Insurance Code — Part 5 | INS — United States — California law | Esheria

Insurance Code

Part 5 of 23 · provisions 801–1,000

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

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Provisions of Insurance Code

Showing 200 of 4,461

  1. 10295.12.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Insurers must make sure their agents can explain the differences between accelerated death benefits and long-term care 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.12. (a) Insurers shall ensure that agents offering, marketing, or selling accelerated death benefits on their behalf are able to describe the differences between benefits provided under an accelerated death benefit and benefits provided under long-term care insurance, as follows: (1) The difference between the benefits afforded to an insured through an accelerated death benefit and a long-term care insurance policy or rider. (2) The differences between benefit eligibility criteria. (3) Whether an elimination period applies to either an accelerated death benefit or long-term care insurance and a description of the elimination period. (4) The benefits under the accelerated death benefit or long-term care insurance if benefits are never needed. (5) The benefits under the accelerated death benefit or long-term insurance if benefits are needed. (6) Restrictions on benefit amounts. (7) Tax treatment of benefits. (8) Income and death benefit considerations. (b) Completion of California agent education or continuing education for long-term care insurance shall meet the requirements of this section. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  2. 10295.13.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    This section prohibits three insurance sales practices: misleading comparisons of policies or insurers, high-pressure marketing, and marketing that hides that it is soliciting 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.13. In addition to other unfair trade practices described in this code, the following acts and practices in the sale of insurance under this article are prohibited: (a) Twisting. 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 any insurance policy, or to take out a policy of insurance with another insurer. (b) High pressure tactics. 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. (c) Cold lead advertising. 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 solicitation of insurance and that contact will be made by an insurance agent or insurance company. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  3. 10295.14.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Accelerated death benefits must follow certain sections, and insurers offering specified life insurance products must also offer waiver-of-premium benefits or disclose premium default protection options.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.14. (a) Accelerated death benefits shall comply with the provisions in Sections 10113.71 and 10113.72. (b) Every insurer offering term life insurance with accelerated death benefits or any rider that provides for accelerated death benefits described in Section 10295 shall also offer a waiver of premium benefit for the life insurance premium and any premium charged for the accelerated death benefit as described in Section 10271.1. (c) Every insurer offering a cash value life insurance policy or rider offering accelerated death benefits described in Section 10295 shall disclose all premium default protection options in the policy and at the time of the application, including waiver of premium options available under Section 10271.1 and automatic premium loans. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  4. 10295.15.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Accelerated death benefit provisions or supplemental contracts must be renewable for the life of the underlying life insurance policy unless the policyholder or contractholder requests otherwise, if premiums are paid 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.15. (a) Except at the request of the policyholder or contractholder, all accelerated death benefit provisions or supplemental contracts shall be renewable for the life of the underlying life insurance policy, provided the premiums are timely paid. The statement shall be prominently displayed on the first page of the accelerated death benefit policy or rider. (b) If an accelerated death benefit is offered with an underlying term life insurance policy, the accelerated death benefit shall include a prominent statement on page one that the accelerated death benefit terminates with the policy. (Amended by Stats. 2014, Ch. 360, Sec. 4. (AB 2578) Effective January 1, 2015.)
  5. 10295.16.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Ending an accelerated death benefit does not affect payment of benefits for a qualifying event that happened while the benefit was in force.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.16. Termination of an accelerated death benefit shall not prejudice the payment of benefits for any qualifying event that occurred while the accelerated death benefit was in force. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  6. 10295.17.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    If an insurer does not comply with this article’s requirements, it is subject to Article 6.5.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.17. An insurer that fails to conform to the requirements provided under this article shall be subject to Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  7. 10295.18.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Accelerated death benefits cannot be used to limit or exclude coverage based on illness, treatment, medical condition, or accident, except in the circumstances listed in Section 10271(g)(1)-(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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.18. Accelerated death benefits shall not limit or exclude coverage by type of illness, treatment, medical condition, or accident, except under the circumstances described in paragraphs (1) to (4), inclusive, of subdivision (g) of Section 10271. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  8. 10295.19.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    The policyholder or certificate holder has the right to appeal a benefit-eligibility decision to 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.19. A policy, certificate, rider, or endorsement shall include a provision giving the policyholder or certificate holder the right to appeal to the insurer a decision regarding benefit eligibility. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  9. 10295.2.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Certain life insurance contracts or riders with accelerated death benefits must be submitted to the commissioner for approval, and insurers using a chronic-illness certification over 90 days must include an outside tax counsel memorandum.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.2. A life insurance contract with an accelerated death benefit or an accelerated death benefit in the form of a rider or endorsement shall be submitted for the approval of the commissioner in the same manner as required under Section 10292 and shall be submitted with the following additional information: (a) The term “accelerated death benefit” shall be included in the descriptive title of the filing. (b) A statement of the specific policy forms with which this accelerated death benefit will be offered, any underwriting restrictions involving face amount or age, and whether the accelerated death benefit is intended for use with new issues or in force business, or both. (c) An insurer that requires certification that a chronic illness is expected to last longer than 90 days shall include in its filing a legal memorandum from outside tax counsel that the certification would allow for preferable tax treatment under Section 101(g) of the Internal Revenue Code (26 U.S.C. Sec. 101(g)). (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  10. 10295.3.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    This section requires a written disclosure about accelerated death benefits to accompany filings and be given to applicants and, in some cases, delivered with the policy, certificate, or application materials.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.3. (a) A written disclosure, as set forth below, shall be included with the filing for the commissioner’s approval, and shall be given to each applicant. The same written disclosure shall be attached to the policy or certificate delivered to the insured. (b) The required written disclosure shall be in the following form: “IMPORTANT NOTICE TO APPLICANT/BUYER REGARDING ACCELERATED DEATH BENEFITS” “The benefits provided by this accelerated death benefit are not intended to provide, and will never provide, long-term care insurance, nursing home insurance, or home care insurance. If you are interested in long-term care or nursing home or home care insurance, you should consult with an insurance agent licensed to sell that insurance, inquire with the insurance company offering the accelerated death benefits, or visit the California Department of Insurance Internet Web site (www.insurance.ca.gov) section regarding long-term care insurance. If you choose to accelerate a portion of your death benefit, doing so will reduce the amount that your beneficiary will receive upon your death. Receipt of accelerated death benefits may be taxable. Prior to electing to buy the accelerated death benefit, you should seek assistance from a qualified tax adviser. Receipt of accelerated death benefits may affect eligibility for public assistance programs, such as Medi-Cal or Medicaid. Prior to electing to buy the accelerated death benefit, you should consult with the appropriate social services agency concerning how receipt of accelerated death benefits may affect that eligibility.” (c) In the case of agent-solicited life insurance, the agent shall provide the disclosure form to the applicant prior to, or concurrently with, the application. Acknowledgment of the applicant’s receipt of the disclosure shall be signed by the applicant and the writing agent. (d) In the case of a solicitation by direct response methods, the insurer shall provide the disclosure form to the applicant together with the application. The form shall include a statement that a full premium refund shall be provided to the insured if the policy is returned to the company within the free look period, pursuant to Section 10295.8. (e) In the case of group insurance policies, the disclosure form shall be delivered together with the application for the certificate, or with the certificate of coverage or any related document furnished by the insurer for the certificate holder. (Amended by Stats. 2018, Ch. 98, Sec. 7. (AB 2180) Effective January 1, 2019.)
  11. 10295.4.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    An insurer must file an actuarial memorandum with the commissioner for an accelerated death benefit, and the memorandum must include specified calculations, explanations, and a certification.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.4. An insurer shall file with the commissioner an actuarial memorandum prepared, dated, and signed by a member of the American Academy of Actuaries that includes all of the following information: (a) A description of the accelerated death benefit, including the effects of payment of the accelerated death benefit on all life insurance policy benefits and any subsequent accelerated death benefits, premium payments, cost of insurance rates, and values, including any outstanding loan, if applicable, for all types of forms with which the accelerated death benefit will be used. (b) A description of, and justification for, expense charges associated with the accelerated death benefit and the maximum expense charges. (c) A description of the interest rate or interest rate methodology used in any present value calculation or in accruing interest on the amount of the accelerated death benefit, which shall not exceed the greater of the current yield on 90-day treasury bills, or a variable rate determined in accordance with the National Association of Insurance Commissioners (NAIC) Model Policy Loan Interest Rate Bill No. 590. (d) A description of the mortality basis and methodology, including the period of time applicable to any mortality discount, used in any present value calculation of the accelerated death benefit. (e) A description of the mortality and morbidity basis and methodology used in the determination of any separate premium or costs of insurance for the accelerated death benefit. (f) The formula used to determine the accelerated death benefit, including any limitations on the amount of the benefit, and the formula used to determine the postacceleration premium for the accelerated death benefit as well as the life insurance policy. (g) A sample calculation of the accelerated death benefit. If the life insurance policy contains a loan provision, the example shall assume that there is an outstanding loan on the date of acceleration. All policy and accelerated death benefit benefits, premium payments, cost of insurance charges and values, including the outstanding loan, if applicable, immediately before and immediately after acceleration shall be shown in the example. (h) If an accelerated death benefit will be paid in installments, the actuarial memorandum shall explain the basis used in the calculation of the minimum periodic payment for the payment period and a sample calculation of a minimum periodic payment, and the basis used, and a sample calculation of the lump sum payable if the insured dies before all periodic payments for the payment period are made. (i) (1) For any accelerated death benefit subject to this article, a certification that the value and premium of the accelerated death benefit is 10 percent or less of the total value of the benefits over the life of the policy. These values shall be measured as of the date of issue. (2) The certification shall be in the following form: “I,____________________of ___________________________ am a Member in good standing of the American Academy of Actuaries and am qualified to provide this Certification with respect to the accelerated death benefit described in the Actuarial Memorandum to which this Certification is attached. I certify that: (1) The value of the benefits provided, on an aggregated basis, in respect of the filed accelerated death benefit, determined according to the formula below applied over a range of underwriting classes and plans at which the benefit is being made available, is not in any case greater than 10%. (NSP2 – NSP1) / NSP1 Where: (a) NSP1 and NSP2 are determined using an effective annual interest rate of 6%. (b) NSP1 is the net single premium for the base policy benefits assuming there is no accelerated death benefit. (c) NSP2 is the net single premium for the base policy benefits assuming that the full death benefit is paid at time of death or the occurrence of the non-death accelerated death benefit trigger. (2) In developing the assumptions, other than the interest assumption, used in calculating NSP1 and NSP2, I have complied with all applicable laws, regulations, and Actuarial Standards of Practice (ASOPs). The assumptions used represent anticipated experience factors, as defined in actuarial literature and by generally accepted actuarial practice. (3) The assumptions, other than the interest assumption, used in calculating NSP1 and NSP2 will be reviewed at least annually by the Company to ensure that the value of the accelerated death benefit provided, as defined in (1) above, continues to be incidental. If, after such review and while this accelerated death benefit is being actively issued, the value of the benefits provided by this benefit are no longer incidental based on then current anticipated experience factors, the Company will discontinue offering the accelerated death benefit which is no longer incidental. (4) If a separate premium or cost of insurance (COI) charge is being charged for the accelerated death benefit provided, the ratio of the present value of the accelerated death benefit premiums or COI charges over the life of the policy to the present value of the policy premiums or COI charges exclusive of any riders, does not exceed 10%. The present values in this item (4) are determined using an effective annual interest rate of 6%.” (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  12. 10295.5.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    Accelerated death benefit applications must use simple health questions, and insurers get a limited rescission/denial rule if underwriting was not completed 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.5. (a) Applications, if any, or forms supporting an application, if any, for accelerated death benefits shall contain clear, unambiguous, short, and simple questions designed to ascertain the health condition of the applicant. Each health-related question shall contain only one health status inquiry and shall require only a “yes” or “no” answer, except that the application may include a request for the name of any prescribed medication and the name of the prescribing physician. If the application requests the name of any prescribed medication or the prescribing physician, then any mistake or omission shall not be used as a basis for the denial of a claim or the rescission of the accelerated death benefit or life insurance policy or certificate. (b) The following warning shall be printed conspicuously and in close conjunction with the applicant’s signature block: “Caution: If your answers on this application are misstated or untrue, the insurer may have the right to deny benefits or rescind your accelerated death benefit coverage.” (c) If an insurer does not complete medical underwriting for the accelerated death benefit separate from underwriting for the life insurance policy and resolve all reasonable questions arising from information submitted on or with an application before issuing the accelerated death benefit, then the insurer may only rescind the accelerated death benefit or life insurance policy or certificate or deny an otherwise valid claim upon clear and convincing evidence of fraud or material misrepresentation of the risk by the applicant. The evidence shall do all of the following: (1) Pertain to the condition for which benefits are sought. (2) Involve a chronic condition or involve dates of treatment before the date of application. (3) Be material to the acceptance for coverage. (d) An accelerated death benefit may not be field issued. (e) The contestability period for a life insurance policy or certificate that contains an accelerated death benefit shall comply with paragraph (3) of subdivision (c) of Section 10271. (f) A copy of the completed application shall be delivered to the insured at the time of delivery of the life insurance policy or certificate that contains an accelerated death benefit. (Amended by Stats. 2018, Ch. 98, Sec. 8. (AB 2180) Effective January 1, 2019.)
  13. 10295.6.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    This section requires insurers to give disclosures and reports about accelerated death benefits, limits added conditions, and bars unfair discrimination.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.6. (a) When a policyholder or certificate holder requests an acceleration of death benefits, the insurer shall send a statement to the policyholder or certificate holder and irrevocable beneficiary showing any effect that the payment of the accelerated death benefit would have on the policy’s cash value, accumulation account, death benefit, premium, policy loans, and policy liens. The statement shall disclose that receipt of accelerated death benefit payments may adversely affect the recipient’s eligibility for Medicaid or other government benefits or entitlements. In addition, receipt of an accelerated death benefit payment may be taxable and assistance should be sought from a personal tax adviser. When a previous disclosure statement becomes invalid as a result of an acceleration of the death benefit, the insurer shall send a revised disclosure statement to the policyholder or certificate holder and irrevocable beneficiary. (b) The accelerated death benefit shall be effective not more than 30 days following the effective date of the policy provision, rider, endorsement, or certificate. (c) If the insurer charges a separate premium for the accelerated death benefit, then the insurer may also offer a waiver of premium benefit as defined in subdivision (a) of Section 10271.1. At the time the waiver of the accelerated death benefit premium benefit is claimed, the insurer shall explain any continuing premium requirement to keep the underlying policy in force. (d) An insurer shall not unfairly discriminate among insureds with different qualifying events covered under the policy or among insureds with similar qualifying events covered under the policy. An insurer shall not apply further conditions on the payment of the accelerated death benefits other than those conditions specified in the accelerated death benefit. (e) No later than one month after payment of an accelerated death benefit, the insurer shall provide the policyholder or certificate holder with a report of any accelerated death benefits paid out during the prior month, an explanation of any changes to the policy or certificate, death benefits, and cash values on account of the benefits being paid out, and the amount of the remaining benefits that can be accelerated at the end of the prior month. The insurer may use a calendar month or policy or certificate month. (f) The conversion benefit available to group certificate holders on termination of employment pursuant to paragraph (2) of subdivision (a) of Section 10209 shall include a benefit comparable to the accelerated death benefit. This requirement may be satisfied by an individual policy or certificate. This requirement, subject to the approval of the commissioner, may be satisfied by arrangement with another insurer to provide the required coverage. (g) When payment of an accelerated death benefit results in a pro rata reduction in cash value, the payment may be applied toward repaying a portion of the loan equal to a pro rata portion of any outstanding policy loans if disclosure of the effect of acceleration upon any remaining death benefit, cash value or accumulation account, policy loan, and premium payments, including a statement of the possibility of termination of any remaining death benefit, is provided to the policyholder or certificate holder. The policyholder or certificate holder shall provide written consent authorizing any other arrangement for the repayment of outstanding policy loans. (Amended by Stats. 2018, Ch. 98, Sec. 9. (AB 2180) Effective January 1, 2019.)
  14. 10295.7.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    The insurer may charge for accelerated death benefits and may pay the face amount in present value, but the calculations and related interest rates must follow sound actuarial principles and disclosure rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.7. (a) The insurer may require a premium charge or cost of insurance charge for the accelerated death benefit. This charge shall be based on sound actuarial principles. In the case of group insurance, the additional cost may also be reflected in the experience rating. (b) (1) The insurer may pay a present value of the face amount. The calculation shall be based on any applicable actuarial discount appropriate to the policy design. The interest rate or interest rate methodology used in the calculation shall be based on sound actuarial principles and disclosed in the contract or actuarial memorandum required in Section 10295.4. The maximum interest rate used shall be no greater than the greater of one of the following: (A) The current yield on 90-day treasury bills. (B) The current maximum statutory adjustable policy loan interest rate. (2) The interest rate accrued on the portion of the lien that is equal in amount to the cash value of the life insurance policy at the time of the supplemental benefit acceleration shall be not more than the policy loan interest rate stated in the contract. (c) (1) Except as provided in paragraph (2), when an accelerated death benefit is payable, there shall not be more than a pro rata reduction in the cash value based on the percentage of death benefits accelerated to produce the accelerated death benefit payment. (2) Alternatively, the payment of accelerated death benefits, any administrative expense charges, any future premiums, and any accrued interest can be considered a lien against the death benefit of the life insurance policy and access to the cash value of the life insurance policy may be restricted to any excess of the cash value over the sum of any other outstanding loans and the lien. Future access to additional policy loans may also be limited to any excess of the cash value over the sum of the lien and any other outstanding policy loans. (d) When payment of an accelerated death benefit results in a pro rata reduction in the cash value of the life insurance policy, the payment shall not be applied toward repaying an amount greater than a pro rata portion of any outstanding policy loans. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  15. 10295.8.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    An applicant may return an accelerated death benefit policy or certificate within 30 days of delivery and get a refund if not satisfied.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.8. (a) An applicant for an accelerated death benefit shall have the right to return the accelerated death benefit policy or certificate by first-class United States mail within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. If the accelerated death benefit is purchased as an endorsement or rider at the same time as the base life insurance policy, then the endorsement or rider may be returned within 30 days. The underlying life insurance policy shall be otherwise subject to this code. (b) The return of a life insurance policy or certificate that contains an accelerated death benefit, or the return of an accelerated death benefit rider or endorsement, shall void the life insurance policy, certificate, rider, or endorsement from the beginning, and the parties shall be in the same position as if no policy, certificate, rider, or endorsement had been issued. All premiums paid and any policy fee paid for the accelerated death benefit shall be fully refunded directly to the applicant by the insurer within 30 days after the policy, rider, endorsement, or certificate is returned. (c) Policies, certificates, riders, or endorsements to which this section applies shall have a notice prominently printed, or attached thereto, stating in substance the conditions described in subdivisions (a) and (b). (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  16. 10295.9.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. )

