) Receipt of health care. (e) Medical history. (f) Genetic information. (g) Evidence of insurability, including conditions arising out of acts of domestic violence. (h) Disability. (i) Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act. (Repealed (in Sec. 12) and added by Stats. 2012, Ch. 852, Sec. 11. (AB 1083) Effective January 1, 2013. Section operative January 1, 2014, pursuant to Section 10198.10.)
  191. 10199.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 1. Purpose and Title [10199- 10199.] ( Article 1 added by Stats. 1990, Ch. 949, Sec. 2. )

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    This chapter’s purpose is to promote the public interest, stop unfair and unlawful health care business practices, and improve advance notice of health coverage cost and benefit changes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 1. Purpose and Title [10199- 10199.] ( Article 1 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199. The purpose of the chapter is to promote the public interest, to prevent unfair and unlawful health care business practices, and to promote adequate consumer and employer advance notice of changes in the cost and benefits of health coverage in order to allow for comparative shopping and to reduce the cost of health coverage. (Added by Stats. 1990, Ch. 949, Sec. 2.)
  192. 10199.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    Certain group health insurers and related plan administrators must give advance written notice before ending or changing coverage, premiums, benefits, or eligibility, and must explain some coverage denials in writing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.1. (a) (1) An insurer or nonprofit hospital service plan or administrator acting on its behalf shall not terminate a group master policy or contract providing hospital, medical, or surgical benefits, increase premiums or charges therefor, reduce or eliminate benefits thereunder, or restrict eligibility for coverage thereunder without providing prior notice of that action. The action shall not become effective unless written notice of the action was delivered by mail to the last known address of the appropriate insurance producer and the appropriate administrator, if any, at least 45 days prior to the effective date of the action and to the last known address of the group policyholder or group contractholder at least 60 days prior to the effective date of the action. If nonemployee certificate holders or employees of more than one employer are covered under the policy or contract, written notice shall also be delivered by mail to the last known address of each nonemployee certificate holder or affected employer or, if the action does not affect all employees and dependents of one or more employers, to the last known address of each affected employee certificate holder, at least 60 days prior to the effective date of the action. (2) The notice delivered pursuant to paragraph (1) for large group health insurance policies shall also include the following information: (A) Whether the rate proposed to be in effect is greater than the average rate increase for individual market products negotiated by the California Health Benefit Exchange for the most recent calendar year for which the rates are final. (B) Whether the rate proposed to be in effect is greater than the average rate increase negotiated by the Board of Administration of the Public Employees’ Retirement System for the most recent calendar year for which the rates are final. (C) Whether the rate change includes any portion of the excise tax paid by the health insurer. (D) How to obtain the rate filing required under Article 4.5 (commencing with Section 10181), including whether the rate change is attributable to changes in medical trend, utilization, or other factors. (E) How to apply to the department to have the proposed rate reviewed by the department if a request is made within 30 days of the notice. (b) A holder of a master group policy or a master group nonprofit hospital service plan contract or administrator acting on its behalf shall not terminate the coverage of, increase premiums or charges for, or reduce or eliminate benefits available to, or restrict eligibility for coverage of a covered person, employer unit, or class of certificate holders covered under the policy or contract for hospital, medical, or surgical benefits without first providing prior notice of the action. The action shall not become effective unless written notice was delivered by mail to the last known address of each affected nonemployee certificate holder or employer, or if the action does not affect all employees and dependents of one or more employers, to the last known address of each affected employee certificate holder, at least 60 days prior to the effective date of the action. (c) A health insurer that declines to offer coverage to or denies enrollment for a large group applying for coverage shall, at the time of the denial of coverage, provide the applicant with the specific reason or reasons for the decision in writing, in clear, easily understandable language. (d) (1) For group health insurance policies, if the department determines that a rate is unreasonable or not justified consistent with Article 4.5 (commencing with Section 10181), the insurer shall notify the policyholder of this determination. This notification may be included in the notice required in subdivision (a) or (b). (2) The notification to the policyholder shall be developed by the department and shall include the following statements in 14-point type: (A) The Department of Insurance has determined that the rate for this product is unreasonable or not justified after reviewing information submitted to it by the insurer. (B) The policyholder has the option to obtain other coverage from this insurer or another insurer, or to keep this coverage. (C) Small business purchasers may want to contact Covered California at www.coveredca.com for help in understanding available options. (3) The development of the notification required under this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (4) The insurer may include in the notification to the policyholder the internet website address at which the insurer’s final justification for implementing an increase that has been determined to be unreasonable by the commissioner may be found pursuant to Section 154.230 of Title 45 of the Code of Federal Regulations. (5) The notice shall also be provided to the agent of record for the policyholder, if any, so that the agent may assist the purchaser in finding other coverage. (6) In developing the notification, the department shall take into consideration that this notice is required to be provided to a small group applicant pursuant to subdivision (g) of Section 10181.3. (Amended by Stats. 2019, Ch. 807, Sec. 14. (AB 731) Effective January 1, 2020.)
  193. 10199.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    The written notice must state the actual dollar amount and percentage of a premium rate increase, and describe plan design or benefit changes in plain English with italics/highlighting and bold reasons for the changes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.2. (a) The written notice described in subdivisions (a) and (b) of Section 10199.1 shall state in italics and in 12-point type the actual dollar amount and the specific percentage of the premium rate increase. Further, the notice shall describe in plain understandable English and highlighted in italics any changes in the plan design or change in benefits with reduction in benefits, waivers, exclusions, or conditions. (b) The written notice shall specify in a minimum of 10-point bold typeface the reason or reasons for premium rate changes, plan design, or plan benefit changes. (Amended by Stats. 2010, Ch. 661, Sec. 9. (SB 1163) Effective January 1, 2011.)
  194. 10199.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    Entities required to give the notice, and their authorized representatives or agents, are generally protected from liability and lawsuits for statements made in specified notice-related communications unless malice in fact is shown.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.3. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any entity required to provide the notice or its authorized representatives, or agents, for any statement made, unless shown to have been made with malice in fact, by any of them in (a) any written notice or in any other oral or written communication specifying the reasons for the notice, (b) any communication providing information pertaining to such notice, or (c) evidence submitted at any court proceeding or informal inquiry in which such notice is at issue. (Added by Stats. 1990, Ch. 949, Sec. 2.)
  195. 10199.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    Proof that a notice was mailed, with the reason for mailing, to the appropriate entity or individual at the last known mailing address is sufficient proof of the notice required by this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.4. Proof of mailing a notice and the reason therefor to the appropriate entity or individual at the last known mailing address shall be sufficient proof of the notice required by this chapter. (Added by Stats. 1990, Ch. 949, Sec. 2.)
  196. 10199.44.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    Insurers that issue, amend, or renew certain group disability policies must give written cancellation notice to group policyholders and require the policyholder to forward cancellation copies and proof of mailing to covered persons and the insurer.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.44. (a) On or after January 1, 1994, every insurer issuing, amending, or renewing group disability insurance which covers hospital, medical, or surgical expenses shall notify the group policyholders in writing of the cancellation of the group policy and shall include in their contract with group policyholders, regardless of the situs of that contract, a provision requiring the group policyholder to mail promptly to each person covered under the group policy a legible, true copy of any notice of cancellation of the policy which may be received from the insurer and to provide promptly to the insurer proof of that mailing and the date thereof. (b) The notice of cancellation required by subdivision (a) shall include information regarding the conversion rights of persons covered under the group policy upon termination of the group policy. This information shall be in clear and easily understandable language. (Added by Stats. 1993, Ch. 1154, Sec. 2. Effective January 1, 1994.)
  197. 10199.46.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    Nonprofit hospital service plans must give written cancellation notice to group contractholders and require contractholders to promptly mail copies to subscribers and report proof back to the plan.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.46. (a) On or after January 1, 1994, every nonprofit hospital service plan issued, amended, or renewed that covers hospital, medical, or surgical expenses on a group basis shall notify the group contractholders in writing of the cancellation of the plan contract and shall include in their contract with group contractholders a provision requiring the group contractholder to mail promptly to each subscriber a legible, true copy of any notice of cancellation of the plan contract which may be received from the plan and to provide promptly to the plan proof of that mailing and the date thereof. (b) The notice of cancellation required by subdivision (a) shall include information regarding the conversion rights of persons covered under the plan contract upon termination of the plan contract. This information shall be in clear and easily understandable language. (Added by Stats. 1993, Ch. 1154, Sec. 3. Effective January 1, 1994.)
  198. 10199.48.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    A health insurer may not change group-contract premium rates, copayments, coinsurance, or deductibles during the contract term after certain milestones, unless subdivision (b) allows it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.48. (a) No health insurer shall, with regard to a group contract, change the premium rates or applicable copayments or coinsurances or deductibles for the length of the contract, except as specified in subdivision (b), during any of the following time periods: (1) After the group policyholder or group contractholder has delivered written notice of acceptance of the contract or policy. (2) After the start of the employer’s annual open enrollment period. (3) After the receipt of payment of the premium for the first month of coverage in accordance with the contract or policy effective date. (b) Changes to the premium rates or applicable copayments or coinsurances or deductibles of a contract or policy shall, subject to the insurer meeting the requirements of this chapter, be allowed in any of the following circumstances: (1) When authorized or required in the group contract or policy. (2) When the contract or policy was agreed to under a preliminary agreement that states that it is subject to execution of a definitive agreement. (3) When the insurer and the policyholder or contractholder mutually agree in writing. (Added by Stats. 2002, Ch. 336, Sec. 5. Effective January 1, 2003.)
  199. 10199.49.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. )