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    This section requires replacement notices and limits unnecessary replacement of long-term care 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2.1. Accelerated Death Benefits [10295 - 10295.19] ( Article 2.1 added by Stats. 2013, Ch. 345, Sec. 7. ) ## 10295.9. (a) Application forms for accelerated death benefits shall include a question designed to elicit information as to whether the accelerated death benefit is intended to replace any long-term care insurance presently in force. A supplementary application or other form to be signed by the applicant containing that question may be used. (b) (1) An insurer, broker, agent, or other person shall not cause a policyholder to replace a long-term care insurance policy unnecessarily. This section shall not be construed to allow an insurer, broker, agent, or other person to cause a policyholder to replace a long-term care insurance policy or life insurance policy subject to this section that will result in a decrease in benefits and an increase in premium. (2) It shall be presumed that any third or greater policy sold to a policyholder in any 12-month period is unnecessary within the meaning of this section. This section shall not apply to those instances in which a policy is replaced solely for the purpose of consolidating policies with a single insurer. (c) Upon determining that a sale will involve a replacement of a life insurance policy subject to this section or replacement of a long-term care insurance policy, an insurer or its agent shall furnish the applicant, prior to issuance or delivery of a policy, certificate, rider, or endorsement, a notice regarding replacement of life insurance that includes an accelerated death benefit, or long-term care insurance coverage with a life insurance policy or certificate that contains an accelerated death benefit. One copy of this notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the following form: “NOTICE TO APPLICANT REGARDING REPLACEMENT OF LONG-TERM CARE INSURANCE OR LIFE INSURANCE INCLUDING ACCELERATED DEATH BENEFITS According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing life insurance or long-term care insurance and replace it with a life insurance policy with an accelerated death benefit to be issued by (company name) Insurance Company. Your new accelerated death benefit coverage provides 30 days within which you may decide, without cost, whether you desire to keep the coverage. Please note that your underlying life insurance policy may only provide for a 10-day period during which you may decide, without cost, whether you will keep the coverage. For your own information and protection, you should be aware of, and seriously consider, certain factors that may affect the insurance protection available to you under the new coverage. This accelerated death benefit is NOT Nursing Home, Home Care, or Long-Term Care Insurance, and it is not intended or designed to eliminate your need for that coverage. There are no restrictions or limitations on the use of the accelerated death benefit proceeds. If you want long-term care insurance, you should consult with an insurance agent licensed to sell that insurance, inquire with the insurance company offering the accelerated death benefits, or visit the California Department of Insurance Internet Web site (www.insurance.ca.gov) that provides information regarding long-term care insurance. If you want to replace existing coverage with life insurance that includes an accelerated death benefit, you should note the following: (1) Receipt of accelerated death benefits may be taxable. Prior to electing to buy the accelerated death benefit, policyholders or certificate holders should seek assistance from a qualified tax adviser. (2) Receipt of accelerated death benefits may affect eligibility for public assistance programs, such as Medi-Cal or Medicaid. Prior to electing to buy the accelerated death benefit, the applicant/buyer should consult with the appropriate social services agency concerning how receipt of accelerated death benefits may affect that eligibility. You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present coverage. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage. If, after due consideration, you still wish to terminate your present coverage and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your coverage had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all the information has been properly recorded. The above “Notice to Applicant” was delivered to me on: (Date) (Applicant’s Signature)” (d) The replacement notice shall include the following statement except when the replacement coverage is group insurance: “COMPARISON TO YOUR CURRENT COVERAGE: I have reviewed your current coverage. To the best of my knowledge, the replacement of insurance involved in this transaction materially improves your position for the following reasons: ____ Additional or different benefits (please specify) ______. ____ No change in benefits, but lower premiums. ____ Fewer benefits and lower premiums. ____ Other (please specify) ______. (Signature of Agent and Name of Insurer) (Signature of Applicant) (Date) (e) In recommending the purchase or replacement of any policy or certificate issued under this section, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement. (f) The replacing policy or certificate shall not contain a provision establishing a new waiting period in the event existing coverage is converted to, or replaced by, a new or other form within the same insurer, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder. (Added by Stats. 2013, Ch. 345, Sec. 7. (SB 281) Effective January 1, 2014.)
  17. 103.

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

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    This section defines marine insurance as coverage for loss of or damage to specified property and related risks connected with navigation, transit, transportation, and certain marine-related liabilities.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 103. Marine insurance includes insurance against any and all kinds of loss of or damage to: (a) Vessels, craft, aircraft, cars, automobiles and vehicles of every kind (excluding aircraft and automobiles operating under their own power or while in storage not incidental to transportation), as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property, and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same, or during any delays, storage, transshipment, or reshipment incident thereto including marine builder’s risks, and all personal property floater risks. (b) Person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance including liability for loss of or damage arising out of or in connection with the construction, repair, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds); but except as herein specified, shall not mean insurances against loss by reason of bodily injury to the person. Inland marine insurance shall be deemed to include hull insurance on water pleasure craft not used for commercial purposes of a size and type to be determined by the commissioner. (c) Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise. (Amended by Stats. 1971, Ch. 946.)
  18. 1030.

    ## 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 security value credited on a claim must be set by an appraiser chosen by the liquidator and approved by the court, and the claimant must choose whether to accept the security or release it to the liquidator.

    ## 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. ) ## 1030. The value of the security to be credited upon such claim shall be determined by an appraiser appointed by the liquidator and approved by the court. Such claimant shall elect to accept the security or to release it to the liquidator. (Amended by Stats. 1935, Ch. 291.)
  19. 1030.5.

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

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    The liquidator may require certain assignees to assign small unsatisfied debts and hand over related documents before payment of the final liquidation dividend.

    ## 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. ) ## 1030.5. (a) The liquidator may require, as a condition of payment of the final liquidation dividend to a lender, or his assignee, who has filed a claim for an unearned premium as an assignee of the insured for valuable consideration, that such assignee of the insured shall assign to the liquidator all his right, title, and interest in any unsatisfied debt of the insured to such assignee, pertaining to policies of the insolvent insurer, remaining unpaid after crediting the final liquidation dividend, if the amount of such unsatisfied debt is less than one hundred dollars and one cent ($100.01). The liquidator may also require, as condition precedent, the delivery to him of all the documents giving rise to such debt. The liquidator, in his sole discretion, may determine whether or not it will be feasible to attempt to collect any such assigned debt. If he determines not to pursue collection of any such debt, he shall file a declaration to that effect with the liquidation court and be relieved of any further responsibility in respect to such debt. (b) As used in this section, “insured” means a natural person who purchased insurance from the insolvent insurer for personal, family, or household purposes. (Added by Stats. 1970, Ch. 1205.)
  20. 1030.6.

    ## 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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    In proceedings under this article, an agent is not liable to the liquidator or conservator for uncollected unearned premiums or uncollected unearned commissions arising from an insurer’s insolvency.

    ## 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. ) ## 1030.6. In any proceeding under this article, no agent shall be liable to the liquidator or conservator for unearned premiums uncollected by the agent, or unearned commissions uncollected by the agent, arising from an insolvency of an insurer. (Added by Stats. 1989, Ch. 672, Sec. 1.)
  21. 1031.

    ## 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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    In a liquidation, mutual debts or credits are generally set off, and only the balance is allowed or paid, subject to stated exceptions.

    ## 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. ) ## 1031. Mutual debts or mutual credits, whether arising out of one or more contracts between the person in liquidation under Section 1016 and any other person, shall be set off and the balance only shall be allowed or paid, except with respect to any of the following obligations as described in subdivisions (a) to (d), inclusive: (a) The obligation of the person in liquidation to such other person does not entitle such other person claiming such set-off to share as a claimant in the assets of the person in liquidation. (b) The obligation of the person in liquidation to the other person was purchased by, or transferred to, the other person. (c) The obligation of the other person to the person in liquidation is to pay an assessment levied against the other person or to pay a balance upon a subscription for shares of the capital stock of the person in liquidation. (d) The obligations between the other person and the person in liquidation arise from business where either the person in liquidation or the other person has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations. Notwithstanding the foregoing, a set-off of amounts due on obligations arising from those contracts shall be allowed if the balance arises from contracts that were entered into, renewed, or extended with the express written approval of the commissioner. (Amended by Stats. 1995, Ch. 580, Sec. 4. Effective January 1, 1996.)
  22. 1032.

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

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    If the commissioner rejects a claim, the commissioner must mail written notice to the claimant. The claimant may then ask the court for an order to show cause within 30 days after the notice is mailed.

    ## 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. ) ## 1032. When a claim is rejected by the commissioner, written notice of rejection shall be given by mail, addressed to the claimant at the address set forth in his claim. Within thirty days after the mailing of the notice the claimant may apply to the court in which the liquidation proceeding is pending for an order to show cause why the claim should not be allowed. (Amended by Stats. 1935, Ch. 291.)
  23. 10320.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    Accident and sickness insurance policies delivered for delivery in this state must meet several form and content 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10320. No policy of accident and sickness insurance shall be delivered or issued for delivery to any person in this state unless all of the following apply: (a) The entire money and other considerations therefor are expressed therein. (b) The time at which the insurance takes effect and terminates is expressed therein. (c) It purports to insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of the head of a family who shall be deemed the policyholder, any two or more eligible members of that family, including spouse, dependent children, or any children under a specified age which shall not exceed 19 years of age and any other person dependent upon the policyholder. (d) The style, arrangement and over-all appearance of the policy give no undue prominence to any portion of the text, and unless every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than 10-point with a lower case unspaced alphabet length not less than 120-point (the “text” shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions). (e) The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in Article 4a or 5a of this chapter, are printed, at the insurer’s option, either included with the benefit provision to which they apply, or under an appropriate caption such as “Exceptions,” or “Exceptions and Reductions”; provided, that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies. (f) Each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof. (g) It contains no provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the commissioner. (h) If the policy contains amendment, change, limitation, alteration, or restriction of the printed text by endorsement, or by any means other than rider upon a separate piece of paper made a part of such policy. (i) If any portion of such policy purports to reduce benefits by reason of age of the insured and such reduction, in accordance with the age of the insured as stated in his or her application, would be effective on the issue date of the policy. (Amended by Stats. 2016, Ch. 50, Sec. 59. (SB 1005) Effective January 1, 2017.)
  24. 10321.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    After a disability policy is issued, it cannot be changed except by a rider on a separate piece of paper.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10321. After issuance a disability policy shall not be amended, changed, limited, altered, or restricted by any means other than rider upon a separate piece of paper. (Added by Stats. 1951, Ch. 570.)
  25. 10322.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    For certain disability policies issued by a California-domiciled insurer for delivery to another state, the commissioner may require the policy to meet specified 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10322. If any disability policy is issued by an insurer domiciled in this State for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of such other state shall have advised the commissioner that any such policy is not subject to approval or disapproval by such official, the commissioner may by ruling require that such policy meet the standards set forth in Section 10320 and in Articles 4a and 5a of this chapter. (Added by Stats. 1951, Ch. 570.)
  26. 10323.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    An insurer may omit or change certain policy provisions when they do not fit the policy coverage, but only with the commissioner’s approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10323. If any provision set forth in Article 4a or 5a of this chapter is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy the insurer, with the approval of the commissioner, shall omit from such policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy. (Added by Stats. 1951, Ch. 570.)
  27. 10324.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    An insurer must print certain disability-policy provisions in the order stated, unless it chooses to place a related provision elsewhere in the policy and the result is still clear and not misleading.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10324. The provisions which are the subject of Article 4a or 5a of this chapter or any corresponding provisions which are used in lieu thereof in accordance with such articles, shall be printed in the consecutive order of the provisions in such articles or, at the option of the insurer, any such provision may appear as a unit in any part of the policy, with other provisions with which it may be logically related, providing the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued. (Added by Stats. 1951, Ch. 570.)
  28. 10325.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    A person other than the insured, if they have a proper insurable interest, may apply for and own a policy covering the insured, and may be entitled to the policy’s indemnities, benefits, and 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10325. The word “insured,” as used in this chapter, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits and rights provided therein. (Added by Stats. 1951, Ch. 570.)
  29. 10326.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    A foreign or alien insurer may include additional provisions in a disability policy delivered in this state if the provisions are not less favorable to the insured or beneficiary and are allowed by the insurer’s home-state law.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10326. Any disability policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this State, may contain any provision which is not less favorable to the insured or the beneficiary than the provisions of this chapter and which is prescribed or required by the law of the state under which the insurer is organized. (Added by Stats. 1951, Ch. 570.)
  30. 10326.5.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    A disability policy issued by a domestic insurer may include terms allowed or required by the laws of another state or country when the policy is delivered there.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10326.5. Any disability policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of such other state or country. (Added by Stats. 1951, Ch. 570.)
  31. 10327.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    The commissioner may make reasonable rules and regulations for filing or submitting policies under 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10327. The commissioner may make such reasonable rules and regulations concerning the procedure for the filing or submission of policies subject to this chapter as are necessary, proper or advisable to its administration. This provision shall not abridge any other authority granted the commissioner by law. (Added by Stats. 1951, Ch. 570.)
  32. 10328.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. )

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    A policy provision not covered by Article 4a or 5a cannot make the policy less favorable to the insured or beneficiary than the provisions covered by those articles.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Policy Form Generally—Uniform Provisions [10320 - 10328] ( Heading of Article 3 renumbered from Article 3a by Stats. 1980, Ch. 676, Sec. 192. ) ## 10328. No policy provision which is not subject to Article 4a or 5a of this chapter shall make a policy or any portion thereof less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to such articles. (Added by Stats. 1951, Ch. 570.)
  33. 1033.

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

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    This section sets the order in which claims are paid in an insurance insolvency proceeding and limits when lower-priority claims can be paid.

    ## 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. ) ## 1033. (a) Claims allowed in a proceeding under this article shall be given preference in the following order: (1) Expense of administration. (2) All claims of the California Insurance Guarantee Association or the California Life and Health Insurance Guarantee Association, and associations or entities performing a similar function in other states, together with claims for refund of unearned premiums and all claims under insurance and annuity policies or contracts, including funding agreements, of an insolvent insurer that are not covered claims. The following claims are excluded from this priority: (A) Any obligations of the insolvent insurer arising out of any reinsurance contracts, as well as obligations incurred after the expiration date of the policy or after the insurance policy has been replaced by the insured or canceled at the insured’s request, or after the policy has been canceled by the California Insurance Guarantee Association, the California Life and Health Insurance Guarantee Association, or another association or entity performing a similar function in another state. (B) Any obligations to insurers, insurance pools, or underwriting associations, and their claims for contribution, indemnity, or subrogation, equitable or otherwise, except as otherwise provided in this chapter. (C) Any amount awarded as punitive or exemplary damages, and any damages in excess of the liability limits of the policies or contracts that represent damages for contractual bad faith. (D) Any amount that is a surplus deposit of a subscriber as defined in Section 1374.1. (E) Any judgments against or obligations or liabilities of the insolvent insurer otherwise arising from alleged or proven torts, and any default, collusive, or stipulated judgment against either the insured or the person subject to proceedings under this article, as well as any judgment taken in violation of Section 1020. Nothing in this subparagraph shall prohibit the commissioner from considering the underlying claims as a claim entitled to priority under this section, provided that the claimant shall provide to the commissioner a written election that the judgment shall in all things be disregarded in determining the liability for and valuation of the underlying claim. (F) Any loss adjustment expenses, including adjustment fees and expenses, attorneys’ fees and expenses, court costs, interest, bond premiums, expert witness fees, and other claims of a similar nature incurred prior to the appointment of a liquidator. (G) Claims arising from any self-insured program of the insurer, including employee life, health and annuity plans, and self-funded employee benefit plans, however denominated, as well as claims arising from a multiple employer welfare arrangement as defined in Section 514 of the federal Employee Retirement Income Security Act of 1974, as amended, a minimum premium group insurance plan, a stop-loss group insurance plan, or an administrative services-only plan. (H) Any portion of a policy or contract to the extent that it provides experience rating credits or refunds, dividends, or for the payment of fees or allowances to any person, including the policyholder or contractholder, in connection with the service to or administration of the policy or contract. (I) Any annuity issued by a charitable organization for which the person subject to these proceedings did not have or utilize a certificate of authority to issue the policy or contract. (3) Claims having preference by the laws of the United States. (4) Unpaid charges due under the provisions of Section 736. (5) Taxes due to the State of California. (6) Claims having preference by the laws of this state. (7) Claims of creditors not included in paragraphs (1) to (6), inclusive. (8) Certificates of contribution, surplus notes, or similar obligations, and premium refunds on assessable policies. (9) The interests of shareholders or other owners in any residual value in the estate. (b) (1) Every claim allowed under a separate account policy, contract, or agreement providing, in effect, that the assets allocated to the separate account are not chargeable with liabilities arising out of any other business of the insurer, shall be satisfied out of the assets properly allocated to and maintained in the separate account, excluding amounts allocated or transferred to the separate account by the insurer pursuant to subdivision (b) of Section 10506, equal to the reserves maintained in the separate account for the policies, contracts, or agreements. No liabilities of the insurer arising out of any other business of the insurer shall be satisfied from assets properly allocated to and maintained in a separate account except (A) from amounts allocated or transferred to the separate account pursuant to subdivision (b) of Section 10506 and (B) from any assets allocated to the separate account that exceed the reserves under the separate account policies, contracts, or agreements. For the purposes of this subdivision, “separate account policies, contracts, or agreements” means any policies, contracts, or agreements that provide for separate accounts as contemplated by Section 10506, 10506.3, 10506.4, or 10541. Any valid and allowed claim for contractual benefits that cannot be satisfied out of the assets properly allocated to and maintained in a separate account for obligations authorized by subdivision (a) of Section 10506.3 shall be included as a claim against the general account within paragraph (2) of subdivision (a). Any valid and allowed claim against the general account for contractual benefits under an obligation authorized by Section 10506.4 shall be included as a claim within paragraph (2) of subdivision (a). (2) Notwithstanding any other provision of law, to the extent that any assets of a life insurer, other than those assets properly allocated to, and maintained in, a separate account, have been used to fund or pay any expenses, taxes, or policyholder benefits that are attributable to a separate account policy, contract, or agreement that should have been paid by a separate account prior to the commencement of delinquency proceedings, then upon the commencement of delinquency proceedings, the separate accounts that benefited from this payment or funding shall first be used to repay or reimburse the company’s general assets or account for any unreimbursed net sums due at the commencement of delinquency proceedings prior to the application of the separate account assets to the satisfaction of liabilities of the corresponding separate account policies, contracts, and agreements. (c) Upon the issuance of an order appointing a conservator or liquidator for any person under either Section 1011 or 1016 or both these sections, the lien of taxes due to the State of California imposed by Article 4 (commencing with Section 12491) of Chapter 4 of Part 7 of Division 2 of the Revenue and Taxation Code shall become subordinate to the reasonable administrative expenses of the proceeding under the order. (d) The following definitions are for purposes of this section only and shall not be used to determine coverage under the California Life and Health Insurance Guarantee Association Act (Article 14.7 (commencing with Section 1067)): (1) “Funding agreements” means those agreements authorized to be delivered or issued pursuant to Section 10541. (2) “Annuity” means only those annuity contracts, including period-certain annuities issued by a life insurer, that require for their lawful issuance a certificate of authority from the commissioner, and excludes without limitation all instruments for which the commissioner’s certificate of authority is not required, such as promissory notes, installment loans, negotiable instruments, mortgages, and debentures. (3) Reinsurance contracts shall not be included as insurance or annuity policies or contracts, or funding agreements. However, any insurance or annuity policy or contract, including any funding agreement, that is assumed by an insurer under an assumption reinsurance agreement pursuant to a plan of liquidation, rehabilitation, or reorganization shall, unless the plan provided otherwise, be deemed to retain the issue date of the original insurance or annuity policy or contract, or funding agreement that is assumed. (e) The provisions of this section are severable. If any portion of this section is held invalid or is preempted by federal law, the remainder of the section and its application shall not be affected. Specifically, should any of paragraphs (1) to (6), inclusive, of subdivision (a) be held to be invalid or preempted by federal law, the claims included within the invalid paragraph shall be included within paragraph (7) of subdivision (a), and the remaining paragraphs shall not be affected thereby. (f) No payment shall be made to any creditor in paragraphs (8) or (9) of subdivision (a), unless all claims in paragraphs (3) to (7), inclusive, of subdivision (a) have been paid in full, together with interest at the legal rate of the date of the order commencing the proceeding or the date on which the claim became liquidated, whichever date is later. In proceedings involving life insurance companies, no payment shall be made for any claim in paragraph (7), (8), or (9) of subdivision (a) unless and until all claims in paragraph (1) of subdivision (a) have been paid in full, together with interest at the legal rate, all claims in paragraph (2) of subdivision (a) have been paid the full value of the policy or contract upon which the claim is based, as of the time of distribution to claimants, and all claims in paragraphs (3) to (6), inclusive, of subdivision (a) have been paid in full, together with interest at the legal rate from the date of the order commencing the proceeding. Notwithstanding the provisions of this subdivision, no payment of interest shall be made to any insurance guaranty association that receives early access disbursements from the estate pursuant to Section 1035.5. (Amended by Stats. 1999, Ch. 868, Sec. 1. Effective January 1, 2000.)
  34. 1033.5.

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

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    This section sets rules for handling deductible-agreement collateral and reimbursements in insurer liquidations.