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    This section limits certain health insurance policies from changing cost-sharing design during the policy year, unless state or federal law requires the change.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 2. General Provisions [10199.1 - 10199.49] ( Article 2 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.49. (a) This section shall apply to grandfathered health insurance policies and nongrandfathered health insurance policies in the individual or small group markets that are issued, amended, or renewed on or after January 1, 2017. (b) Notwithstanding paragraph (1) of subdivision (b) of Section 10199.48, a health insurance policy shall not change the cost-sharing design during the policy year, except when required by state or federal law. (c) For purposes of this section, the following definitions shall apply: (1) “Cost sharing” includes any copayment, coinsurance, deductible, or any other form of cost sharing by the insured other than the premium or share of premium. (2) “Policy year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. For nongrandfathered health insurance policies in the individual market, “policy year” means the calendar year. (3) “Cost-sharing design” means the amount or proportion of cost sharing applied to a covered benefit. (Added by Stats. 2016, Ch. 192, Sec. 2. (SB 923) Effective January 1, 2017.)
  200. 10199.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 3. Administration and Enforcement [10199.5 - 10199.9] ( Article 3 added by Stats. 1990, Ch. 949, Sec. 2. )

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    The commissioner may adopt reasonable regulations, and changes to them, when conditions warrant and when needed to administer this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1.5. Health Coverage Contract Notification [10199 - 10199.9] ( Chapter 1.5 added by Stats. 1990, Ch. 949, Sec. 2. ) ## ARTICLE 3. Administration and Enforcement [10199.5 - 10199.9] ( Article 3 added by Stats. 1990, Ch. 949, Sec. 2. ) ## 10199.5. The commissioner may, as conditions warrant, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, adopt reasonable regulations, and amendments and additions thereto, as are necessary to administer this chapter. (Added by Stats. 1990, Ch. 949, Sec. 2.)

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