    ## 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. ) ## 1033.5. (a) The purpose of this section is to clarify the rights and obligations of policyholders, claimants, guaranty funds, including the California Insurance Guarantee Association, and the liquidator with respect to a deductible agreement entered into between a policyholder and an insurer subject to liquidation proceedings under this article. These arrangements are commonly referred to as “large deductible” policies or programs, even though the actual amount of the deductible can vary significantly and may not be in fact large in amount. Deductible amounts under these arrangements may vary from as little as five thousand dollars ($5,000) to as much as $1,000,000 or more. This section shall be construed such that the claim payment obligations of the guaranty associations, including the California Insurance Guarantee Association, in total arising from deductible agreements will be substantially equivalent to those of the insurer, except as provided otherwise in each guaranty association’s enabling statute, including that of the California Insurance Guarantee Association, had the insurer continued in business and not become subject to a liquidation proceeding. (b) Notwithstanding any other provision of law or contract to the contrary, any collateral held by or for the benefit of, or assigned to, the insurer or the liquidator to secure the obligations of a policyholder under a deductible agreement and any reimbursement payments to the liquidator under a deductible agreement shall be considered property of the liquidated company, but shall not be general assets of the liquidated company. The liquidator shall maintain, administer, and distribute all such collateral and deductible reimbursement payments only as provided in this section. (c) If a claim that is subject to a deductible agreement and secured by collateral is not covered by a guaranty association or the California Insurance Guarantee Association and the policyholder is unwilling or unable to take over the handling and payment of the noncovered claims, the liquidator shall adjust and pay the noncovered claims utilizing the collateral, but only to the extent the available collateral, after allocation under subdivision (d), is sufficient to pay all outstanding and anticipated claims. If the collateral is exhausted and the policyholder is not able to provide funds to pay the remaining claims within the deductible after all reasonable means of collection against the policyholder have been exhausted, the remaining claims shall be claims against the insurer’s estate, subject to the other provisions of this article regarding the filing and allowance of claims. When the liquidator determines that the collateral is insufficient to pay all additional and anticipated claims, the liquidator may file a plan for equitably allocating the collateral among claimants, subject to court approval. (d) (1) To the extent that the liquidator holds collateral provided by a policyholder that was obtained to secure a deductible agreement and to secure other obligations of the policyholder to pay the insurer, directly or indirectly, amounts that become assets of the estate, such as reinsurance obligations under a captive reinsurance program or adjustable premium obligations under a retrospectively rated insurance policy or where the premium due is subject to adjustment based upon actual loss experience, the liquidator shall equitably allocate the collateral among those obligations and administer the collateral allocated to the deductible agreement pursuant to this section. (2) With respect to the collateral allocated to obligations under the deductible agreement, if the collateral secured reimbursement obligations under more than one line of insurance, then the collateral shall be equitably allocated among the various lines based upon the estimated ultimate exposure within the deductible amount for each line. (3) The liquidator shall inform the guaranty associations or the California Insurance Guarantee Association that is or may be obligated for claims against the insurer of the method and details of each allocation made pursuant to this subdivision. (4) The liquidator shall be entitled to deduct from the collateral or from the deductible reimbursements reasonable and actual expenses incurred in connection with the collection of the collateral and deductible reimbursements under this section. (e) (1) Regardless of whether there is collateral, if the insolvent insurer has contractually agreed to allow the policyholder to fund its own claims within the deductible amount pursuant to a deductible agreement, either through the policyholder’s own administration of its claims or through its provision of funds directly to a third-party administrator who administers the claims, the liquidator shall allow the funding arrangement to continue and, where applicable, shall enforce the arrangement to the fullest extent possible. The funding of any of these claims by the policyholder within the deductible amount, including, but not limited to, any of these claims by the policyholder or the third-party claimant, shall bar a claim for that amount in the liquidation proceeding. (2) The funding of claims pursuant to paragraph (1) shall extinguish the obligation, if any, of a guaranty association or the California Insurance Guarantee Association to pay the claims within the deductible amount, as well as the obligation, if any, of the policyholder or third-party administrator to reimburse the guaranty association or the California Insurance Guarantee Association. No charge of any kind shall be made by the liquidator against any guaranty association or the California Insurance Guarantee Association on the basis of the policyholder funding of claims payment made pursuant to the mechanism set forth in this subdivision. The funding of these claims by the policyholders shall not limit or prejudice any right the guaranty association or the California Insurance Guarantee Association may have with respect to these claims under state law. Any policyholder that funds its own claims under the provisions of this subdivision shall provide to the guaranty association or to the California Insurance Guarantee Association all relevant information concerning the claim whenever the policyholder’s reserved liability for the claim equals or exceeds 50 percent of the deductible amount on the claim. (f) (1) If the insurer has not contractually agreed to allow the policyholder to fund its own claims within the deductible amount, to the extent a guaranty association or the California Insurance Guarantee Association is required by applicable state law to pay any claims for which the insurer would be or would have been entitled to reimbursement from the policyholder under the terms of the deductible agreement, and to the extent the claims have not been paid by a policyholder or third party, the liquidator shall promptly bill the policyholder for the reimbursement. The policyholder shall pay that amount to the liquidator for the benefit of the California Insurance Guarantee Association or the guaranty association that paid the claims. Neither the insolvency of the insurer, nor its inability to perform any of its obligations under the deductible agreement, shall be a defense to the policyholder’s reimbursement obligation under the deductible agreement. (2) When the policyholder reimbursements pursuant to paragraph (1) are collected, the liquidator shall promptly reimburse the guaranty association or the California Insurance Guarantee Association for claims paid that were subject to the deductible. If the policyholder fails to pay the amounts due within 60 days after the bill for the reimbursements is due, the liquidator shall use the collateral to the extent necessary to reimburse the guaranty association or the California Insurance Guarantee Association, and, at the same time, may pursue other collections efforts against the policyholder. If more than one guaranty association or the California Insurance Guarantee Association has a claim against the same collateral, and the available collateral, after allocation under subdivision (d), along with billing and collection efforts, are together insufficient to pay each guaranty association or the California Insurance Guarantee Association in full, then the liquidator shall prorate payments to each guaranty association or the California Insurance Guarantee Association based upon the relationship the amount of claims each guaranty association or the California Insurance Guarantee Association has paid bears to the total of all claims paid by the guaranty association or the California Insurance Guarantee Association. (g) (1) With respect to claim payments made by any guaranty association or the California Insurance Guarantee Association, the liquidator shall promptly provide the court, with a copy to the guaranty association or the California Insurance Guarantee Association, with a complete report of the liquidator’s deductible billing and collection activities, including copies of the policyholder billings when rendered, the reimbursements collected, the available amounts and use of collateral for each policyholder, and any proration of payments when it occurs. If the liquidator fails to make a good faith effort, within 120 days of receiving a claims payment report, to collect reimbursements due from a policyholder under a deductible agreement based on claim payments made by one or more guaranty associations or the California Insurance Guarantee Association, then the guaranty association or the California Insurance Guarantee Association may pursue collection from the policyholders directly on the same basis as the liquidator, and with the same rights and remedies, and shall report any amounts so collected from each policyholder to the liquidator. To the extent that the guaranty association or the California Insurance Guarantee Association pays claims within the deductible amount, but is not reimbursed by the liquidator under this section or by policyholder payments from the collection efforts of the guaranty association or the California Insurance Guarantee Association, the guaranty association or the California Insurance Guarantee Association shall have a claim against the insolvent insurer’s estate for the unreimbursed claims payments. (2) The liquidator shall periodically adjust the collateral being held as the claims subject to the deductible agreement are satisfied, provided that adequate collateral is maintained to secure the entire estimated ultimate obligation of the policyholder plus a reasonable safety factor, and provided further that the liquidator shall not be required to adjust the collateral more than once a year. The guaranty associations or the California Insurance Guarantee Association shall be informed of any collateral adjustment, including but not limited to, the basis for the adjustment. Once all claims covered by the collateral have been paid and the liquidator is satisfied that no new claims can be presented, the liquidator shall release any remaining collateral to the policyholder. (h) The court having jurisdiction over the liquidation proceedings shall have jurisdiction to resolve disputes arising under this provision. (i) Nothing in this section is intended to limit or adversely affect any right a guaranty association or the California Insurance Guarantee Association may have under applicable state law to obtain reimbursement from certain classes of policyholders for claims payments made by the guaranty association or the California Insurance Guarantee Association under policies of the insolvent insurer, or for related expenses the guaranty association or the California Insurance Guarantee Association incur. (j) This section shall apply only with respect to insolvencies occurring on or after January 1, 2006. (k) For purposes of this section, the following definitions apply: (1) “Collateral” means any form of security held to secure the obligations of a policyholder under a deductible agreement with an insurer subject to an order of liquidation under this article. (2) “Deductible agreement” means any policy, endorsement, contract, or security agreement, or a combination of any of those items, that provides for the policyholder to bear the risk of loss within a specified amount per claim or occurrence covered under a policy of insurance, and may be subject to the aggregate limit of policyholder reimbursement obligations. (3) “Noncovered claim” means a claim that is subject to a deductible agreement and is not covered by a guaranty association or the California Insurance Guarantee Association. (l) This section shall apply to claims funded by a guaranty association or the California Insurance Guarantee Association in excess of the deductible only if subdivision (e) is applicable. (Added by Stats. 2005, Ch. 95, Sec. 1. Effective January 1, 2006.)
  35. 1034.

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

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    This section defines a preference in an insolvency liquidation context and lets the liquidator avoid certain preferences; it also lets a court preserve a lien or title for the estate in some cases.

    ## 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. ) ## 1034. (a) A preference is a transfer of any of the property of the person proceeded against to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the person proceeded against within one year before the filing of a petition for liquidation pursuant to Section 1016, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. The following transactions shall be among those that may be considered a preference: (1) A transfer of property of the person proceeded against. (2) The creation of a lien on the property of the person proceeded against. (3) The entry of a judgment against the person proceeded against. (4) The transfers or other payments by the person proceeded against pursuant to subdivision (f) of Section 10506 in support of guarantees contemplated by Section 10506.4. (b) If a liquidation order is entered pursuant to Section 1016 while the person proceeded against is already subject to a conservation order, then the transfers described in subdivision (a) shall be deemed preferences if made or suffered within one year before the filing of the successful petition for conservation, or within two years before the filing of the successful petition for liquidation, whichever time is shorter. (c) Any preference may be avoided by the liquidator if any of the following is applicable: (1) The transfer was made within four months before the filing of the petition. (2) The creditor receiving the transfer or to be benefited thereby or his or her agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the person proceeded against was insolvent or was about to become insolvent. (3) The creditor receiving the transfer was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the person proceeded against to an officer, whether or not the person held that position, or any shareholder holding directly or indirectly more than 5 percent of any class of any equity security issued by the person proceeded against, or any other person, firm, corporation, association, or aggregation of persons with whom the person proceeded against did not deal at arm’s length. (d) Where the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property; except where a bona fide purchaser or lienor has given less than fair equivalent value, the purchaser or lienor shall have a lien upon the property to the extent of the consideration actually given. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator. (Repealed and added by Stats. 1995, Ch. 580, Sec. 6. Effective January 1, 1996.)
  36. 1034.1.

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

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    This section lets the commissioner avoid certain fraudulent transfers and obligations tied to a person being proceeded against in conservation or liquidation, and it can also reach some reinsurance transactions.

    ## 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. ) ## 1034.1. (a) Every transfer made or suffered and every obligation incurred by a person proceeded against within one year prior to the filing of a successful petition for conservation or liquidation under this article is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors. (b) A transfer made or an obligation incurred by a person proceeded against under this article, which is fraudulent under this section, may be avoided by the commissioner, except as to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value, and except that any purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for that transfer, lien, or obligation, may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and in that event, the commissioner shall succeed to and may enforce the rights of the purchaser, lienor, or obligee. (1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee. (2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the person proceeded against could obtain rights superior to the rights of the transferee. (3) A transfer that creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created. (4) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition. (5) The provisions of this subdivision apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers. (c) Every person receiving any property from the person proceeded against or any benefit thereof that is a fraudulent transfer under subdivision (a) shall be personally liable therefor and shall be bound to account to the commissioner. (d) Any transaction of the person proceeded against with a reinsurer shall be subject to avoidance by the commissioner under subdivision (b) if both of the following are applicable: (1) The transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release. (2) Any part of the transaction took place within one year prior to the date of filing of the petition through which the conservation or liquidation was commenced. The commissioner may avoid the transaction at any time within two years after the effective date of the transaction. If the transaction is so avoided, the parties shall be returned to their respective position as if the transaction had not occurred, and the commissioner may enforce the reinsurance contract as it existed prior to the transfer. (Added by Stats. 1995, Ch. 580, Sec. 7. Effective January 1, 1996.)
  37. 1035.

    ## 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 appoint staff in insolvency proceedings, must notify the legislative budget chair in writing after appointing certain officers, and must submit certain costs and expenses for court approval and payment rules. A chief executive officer appointment for the Conservation and Liquidation Office is subject to Senate confirmation.

    ## 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. ) ## 1035. (a) In any proceeding under this article, the commissioner may appoint and employ under his or her hand and official seal, special deputy commissioners, as his or her agents, and to employ clerks and assistants and to give to each of them those powers that he or she deems necessary. Upon appointing or employing special deputy commissioners or executive officers, the commissioner shall notify the Chair of the Joint Legislative Budget Committee, by letter, of the action. The costs of employing special deputy commissioners, clerks, and assistants appointed to carry out this article, and all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of that person under this article, shall be fixed by the commissioner, subject to the approval of the court, and shall be paid out of the assets of that person to the department. In the event the property of that person does not contain cash or liquid assets sufficient to defray the cost of the services required to be performed under the terms of this article, the commissioner may at any time or from time to time pay the cost of those services out of the appropriation for the maintenance of the department, but not out of the assets of other estates. Any amounts so paid shall be deemed expenses of administration and shall be repaid to the fund out of the first available moneys in the estate. (b) Any person appointed by the commissioner to serve in the capacity of chief executive officer of the department’s Conservation and Liquidation Office shall be subject to confirmation by the Senate. (Amended by Stats. 2012, Ch. 786, Sec. 14. (AB 2303) Effective January 1, 2013.)
  38. 1035.2.

    ## 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 department must set conflict-of-interest rules for the Conservation and Liquidation Office, issue a conflict-of-interest code, and ensure compliance by office staff and contractors.

    ## 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. ) ## 1035.2. (a) The officers and employees of the Conservation and Liquidation Office are subject to all conflict-of-interest provisions and financial disclosure requirements that would apply if they were employees of the department. (b) (1) Prior to February 1, 2002, the department shall determine, pursuant to the provisions of Section 19990 of the Government Code, those activities of the officers and employees of the Conservation and Liquidation Office that are inconsistent, incompatible, or in conflict with their duties as officers or employees of that office. (2) Prior to February 1, 2002, the department shall adopt and promulgate a Conflict of Interest Code pursuant to the provisions of Article 3 (commencing with Section 87300) of Chapter 7 of Title 9 of the Government Code, pertaining to the officers and employees of the Conservation and Liquidation Office. The Conflict of Interest Code and any other regulations necessary to implement this section shall be promulgated by the department as emergency regulations. (c) The provisions of Chapter 7 (commencing with Section 87100) of Title 9 of the Government Code shall apply to a person who contracts with the Conservation and Liquidation Office to the same extent as would apply if that person were entering into the same or similar contractual relationship with the department. (d) The department shall ensure that the officers and employees of the Conservation and Liquidation Office and persons who contract with that office comply with all provisions of this section. (Added by Stats. 2001, Ch. 630, Sec. 1. Effective January 1, 2002.)
  39. 1035.5.

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

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    The commissioner must seek court approval within 120 days to propose asset disbursements for an insolvent insurer, and the proposal must include listed safeguards and reporting requirements.

    ## 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. ) ## 1035.5. Notwithstanding the provisions of Article 14 (commencing with Section 1010), with regard only to those insurers subject to this article: (a) Within 120 days of the issuance of an order directing the winding up and liquidation of the business of an insolvent insurer under Section 1016, the commissioner shall make application to the court for approval of a proposal to disburse the insurer’s assets, from time to time as such assets become available, to the California Insurance Guarantee Association, or the California Life and Health Insurance Guarantee Association, and to any entity or person performing a similar function in another state. (b) The proposal shall at least include the following provisions for: (1) Reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors (to the extent of the value of the security held) and claims falling within the priorities established in paragraphs (1) to (4), inclusive, of subdivision (a) of Section 1033. (2) Disbursement of the assets marshaled to date and subsequent disbursements of assets as they become available. (3) Equitable allocation of disbursements to each of the associations entitled thereto. (4) The securing by the commissioner from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the commissioner such assets previously disbursed as may be required to pay claims of secured creditors and claims falling within the priorities established in paragraphs (1) to (5), inclusive, of subdivision (a) of Section 1033 in accordance with the priorities. No bond shall be required of any association. (5) A full report to be made by the association to the commissioner accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on the assets, and any other matter as the court may direct. (c) The commissioner’s proposal shall provide for disbursements to the associations in amounts estimated at least equal to the claim payments made or to be made by the associations for which such associations could assert a claim against the commissioner, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of the claim payments made or to be made by the associations, then disbursements shall be in the amount of available assets. The reserves of the insolvent insurer on the date of the order of liquidation shall be used for purposes of determining the pro rata allocation of funds among eligible associations. (d) The commissioner shall offset the amount disbursed to any entity or person performing a function in any other state similar to that function performed by the California Insurance Guarantee Association, or the California Life and Health Insurance Guarantee Association, by the amount of any statutory deposit, premiums, or any other asset of the insolvent insurer held in that state. (e) Notice of such application shall be given to the associations in and to the commissioners of insurance of each of the states. Any such notice shall be deemed to have been given when deposited in the United States certified mails, first-class postage prepaid, at least 30 days prior to submission of such application to the court. Action on the application may be taken by the court provided the above required notice has been given and provided further that the commissioner’s proposal complies with paragraphs (1) and (4) of subdivision (b). (Amended by Stats. 1993, Ch. 974, Sec. 1.4. Effective January 1, 1994.)
  40. 10350.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

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    Disability policies issued in this state must include the standard provisions listed in Sections 10350.1 to 10350.12, unless Section 10323 applies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350. Except as provided in Section 10323, each disability policy delivered or issued for delivery to any person in this State shall contain the provisions specified in Sections 10350.1 to 10350.12, inclusive, in the words in which the same appear in such sections; provided, however, that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. Such provisions shall be preceded individually by the caption appearing in each section or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the commissioner may approve. (Added by Stats. 1951, Ch. 570.)
  41. 10350.1.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

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    A disability policy must include this standard provision. The policy is the entire contract, and changes are not valid unless approved by an executive officer of the insurer and endorsed or attached. Agents cannot change the policy or waive its provisions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.1. A disability policy shall contain a provision which shall be in the form set forth herein. Entire Contract; Changes: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions. (Added by Stats. 1951, Ch. 570.)
  42. 10350.10.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

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    A disability policy must include the required provision; the insurer may examine the insured during a claim and may perform an autopsy if death occurs and the autopsy is not forbidden by law.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.10. A disability policy shall contain a provision which shall be in the form set forth herein. Physical Examinations and Autopsy: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law. (Added by Stats. 1951, Ch. 570.)
  43. 10350.11.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

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    A disability policy must include the required form provision, and lawsuits to recover on the policy cannot be filed until 60 days after written proof of loss is furnished or after three years from when proof of loss is required.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.11. A disability policy shall contain a provision which shall be in the form set forth herein. Legal Actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished. (Added by Stats. 1951, Ch. 570.)
  44. 10350.12.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

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    A disability policy must include the required beneficiary-change provision, though the insurer may omit the opening clause before the first comma.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.12. A disability policy shall contain a provision which shall be in the form set forth herein. At the insurer’s option, the clause of such provision which precedes the first comma may be omitted. Change of Beneficiary: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy. (Added by Stats. 1951, Ch. 570.)
  45. 10350.2.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include one of the section’s required forms; noncancellable policies may use Form A or Form B, while other policies must use Form A.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.2. A disability policy shall contain a provision that shall be in one of the two forms set forth in this section. Policies other than noncancellable policies shall use Form A. Noncancellable policies shall use either Form A or Form B. In Form B, the clause in parentheses in paragraph (a) may be omitted at the insurer’s option. Paragraph (a) in Form A shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial two-year period, nor to limit the application of Sections 10369.2 to 10369.6, inclusive, in the event of misstatement with respect to age or occupation or other insurance. Form A. Time Limit on Certain Defenses:(a) After two years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for the policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of the two-year period. (b) No claim for loss incurred or disability (as defined in the policy) commencing after two years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy. Form B. Incontestable:(a) After this policy has been in force for a period of two years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application. (b) No claim for loss incurred or disability (as defined in the policy) commencing after two years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy. (Amended by Stats. 2006, Ch. 538, Sec. 470. Effective January 1, 2007.)
  46. 10350.3.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include one of two required grace-period forms, and the form used depends on whether the insurer can refuse renewal.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.3. A disability policy shall contain a provision which shall be in one of the two forms set forth herein. Form A shall be used in a policy in which the insurer does not reserve the right to refuse any renewal. Form B shall be used in a policy in which an insurer reserves the right to refuse any renewal. The clause in parentheses may only be added if the policy contains a cancellation provision. In the blank in each such form shall be inserted a number; not less than “7” for weekly premium policies, “10” for monthly premium policies, and “31” for all other policies. Form A. Grace Period: A grace period of __ days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force (subject to the right of the insurer to cancel in accordance with the cancellation provision hereof). Form B. Grace Period: Unless not less than five days prior to the premium due date the insurer has delivered to the insured or has mailed to his last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted, a grace period of __ days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force (subject to the right of the insurer to cancel in accordance with the cancellation provision hereof). (Added by Stats. 1951, Ch. 570.)
  47. 10350.4.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include a reinstatement provision in the required form, unless it is a noncancellable policy for the last sentence. If renewal premium is paid late and the insurer or authorized agent accepts it, the policy is reinstated subject to stated conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.4. A disability policy shall contain a provision which shall be in the form set forth herein. The last sentence of such provision may be omitted from a noncancellable policy. Reinstatement: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy; provided, however, that if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the forty-fifth day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than 10 days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than 60 days prior to the date of reinstatement. (Added by Stats. 1951, Ch. 570.)
  48. 10350.5.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    Disability policies must include one of two notice-of-claim forms, and claim notice must be given within 20 days or as soon as reasonably possible.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.5. A disability policy shall contain a provision which shall be in one of the two forms set forth herein. Form A may be used in any policy. Form B may be used by an insurer, at its option, in a policy providing a loss of time benefit which may be payable for at least two years. In the blank space of such provision shall be inserted the location of such office or offices as the insurer may designate for the purpose of giving notice of claim. Form A. Notice of Claim: Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ____, or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. Form B. Notice of Claim: Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he shall, at least once in every six months after having given notice of claim, give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured’s right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given. Notice given by or on behalf of the insured or the beneficiary to the insurer at ____, or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. (Added by Stats. 1951, Ch. 570.)
  49. 10350.6.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include the standard provision stated here. After a notice of claim, the insurer must send the claimant the usual claim forms; if the forms are not sent within 15 days, the claimant is treated as having met the proof-of-loss requirement by submitting written proof within the policy’s filing 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.6. A disability policy shall contain a provision which shall be in the form set forth herein. Claim Forms: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within 15 days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made. (Added by Stats. 1951, Ch. 570.)
  50. 10350.7.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include a proof-of-loss provision, and written proof must be sent to the insurer within specified deadlines.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.7. A disability policy shall contain a provision which shall be in the form set forth herein. Proofs of Loss: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within 90 days after the termination of the period for which the insurer is liable and in case of claim for any other loss within 90 days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required. (Added by Stats. 1951, Ch. 570.)
  51. 10350.8.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include the stated claim-payment provision, and the payment period in that provision cannot be less frequent than monthly.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.8. A disability policy shall contain a provision which shall be in the form set forth herein. In the blank of such provision will be inserted the period for payment which must not be less frequently than monthly. Time of Payment of Claim: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid ____ and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof. (Added by Stats. 1951, Ch. 570.)
  52. 10350.9.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    A disability policy must include a claims-payment provision, and the insurer may choose to include extra paragraphs that let certain indemnities be paid in specific ways.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10350.9. A disability policy shall contain a provision which shall include the following first paragraph and which may, at the option of the insurer, include either or both of the following second and third paragraphs. If the provision contains the second paragraph, there shall be inserted in the blank an amount which shall not exceed one thousand dollars ($1,000). Payment of Claims: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured’s death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured. If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $____, to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment. Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer’s option and unless the insured requests otherwise in writing not later than the time of filing proofs of that loss, be paid directly to the person or persons having paid for the hospitalization or medical or surgical aid, or to the hospital or person rendering those services; but it is not required that the service be rendered by a particular hospital or person. (Amended by Stats. 1993, Ch. 744, Sec. 2.6. Effective January 1, 1994.)
  53. 10351.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    Disability insurance policies issued or renewed on or after the section’s effective date must, where feasible, cover confinement in an extended care facility on terms agreed by the insured or group policyholder 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10351. Each policy of disability insurance issued or renewed on or after the effective date of this section, shall provide, where feasible, that benefits for confinement in an extended care facility, as defined in subsection (j) of Section 1395x of Title 42 of the United States Code, may be provided under such terms and conditions as may be agreed upon between the insured, or group policyholder, and the insurer. Nothing in this section shall preclude a disability insurance policy from providing benefits for confinement in institutions other than extended care facilities as defined in this section. (Added by Stats. 1972, Ch. 522.)
  54. 10353.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    Disability insurance policies covering perinatal services must include direct reimbursement to certified nurse-midwives and nurse practitioners.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10353. (a) Every policy of disability insurance issued, amended, or renewed on or after January 1, 1992, that offers coverage for perinatal services shall contain a provision providing for direct reimbursement to certified nurse-midwives and nurse practitioners for perinatal services. The certified nurse-midwife or nurse practitioner may collect payment for any unpaid portion of his or her fee, as provided for under the plan for other providers. (b) For purposes of this section, “direct reimbursement” means that after the enrollee files a claim for the perinatal service provided by the certified nurse-midwife or nurse practitioner, the plan pays the certified nurse-midwife or nurse practitioner directly. (Added by Stats. 1991, Ch. 870, Sec. 4.)
  55. 10354.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. )

    Verify source ↗

    Certain disability insurance policies covering perinatal services must include direct reimbursement for licensed midwives.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Compulsory Standard Provisions—Uniform Provisions [10350 - 10354] ( Heading of Article 4 renumbered from Article 4a by Stats. 1980, Ch. 676, Sec. 194. ) ## 10354. (a) (1) Every policy of disability insurance issued, amended, or renewed on or after January 1, 1994, that offers coverage for perinatal services shall contain a provision for direct reimbursement to licensed midwives for perinatal services rendered under terms and conditions as may be agreed upon between the policyholder and the insurer. (2) The licensed midwife may collect payment for any unpaid portion of his or her fee, as provided under the policy for other providers. (3) Reasonable consideration shall be given to licensed midwives by disability insurers contracting for services at alternative rates. For the purposes of this section, “reasonable consideration” shall have the meaning provided in Section 10180. (b) For purposes of this section, “direct reimbursement” means that after the policyholder files a claim for the perinatal service provided under those terms and conditions as may be agreed upon between the policyholder and the insurer, the insurer pays the licensed midwife directly. (Added by Stats. 1993, Ch. 1280, Sec. 4. Effective January 1, 1994.)
  56. 1036.

    ## 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. )

    Verify source ↗

    In insurance delinquency proceedings, certain Government Code legal-services provisions apply; the commissioner sets outside counsel compensation subject to court approval, and that compensation is paid from the assets of the person proceeded against.

    ## 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. ) ## 1036. Notwithstanding any other provision of law, the provisions of Article 4 (commencing with Section 11040) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code, pertaining to legal services, shall apply in the institution and prosecution of all insurance delinquency proceedings under this code. The compensation of any counsel outside of California state service who is employed pursuant to these provisions to represent the commissioner as receiver shall be fixed by the commissioner, subject to the approval of the court. Compensation of counsel representing the commissioner as receiver shall be paid from the assets of the person against whom the commissioner has proceeded under this article. It is the intent of the Legislature and the Legislature finds it is in the best interest of the people of the State of California that the Attorney General and the Insurance Commissioner consult and cooperate in regard to utilizing agency counsel of the Department of Insurance as the commissioner’s legal counsel in delinquency proceedings, judicial and otherwise, to the extent appropriate and consistent with the interests of the parties beneficially interested in those proceedings and if that use would result in the savings of costs to the parties beneficially interested in those proceedings. (Amended by Stats. 1995, Ch. 893, Sec. 2. Effective January 1, 1996.)
  57. 10369.1.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy sold or delivered in this state generally must use the exact statutory wording for certain required provisions, unless Section 10323 applies or the commissioner approves different wording that is no less favorable to the insured or 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.1. Except as provided in Section 10323, no disability policy delivered or issued for delivery to any person in this State shall contain provisions respecting the matters set forth in Sections 10369.2 to 10369.12, inclusive, unless such provisions are in the words in which the same appear in such sections; provided, however, that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the commissioner, which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in each of such sections or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the commissioner may approve. (Added by Stats. 1951, Ch. 570.)
  58. 10369.10.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this provision, and any policy term that conflicts with the insured’s state statutes on the effective date is amended to match the minimum requirements of those statutes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.10. A disability policy may contain a provision in the form set forth herein. Conformity With State Statutes: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes. (Added by Stats. 1951, Ch. 570.)
  59. 10369.11.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this optional provision, and the insurer is not liable for losses caused by the insured committing or attempting a felony or engaging in an illegal occupation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.11. A disability policy may contain a provision in the form set forth herein. Illegal Occupation: The insurer shall not be liable for any loss to which a contributing cause was the insured’s commission of or attempt to commit a felony or to which a contributing cause was the insured’s being engaged in an illegal occupation. (Added by Stats. 1951, Ch. 570.)
  60. 10369.12.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this intoxication/substances provision, and the insurer is not liable for losses caused by the insured being intoxicated or under the influence of a controlled substance, except when administered on a physician’s advice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.12. (a) A disability policy may contain a provision in the form set forth herein. Intoxicants and controlled substances: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured’s being intoxicated or under the influence of any controlled substance unless administered on the advice of a physician. (b) Subdivision (a) shall not apply to a health insurance policy. (Amended by Stats. 2008, Ch. 630, Sec. 1. Effective January 1, 2009.)
  61. 10369.2.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this occupation-change provision. If the insured moves to a more hazardous occupation, the insurer may limit indemnity to what the premium would have bought for that risk. If the insured moves to a less hazardous occupation and proves the change, the insurer must lower the premium and refund any excess unearned 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.2. A disability policy may contain a provision in the form set forth herein. Change of Occupation: If the insured be injured or contract sickness after having changed his occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess pro-rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation. (Added by Stats. 1951, Ch. 570.)
  62. 10369.3.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this provision. If the insured’s age was misstated, the policy pays amounts based on what the premium would have bought at the correct age.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.3. A disability policy may contain a provision in the form set forth herein. Misstatement of Age: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age. (Added by Stats. 1951, Ch. 570.)
  63. 10369.4.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include an insurer-selected other-insurance provision in one of two specified forms.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.4. A disability policy may contain a provision which shall, at the option of the insurer, be in one of the two forms set forth herein. If Form A is used, there shall be inserted in the first blank the type of coverage or coverages and in the second blank the maximum limit of indemnity or indemnities. Form A. Other Insurance in This Insurer: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for ____ in excess of $____, the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to his estate. Form B. Other Insurance in This Insurer: Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his beneficiary or his estate, as the case may be, and the insurer will return all premiums paid for all other such policies. (Added by Stats. 1951, Ch. 570.)
  64. 10369.5.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this section’s optional provision, and if it also includes Section 10369.6, the caption must add the phrase “* * * expense incurred 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.5. A disability policy may contain a provision in the form set forth in this section. If the provision also contains the provision set forth in Section 10369.6, there shall be added to its caption the phrase, “* * * expense incurred benefits.” The insurer may, at its option, include in this provision a definition of “other valid coverage,” approved as to form by the commissioner. The definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or by hospital or medical service organizations, and to any other coverage, the inclusion of which may be approved by the commissioner. In the absence of that definition, the terms shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying this policy provision with respect to any insured, any amount of benefit provided for the insured pursuant to any compulsory benefit statute, including any workers’ compensation or employers’ liability statute, whether provided by a governmental agency or otherwise, shall in all cases be deemed to be “other valid coverage” of which the insurer has had notice. In applying this provision, no third party liability coverage shall be included as “other valid coverage.” Insurance With Other Insurers: If there is other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for the proportion of the loss as the amount which would otherwise have been payable under this policy plus the total of the like amounts under all the other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for the loss, and for the return of the portion of the premiums paid as shall exceed the pro-rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the “like amount” of the other coverage shall be taken as the amount which the services rendered would have cost in the absence of the coverage. (Amended by Stats. 1988, Ch. 160, Sec. 119.)
  65. 10369.6.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include this optional provision, and the insurer may add a commissioner-approved definition of “other valid 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.6. A disability policy may contain a provision in the form set forth in this section. If the provision is included in a policy which also contains the provision set forth in Section 10369.5, there shall be added to its caption the phrase, “* * * other benefits.” The insurer may, at its option, include in this provision a definition of “other valid coverage,” approved as to form by the commissioner. The definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of that definition the terms shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying this policy provision with respect to any insured, any amount of benefit provided for the insured pursuant to any compulsory benefit statute, including any workers’ compensation or employers’ liability statute, whether provided by a governmental agency or otherwise, shall in all cases be deemed to be “other valid coverage” of which the insurer has had notice. In applying this provision, no third party liability coverage shall be included as “other valid coverage.” Insurance With Other Insurers: If there is other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for the benefits under this policy shall be for the proportion of the indemnities otherwise provided under this policy for the loss as the like indemnities of which the insurer had notice, including the indemnities under this policy, bear to the total amount of all like indemnities for the loss, and for the return of the portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined. (Amended by Stats. 1988, Ch. 160, Sec. 120.)
  66. 10369.7.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability insurer may add an optional definition of “valid loss of time coverage,” but it must be approved by the commissioner. If total monthly loss-of-time benefits from all coverage exceed the insured’s earnings benchmark, the insurer’s liability is limited to a proportionate amount and part of premiums may have to be returned.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.7. A noncancellable disability policy may contain a provision in the form set forth herein. The insurer may, at its option, include in this provision a definition of “valid loss of time coverage,” approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the commissioner or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute (including any workmen’s compensation or employers’ liability statute), or benefits provided by union welfare plans or by employer or employee benefit organizations. Relation of Earnings to Insurance: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro-rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of two hundred dollars ($200) or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time. (Added by Stats. 1951, Ch. 570.)
  67. 10369.8.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    A disability policy may include an unpaid-premium deduction provision.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.8. A disability policy may contain a provision in the form set forth herein. Unpaid Premium: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom. (Added by Stats. 1951, Ch. 570.)
  68. 10369.9.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. )

    Verify source ↗

    This section lets an insurer cancel a disability policy by written notice, and lets the insured cancel after the original term has been continued, also by written notice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Optional Standard Provisions and Special Provisions—Uniform Provisions [10369.1 - 10369.12] ( Heading of Article 5 renumbered from Article 5a by Stats. 1980, Ch. 676, Sec. 196. ) ## 10369.9. A disability policy may contain a provision in the form set forth herein. Cancellation: The insurer may cancel this policy at any time by written notice delivered to the insured, or mailed to his last address as shown by the records of the insurer, stating when, not less than five days thereafter, such cancellation shall be effective; and after the policy has been continued beyond its original term the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation. (Added by Stats. 1951, Ch. 570.)
  69. 1037.

    ## 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. )

    Verify source ↗

    The commissioner may take control of an insolvent person’s business and assets and is given broad powers to collect, manage, sell, settle, invest, and transfer property, subject to specified court-approval limits.

    ## 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. ) ## 1037. Upon taking possession of the property and business of any person in any proceeding under this article, the commissioner, exclusively and except as otherwise expressly provided by this article, either as conservator or liquidator: (a) Shall have authority to collect all moneys due that person, and to do such other acts as are necessary or expedient to collect, conserve, or protect its assets, property, and business, and to carry on and conduct the business and affairs of that person or so much thereof as to him or her may seem appropriate. (b) Shall collect all debts due and claims belonging to that person, and shall have the authority to sell, compound, compromise, or assign, for the purpose of collection upon such terms and conditions as the commissioner deems best, any bad or doubtful debts. (c) Shall have authority to compound, compromise or in any other manner negotiate settlements of claims against that person upon such terms and conditions as the commissioner shall deem to be most advantageous to the estate of the person being administered or liquidated or otherwise dealt with under this article. (d) Shall have authority without notice, to acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any real or personal property of that person at its reasonable market value, or, in cases other than acquisition, sale, or transfer on the basis of reasonable market value, upon such terms and conditions as the commissioner may deem proper. However, no transaction involving real or personal property shall be made where the market value of the property involved exceeds the sum of twenty thousand dollars ($20,000) without first obtaining permission of the court, and then only in accordance with any terms that court may prescribe. (e) Shall have authority to transfer to a trustee or trustees, under a voting trust agreement, the stock of an insurer heretofore or hereafter issued to the commissioner as conservator or as liquidator in connection with a rehabilitation or reinsurance agreement, or any other proceeding under this article. This voting trust agreement shall confer upon the trustee or trustees the right to vote or otherwise represent that stock, and shall not be irrevocable for a period of more than 21 years. (f) May, for the purpose of executing and performing any of the powers and authority conferred upon the commissioner under this article, in the name of the person affected by the proceeding or in the commissioner’s own name, prosecute and defend any and all suits and other legal proceedings, and execute, acknowledge and deliver any and all deeds, assignments, releases and other instruments necessary and proper to effectuate any sale of any real and personal property or other transaction in connection with the administration, liquidation, or other disposition of the assets of the person affected by that proceeding; and any deed or other instrument executed pursuant to the authority hereby given shall be valid and effectual for all purposes as though it had been executed by the person affected by any proceeding under this article or by its officers pursuant to the direction of its governing board or authority. In cases where any real property sold by the commissioner under this article is located in a county other than the county wherein the proceeding is pending, the commissioner shall cause a certified copy of the order of his or her appointment, or order authorizing or ratifying the sale, to be filed in the office of the county recorder of the county in which that property is located. (g) Shall have authority to invest and reinvest, in such manner as the commissioner may deem suitable for the best interests of the creditors of that person, such portions of the funds and assets of that person in his or her possession as do not exceed the amount of the reserves required by law to be maintained by that person as reserves for life insurance policies, annuity contracts, supplementary agreements incidental to life business, and reserves for noncancellable disability policies, and which funds and assets are not immediately distributable to creditors. However, no investment or reinvestment shall be made which exceeds the sum of one hundred thousand dollars ($100,000) without first obtaining permission of the court, and then only in accordance with any terms that court may prescribe. That permission shall not be required for any investment or reinvestment of those funds or assets in funds administered by the Treasurer. The enumeration, in this article, of the duties, powers and authority of the commissioner in proceedings under this article shall not be construed as a limitation upon the commissioner, nor shall it exclude in any manner his or her right to perform and to do such other acts not herein specifically enumerated, or otherwise provided for, which the commissioner may deem necessary or expedient for the accomplishment or in aid of the purpose of such proceedings. (Amended by Stats. 1988, Ch. 356, Sec. 1.)
  70. 1038.

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

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    An application under section 1011 or 1016 must be served on the named person in the manner required for personal service of summons, or as allowed by section 1039.

    ## 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. ) ## 1038. Any application under section 1011 or 1016 shall be served upon the person named in such application in the manner prescribed by law for personal service of summons or as provided by section 1039. (Amended by Stats. 1935, Ch. 291.)
  71. 1039.

    ## 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 service under section 1038 cannot be made because the required person is out of state or hiding, the court may let service be made in another way it directs after application and affidavit.

    ## 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. ) ## 1039. In lieu of the service required by section 1038, service may, upon application to said court, be made in such manner as the court directs whenever it is satisfactorily shown by affidavit (a) in the case of a corporation, that the officers of the corporation upon whom service is required to be made as above provided, have departed from the State or keep themselves concealed therein with intent to avoid the service, or, (b) in the case of a Lloyd’s association or interinsurance exchange, that the individual attorney in fact or the officers of the corporate attorney in fact can not be served because of such departure or concealment, or, (c) in the case of a natural person, that the natural person upon whom service is required to be made as above provided, has departed from the State or keeps himself concealed therein with intent to avoid the service. (Amended by Stats. 1935, Ch. 291.)
  72. 10395.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Exemption [10395- 10395.] ( Article 7 enacted by Stats. 1935, Ch. 145. )

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    Sections 800 through 804 do not apply to disability 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Exemption [10395- 10395.] ( Article 7 enacted by Stats. 1935, Ch. 145. ) ## 10395. The provisions of Sections 800, 801, 802, 803, and 804 shall not apply to disability insurance. (Amended by Stats. 1980, Ch. 676, Sec. 198.)
  73. 104.

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

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    Title insurance is insurance that covers owners, lienholders, or other interested persons against loss or damage from title-related liens, defects, unenforceable liens, or incorrect title searches.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 104. Title insurance means insuring, guaranteeing or indemnifying owners of real or personal property or the holders of liens or encumbrances thereon or others interested therein against loss or damage suffered by reason of: (a) Liens or encumbrances on, or defects in the title to said property; (b) Invalidity or unenforceability of any liens or encumbrances thereon; or (c) Incorrectness of searches relating to the title to real or personal property. (Repealed and added by Stats. 1973, Ch. 1130.)
  74. 1040.

    ## 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 an order under section 1011 or 1016, the commissioner may move the person’s principal office to San Francisco or Los Angeles, and the court must have its clerk send the case papers to the receiving county.

    ## 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. ) ## 1040. At any time after an order is made under section 1011 or 1016, the commissioner may remove the principal office of the person proceeded against to the City and County of San Francisco or to the city of Los Angeles. In event of such removal, the court wherein the proceeding was commenced shall, upon the application of the commissioner, direct its clerk to transmit all of the papers filed therein with such clerk to the clerk of the City and County of San Francisco or of the county of Los Angeles as the case may require. The proceeding shall thereafter be conducted in the same manner as though it had been commenced in the county to which it had been transferred. (Amended by Stats. 1935, Ch. 291.)
  75. 10400.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    A person who willfully violates a provision of this chapter or a commissioner order may be fined up to $118 per violation, and the commissioner may suspend or revoke an insurer’s or agent’s license.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 10400. Any person willfully violating any provision of this chapter or order of the commissioner made in accordance therewith shall forfeit to the people of this state a sum not to exceed one hundred eighteen dollars ($118) for each such violation, which sum may be recovered by civil action. The commissioner may also suspend or revoke the license of an insurer or agent for any such willful violation. (Amended by Stats. 1985, Ch. 770, Sec. 16.3.)
  76. 10401.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    Certain disability insurers and their agents must not discriminate between insureds of the same class.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 10401. Any incorporated insurer admitted for disability insurance and any agent of such insurer, that makes or permits any discrimination between insureds of the same class in any manner whatsoever with relation to such insurance, is guilty of a misdemeanor. The payment to insureds by an insurer of alternative rates of payment negotiated and contracted for with institutional providers shall not constitute a violation of this section. On and after July 1, 1983, the amendments made to this section during the 1982 portion of the 1981–82 Regular Session, shall also be applicable with respect to both professional and institutional providers. (Amended by Stats. 1982, Ch. 329, Sec. 8.5.)
  77. 10402.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    This section makes it a misdemeanor to solicit a provider for alternative-rate contracting without prior authorization, and it also penalizes insurers or plans that arrange such solicitation or contracting under their own name incorrectly.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 10402. Any person who, without the prior authorization of an insurer or plan solicits a provider to enter into a contract for alternative rates under Section 10133 or 11512 of this code on behalf of such insurer or plan shall be guilty of a misdemeanor. An insurer or plan which contracts for, or authorizes another person to, solicit or contract for alternative rates with providers on its behalf other than in the name of such insurer or plan shall be guilty of a misdemeanor. (Added by Stats. 1982, Ch. 1594, Sec. 12. Effective September 30, 1982. Operative January 1, 1983, by Sec. 82 of Ch. 1594.)
  78. 10402.1.

    ## 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 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. )

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    An insurer or plan that knowingly accepts or ratifies a contract for alternative rates, under the stated conditions, commits a misdemeanor.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4. Standard Provisions in Disability Policies [10270 - 10402.1] ( Chapter 4 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Penalties [10400 - 10402.1] ( Article 8 enacted by Stats. 1935, Ch. 145. ) ## 10402.1. An insurer or plan which accepts or ratifies a contract for alternative rates known by it to have been executed by a provider prior to the insurer’s or plan’s authorization, in reliance on the representation that it was authorized by such insurer or plan, shall be guilty of a misdemeanor. (Added by Stats. 1982, Ch. 1594, Sec. 13. Effective September 30, 1982. Operative January 1, 1983, by Sec. 82 of Ch. 1594.)
  79. 10403.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4.1. General Regulation of Health Insurers [10403- 10403.] ( Chapter 4.1 added by Stats. 2020, Ch. 12, Sec. 35. )

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    Health insurers covered by the referenced chapter must comply with its data submission requirements or face civil penalties.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 4.1. General Regulation of Health Insurers [10403- 10403.] ( Chapter 4.1 added by Stats. 2020, Ch. 12, Sec. 35. ) ## 10403. A health insurer that is subject to the requirements of Chapter 8.5 (commencing with Section 127671) of Part 2 of Division 107 of the Health and Safety Code and that fails to comply with the data submission requirements of that chapter is subject to a civil penalty not to exceed five thousand dollars ($5,000) for each 30-day period in which the insurer fails to comply. If the failure to comply is willful, the insurer is subject to a civil penalty not to exceed ten thousand dollars ($10,000) for each 30-day period in which the person fails to comply. The aggregate penalty for each instance of noncompliance shall not exceed one hundred thousand dollars ($100,000). In determining the penalty, the commissioner shall consider the good faith of the insurer and any similar prior violations by the insurer. (Added by Stats. 2020, Ch. 12, Sec. 35. (AB 80) Effective June 29, 2020.)
  80. 1041.

    ## 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 must keep custody of money collected in these proceedings. The commissioner may place it in certain banks or Treasury-related accounts without court approval, and the Treasurer may invest or reinvest money available for investment. Investment earnings must be returned to the commissioner, and the Treasurer may recover reasonable costs from those funds.

    ## 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. ) ## 1041. The commissioner shall be the custodian of all moneys collected by him or her or coming into his or her possession in the course of any proceeding under this article, but the commissioner may deposit those moneys, or any part thereof, without court approval in a bank which is a member of the Federal Deposit Insurance Corporation (FDIC), so long as the total deposit did not exceed those federal insurance limits; in a centralized State Treasury system bank account; or in funds administered by the Treasurer. Provided further, any money which is deposited by the commissioner pursuant to this section, which the commissioner determines is available for investment, may be invested or reinvested by the Treasurer in any of the securities which are described in Article 1 (commencing with Section 16430) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code, or placed in a bank as provided in Chapter 4 (commencing with Section 16500) of Part 2 of Division 4 of Title 2 of the Government Code, and handled in the same manner as money in the State Treasury. Any increment which is received from that investment or reinvestment or deposit shall be remitted to the commissioner for allocation, upon a proper and equitable basis, to each estate participating in the investment, reinvestment, or deposit and deposited and disbursed as provided in Section 1037. The Treasurer may deduct from that remittance an amount equal to the reasonable costs incurred in carrying out this section or may bill the commissioner for those costs and the commissioner shall pay those costs from money which is collected pursuant to this chapter. (Amended by Stats. 1988, Ch. 356, Sec. 2.)
  81. 1042.

    ## 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 and a special deputy commissioner may subpoena witnesses and examine them under oath about matters relating to persons affected by these proceedings.

    ## 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. ) ## 1042. The commissioner and a special deputy commissioner appointed pursuant to section 1035 shall have the power to subpoena witnesses and examine them under oath upon any subject relating to the affairs and business of any person affected by proceedings under this article. The penalties provided in Chapter II, Title III, Part IV of the Code of Civil Procedure shall apply to any witness who fails or refuses to appear in accordance with such subpoena, or to testify in connection therewith. (Amended by Stats. 1935, Ch. 291.)
  82. 1043.

    ## 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, with court approval, mutualize or reinsure a business or enter rehabilitation agreements. The agreement must stop investments or reinvestments of the rehabilitated or reinsured assets unless the commissioner gives written approval. Certain commissioners and deputy commissioners are barred for two years from taking paid or leadership roles in related companies, and violations are punishable as public offenses.

    ## 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. ) ## 1043. In any proceeding under this article, the commissioner, as conservator or as liquidator, may, subject to the approval of said court, and subject to such liens as may be necessary mutualize or reinsure the business of such person, or enter into rehabilitation agreements. No commissioner who acts as conservator of such person or who mutualizes, merges or reinsures the business of such person or who enters into rehabilitation agreements affecting such person, and no deputy commissioner who has participated in the administration of the affairs of such person for the commissioner as conservator shall for a period of two years from and after the effective date of such mutualization, reinsurance or rehabilitation become an officer or director of, or serve as an officer or director of, or serve in any position of gain or profit in, any company formed in whole or in part of the assets or funds, or any part of the assets or funds of such mutualized, merged, reinsured or rehabilitated person. Every person violating this provision is guilty of a public offense and shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail not exceeding one year, or by a fine not exceeding ten thousand dollars ($10,000), or by both that fine and imprisonment. Such rehabilitation or reinsurance agreements shall provide that, subsequent to the date thereof and for such period of time as the commissioner may determine, no investment or reinvestment of the assets of the person rehabilitated or reinsured shall be made without first obtaining the written approval of the commissioner. Every party to such agreement, and every director, officer, agent and employee of such person, and every other person who knowingly in violation thereof directs or aids or assists in causing to be made an investment or reinvestment of any of said assets without first having obtained the written approval of the commissioner, or who makes such investment or reinvestment in nonconformity with the written approval of the commissioner then in effect authorizing such investment or reinvestment, is guilty of a public offense and shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail or by a fine not exceeding ten thousand dollars ($10,000), or by both that fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 208. (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.)
  83. 10430.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An admitted life insurer must not issue or deliver certain profit-promising securities or contracts in this state, and must not let its agents, officers, or employees do so.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10430. An admitted life insurer shall not issue or deliver in this State, any securities or any special or advisory board or other contracts of any kind promising returns and profits as an inducement to insurance nor shall it permit its agents, officers or employees to do so. (Enacted by Stats. 1935, Ch. 145.)
  84. 10431.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A life insurer may not be admitted if, as an inducement to insurance, it issues or allows its agents, officers, or employees to issue securities or contracts in this state or another 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10431. A life insurer which, as an inducement to insurance, issues or permits its agents, officers, or employees to issue any such securities or contracts in this State or any other State shall not be admitted. (Enacted by Stats. 1935, Ch. 145.)
  85. 10432.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    A corporation or stock company acting for a life insurer, and its agents, officers, or employees, may not sell or offer securities or contracts as an inducement to insurance or in connection with 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10432. A corporation or stock company, acting as agent of a life insurer and its agents, officers, or employees shall not sell, agree or offer to sell, or give or offer to give, directly or indirectly, any such securities or contracts as an inducement to insurance or in connection therewith. (Enacted by Stats. 1935, Ch. 145.)
  86. 10433.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    After notice and hearing, the commissioner must revoke an insurer’s or agent’s certificate of authority or license if there is proof they violated sections 10430, 10431, or 10432.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10433. Upon proof, after notice and hearing, that any such insurer or agent has violated any of the provisions of sections 10430, 10431, or 10432, the commissioner shall revoke the certificate of authority or license of the insurer or agent so offending. (Enacted by Stats. 1935, Ch. 145.)
  87. 10434.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An admitted life insurer may not pay contingent commissions or similar compensation to the listed officers and directors, with a limited exception for certain director compensation and a separate exception for some officer compensation based on aggregate insurance amounts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10434. (a) An admitted life insurer shall not pay or contract to pay, directly or indirectly, to any of the parties specified in subdivision (b) any commission or other compensation contingent upon any of the following acts: (1) The writing or procuring of any policy of life, disability or both classes of insurance issued by the insurer. (2) Procuring an application therefor by any person. (3) The payment of any renewal premium or the assumption of any life, disability or both of these classes of insurance by the insurer. (b) It shall not pay this compensation to: (1) Its president. (2) Its vice president. (3) Its secretary. (4) Its treasurer. (5) Its actuary. (6) Its medical director or other physician charged with the duty of examining risks or applications for any of these classes of insurance. (7) Any member of its board of directors, except when that compensation to be paid to the director would be less than the lesser of 1 percent of the insurer’s statutory net gain from operations or 1 percent of commissions on premiums and annuity considerations for the preceding calendar year. This exception shall not apply when more than two of the members of the board of directors of the insurer, when the total number of board members is more than 10, or more than one of the members of the board of directors of the insurer, when the total number of board members is less than 10, would receive that compensation, nor shall this exception apply to any director who has served more than two years as a director. Any director receiving compensation pursuant to this paragraph shall be ineligible to vote on all matters directly relating to that compensation and shall not be counted for purposes of a quorum as to those matters. (8) Any officer of the insurer other than its agent or solicitor. (c) Nothing in this article shall prevent the payment of compensation to an officer of the insurer based upon the aggregate amounts of insurance issued by the insurer, or issued and in force, during any specified period if the officer is not directly responsible for recommending, underwriting, rating, or otherwise approving the acceptability of insurance risks. (Amended by Stats. 1986, Ch. 1139, Sec. 1.)
  88. 10435.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    If an insurer violates Section 10434, the commissioner may revoke or refuse to issue its certificate of authority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10435. Whenever any insurer violates Section 10434, the commissioner may revoke its certificate of authority or refuse to issue a certificate of authority to that insurer. (Amended by Stats. 1986, Ch. 1139, Sec. 2.)
  89. 10436.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. )

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    An admitted life insurer may issue a long-term care rider for a life insurance policy if the commissioner has reviewed and approved 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1. Restrictions on Business [10430 - 10436] ( Article 1 enacted by Stats. 1935, Ch. 145. ) ## 10436. An admitted life insurer may issue a rider to a policy of life insurance for the purpose of providing coverage for long-term care, if the rider has been reviewed and approved, in a manner similar to that of other long-term care insurance products, by the commissioner. (Added by Stats. 1988, Ch. 1015, Sec. 1.)
  90. 1044.

    ## 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 impose a court-directed moratorium on certain life insurance policy provisions in a rehabilitation or reinsurance agreement.

    ## 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. ) ## 1044. In connection with a rehabilitation agreement under section 1043, which affects a life insurer, and in an agreement made for the reinsurance of the business of a life insurer under said section, there may be included in such rehabilitation or reinsurance agreement a provision for, and the commissioner shall have authority to impose and declare, a moratorium against the provisions of the life insurance policies therein involved calling for the making of loans on the security of such policies and for the payment of money upon the surrender of such policies, such moratorium to continue for such period and to such extent as may be directed by said court. (Amended by Stats. 1935, Ch. 291.)
  91. 10440.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers [10440 - 10442] ( Article 1a added by Stats. 1957, Ch. 425. )

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    For certain domestic mutual insurer member meetings, 5% of members entitled to vote present in person, by proxy, or by written vote makes a quorum unless a higher percentage is required.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers [10440 - 10442] ( Article 1a added by Stats. 1957, Ch. 425. ) ## 10440. In any meeting of members of a domestic mutual insurer writing classes of insurance which include life or disability insurance, the presence in person or by proxy or written vote of 5 percent of the members entitled to vote shall constitute a quorum for the transaction of business unless a higher percentage is required by this code or by the by-laws or articles of incorporation of the insurer. (Added by Stats. 1957, Ch. 425.)
  92. 10441.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers [10440 - 10442] ( Article 1a added by Stats. 1957, Ch. 425. )

    Verify source ↗

    Section 10441 says Section 10440 does not apply to certain transactions, meetings, or votes covered by specified Corporations Code sections.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers [10440 - 10442] ( Article 1a added by Stats. 1957, Ch. 425. ) ## 10441. The provisions of Section 10440 shall not apply to any of the transactions, meetings, or votes described in Sections 1001, 1103, and 1900 of the Corporations Code. (Amended by Stats. 1978, Ch. 349.)
  93. 10442.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers [10440 - 10442] ( Article 1a added by Stats. 1957, Ch. 425. )

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    Except where this article or other code provisions say otherwise, the internal affairs of certain domestic mutual insurers must be governed by Division 1 of Title 1 of the Corporations Code.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers [10440 - 10442] ( Article 1a added by Stats. 1957, Ch. 425. ) ## 10442. Except as otherwise provided in this article or in the other provisions of this code, the internal affairs of every domestic mutual insurer writing classes of insurance which include life or disability insurance shall be governed by Division 1 of Title 1 of the Corporations Code. For the purpose of applying the provisions of Division 1 of Title 1 of the Corporations Code, the provisions thereof referring to shareholders or members shall be applied as though such provisions referred to the policyholders or members of a mutual insurer. (Added by Stats. 1957, Ch. 425.)
  94. 1045.

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

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    If the section 1011 order concerns a qualifying life insurer, the commissioner may prepare a mutualization plan if that would best achieve section 1011’s purposes.

    ## 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. ) ## 1045. If at any time after the issuance of an order under section 1011 affecting a life insurer issuing nonassessable policies on a reserve basis and organized with a capital stock evidenced by shares thereof it shall appear to the commissioner that the purposes of section 1011 can be best attained by the mutualization of such life insurer, the commissioner may formulate a plan for the mutualization of such insurer. (Amended by Stats. 1935, Ch. 291.)
  95. 10450.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Certain life insurers may register their policies with the commissioner, but only in the manner and subject to the restrictions stated in 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10450. Any insurer transacting life insurance in this State on September 30, 1939, may register its policies with the commissioner in the manner and subject to the restrictions set forth in this article. (Amended by Stats. 1939, Ch. 933.)
  96. 10450.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer that was not registering its policies under this article on September 30, 1939, cannot later register 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10450.5. An insurer which is not registering its policies pursuant to the provisions of this article on September 30, 1939, shall not thereafter be permitted to register its policies. (Added by Stats. 1939, Ch. 933.)
  97. 10450.6.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer that was registering policies on June 30, 1939 had to keep registering all life policies unless it filed an election with the commissioner by the stated deadline to stop that registration.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10450.6. Any insurer registering its policies pursuant to this article on June 30, 1939, which fails prior to September 1, 1941, to file with the commissioner an election to cease such registration on or before December 31, 1941, shall thereafter continue to register all life policies issued by it. Whenever it fails to continue such registration thereafter, the commissioner shall revoke its certificate of authority, and its condition shall thereupon conclusively be deemed to be such that its further transaction of business will be hazardous to its policyholders, or creditors, or to the public, within the meaning of subdivision (d) of section 1011 of this code. (Added by Stats. 1939, Ch. 933.)
  98. 10451.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    If an insurer chooses to register one of its policies, it must register every later policy it issues until it stops registering 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10451. When an insurer elects to register any of its policies, it shall register every policy thereafter issued by it until it discontinues registration. (Enacted by Stats. 1935, Ch. 145.)
  99. 10452.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    Registered life policies must show the insured’s name and age, the policy number and date, and the kind and amount 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10452. Such registration shall in each case show the name and age of the insured, number and date of the policy and the kind and amount of insurance. (Enacted by Stats. 1935, Ch. 145.)
  100. 10454.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer registering policies must maintain a special deposit of securities with the commissioner for the benefit of the registered 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10454. An insurer registering policies shall maintain a special deposit of securities with the commissioner for the benefit of such registered policies. Such securities shall be of the character specified in Articles 3, 4 and 6 of Chapter 2, Part 2, Division 1, or specified in sections 10459 and 10460. (Enacted by Stats. 1935, Ch. 145.)
  101. 10455.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must give a receipt for deposited securities, and the State is responsible for their custody and safe return.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10455. The commissioner shall give his receipt for the securities and the State shall be responsible for the custody and safe return of any securities so deposited. (Enacted by Stats. 1935, Ch. 145.)
  102. 10456.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A deposit must be kept at an amount equal to the full net value of registered policies, minus any amount loaned on 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10456. Such deposit shall be maintained in an amount equal to the full net value of all policies registered up to the time of making the deposit, less the amount loaned on such registered policies. (Enacted by Stats. 1935, Ch. 145.)
  103. 10457.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must immediately deposit the received securities in the State Treasury.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10457. Upon receipt of such securities, the commissioner shall immediately deposit them in the State Treasury in accordance with the provisions of Sections 940 to 946, inclusive, where they shall remain as a special security for the benefit of such registered policies. (Amended by Stats. 1980, Ch. 676, Sec. 199.)
  104. 10458.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    An insurer may withdraw excess deposited securities if it gives the commissioner written proof that the excess exists.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10458. Such insurer may at any time withdraw any excess of such securities above the required amount upon satisfying the commissioner by written proof that such excess exists. It may receive the interest on all securities deposited, and exchange such securities by substituting other securities of the required character. (Enacted by Stats. 1935, Ch. 145.)
  105. 10459.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    A life insurer may mortgage certain property to the commissioner if the commissioner अनुमति/permission is given and the mortgage amount does not exceed the property’s market value.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10459. If such insurer owns the building in which it has its principal office and the land upon which it stands, or if it owns other real property located in this State and requisite for its accommodation in the convenient transaction of its business, it may, with the permission of the commissioner, mortgage such property to the commissioner for such sum, not exceeding the market value thereof, as he determines. (Enacted by Stats. 1935, Ch. 145.)
  106. 1046.

    ## 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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    A mutualization plan must include specified provisions about buying and retiring stock, amending the charter, paying claims, submitting the plan to policyholders, and notifying shareholders.

    ## 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. ) ## 1046. Said mutualization plan shall include provisions for: (a) The acquisition by such insurer of all outstanding shares of its capital stock at a price and upon terms and conditions to be fixed as hereinafter provided. (b) The retirement of said shares of stock when acquired by such insurer. (c) The amendment of the charter of such insurer so as to enable it to transact its business as a mutual insurer issuing nonassessable policies on a reserve basis. (d) The manner in which and the time within which, after mutualization is effected, matured and maturing claims against such insurer shall be paid to the lawful holders thereof. (e) The submission of said mutualization plan to the policyholders of such insurer under such procedure as shall be set forth in the plan or prescribed by said court, for their approval or rejection. (f) Notice to the shareholders of such insurer, in such manner and at such time after the approval of said mutualization plan by said policyholders, as the court may direct. (Amended by Stats. 1935, Ch. 291.)
  107. 10460.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must require a mortgage to be recorded before accepting it for deposit.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10460. Such mortgage may be deposited in the State treasury as part of the securities required by this article. Such mortgage is withdrawable in like manner with other securities in the deposit. The commissioner shall require the mortgage to be recorded before acceptance for deposit. (Enacted by Stats. 1935, Ch. 145.)
  108. 10461.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may release the mortgage, or foreclose it if foreclosure becomes 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10461. The commissioner may release any such mortgage or may foreclose it in case such foreclosure becomes necessary. (Enacted by Stats. 1935, Ch. 145.)
  109. 10462.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    If an insurer registering policies becomes insolvent, the commissioner may reinsure all or part of those registered policies using the deposited securities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10462. Should any insurer thus registering policies become insolvent, the commissioner may reinsure all or any part of such registered policies, using the securities thus deposited for that purpose. (Enacted by Stats. 1935, Ch. 145.)
  110. 10463.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must require a 25-cent fee in advance for registering each policy under 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 2. Registration of Life Policies [10450 - 10463] ( Article 2 enacted by Stats. 1935, Ch. 145. ) ## 10463. The commissioner shall require in advance, in lawful money of the United States, as a fee for registering each policy as provided by this article, twenty-five cents. (Amended by Stats. 1939, Ch. 933.)
  111. 1047.

    ## 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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    A mutualization plan may include moratoriums, liens, capital adjustments, and rules for compensating policyholders and shareholders, but any change to the moratorium needs the commissioner’s written approval.

    ## 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. ) ## 1047. Said mutualization plan may include provisions: (a) Imposing a moratorium against the provisions of the life insurance policies issued by such insurer and then in force calling for the making of loans on the security of such policies and for the payment of money upon the surrender of such policies, for a period and to an extent to be named in such provisions imposing such moratorium, and subject to extension, change or prior termination only upon the written approval of the commissioner. (b) Imposing liens upon, or otherwise adjusting, the policies of the insurer so as to create or make available the minimum paid-in capital required of such an insurer to be admitted and such additional paid-in capital as will be reasonably sufficient to enable such insurer to carry on its business. No lien or adjustment of such insurer’s policies shall be made or imposed which has the effect of creating or making available for distribution to the shareholders of such insurer assets otherwise unavailable therefor. (c) Regulating and adjusting the respective rights of holders of policies of different classes to participate in the profits or savings which may be made by such insurer when mutualized. (d) Regulating the manner in which and the time at which the shareholders of such insurer shall be compensated for their proprietary interest, then existing, in the assets of such insurer other than goodwill. (e) Regulating the manner in which the shareholders of such insurer shall be compensated for their proprietary interest in the goodwill, if then existing, of such insurer; provided, however, that no shareholder shall be compensated for his proprietary interest in such goodwill while any moratorium imposed under subdivision (a) of this section is in effect, nor while any lien imposed under subdivision (b) of this section exists, nor until all other indebtedness of such insurer existing at the time of mutualization has been fully paid and discharged or full provision made for its payment, nor otherwise than out of surplus earnings. (f) Regulating such other matters as may, in the opinion of the commissioner, require regulation in the interest of expediency or otherwise. (Amended by Stats. 1937, Ch. 932.)
  112. 10478.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    This section applies only to policies and contracts issued before 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10478. This article is applicable only to policies and contracts issued prior to the operative date as to such policies or contracts of Article 3a, Chapter 1, Part 2, Division 2. (Added by Stats. 1943, Ch. 955.)
  113. 10479.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner must annually value life insurer reserves, with a U.S.-only limit for alien insurers, and may certify and use alternative methods or accept another jurisdiction’s valuation if 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10479. The commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every admitted life insurer, except that in the case of an alien insurer such valuation shall be limited to its insurance transactions in the United States, and may certify the amount of any such reserves, specifying the mortality table or tables, rate or rates of interest and methods (net level premium method or other) used in the calculation of such reserves. In calculating such reserves, he or she may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves herein required of any foreign or alien insurer, he or she may accept any valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when such valuation complies with the minimum standard herein provided and if the official of such state or jurisdiction accepts as sufficient and valid for all legal purposes the certificate of valuation of the commissioner when such certificate states the valuation to have been made in a specified manner according to which the aggregate reserves would be at least as large as if they had been computed in the manner prescribed by the law of that state or jurisdiction. (Amended by Stats. 1991, Ch. 1005, Sec. 1.)
  114. 10479.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    After valuing an insurer’s reserve liabilities, the commissioner may issue an official certificate if the insurer requests 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10479.5. When the commissioner has valued the reserve liabilities of an insurer as provided by this article, he or she may upon request of the insurer issue his or her official certificate or certificates describing the reserve liability and the valuation thereof as he or she has determined. For issuing an original certificate, the commissioner shall require, in advance, a fee of forty-seven dollars ($47), plus the actual cost to the department of making the valuation on which the certificate is based including, but not limited to, the aggregate salaries computed on an hourly basis for the time actually spent thereon by all of the department personnel. (Amended by Stats. 2017, Ch. 534, Sec. 60. (AB 1699) Effective January 1, 2018.)
  115. 1048.

    ## 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 mutualization plan is formulated, the commissioner must submit it to the court with an application for an order, and the court must issue that order.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 14. Proceedings in Cases of Insolvency and Delinquency [1010 - 1062] ( Article 14 amended by Stats. 1935, Ch. 291. ) ## 1048. Upon formulation of said mutualization plan the commissioner shall submit the same to said court with his application for an order of said court directing the commissioner to submit said mutualization plan to the persons named in subdivision (e) of section 1046, under such procedure as shall be set forth in the plan or prescribed by said court, for their approval or rejection, and the court shall issue such order. (Amended by Stats. 1935, Ch. 291.)
  116. 10480.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Each domestic incorporated life insurer must send the commissioner the data needed to value all policies outstanding as of the previous December 31, by March 1 each year.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10480. On or before the first day of March of each year every domestic incorporated life insurer shall furnish the commissioner the necessary data for determining the valuation of all its policies outstanding on the last preceding thirty-first of December. (Amended by Stats. 1991, Ch. 1005, Sec. 3.)
  117. 10481.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An admitted foreign life insurer must give the commissioner the data needed to value all outstanding policies when the commissioner makes a written demand and sets the time for response.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10481. Every admitted foreign life insurer shall, upon the written demand of the commissioner, furnish him or her, at such time as he designates, the requisite data for determining the valuation of all its policies then outstanding. (Amended by Stats. 1991, Ch. 1005, Sec. 4.)
  118. 10482.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Life policy valuations must use the standards in Section 986, except for the stated 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10482. Except as provided in Sections 10484 and 10485, and except as provided in Section 10489.7 for benefits purchased under group annuity and pure endowment contracts subject to this article, valuations of life policies must be based on the standards set forth in Section 986. (Amended by Stats. 1973, Ch. 456.)
  119. 10483.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    If another state requires a different valuation standard, the commissioner may value a domestic life insurer’s outstanding policies and issue a certificate for that use.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10483. When the laws of any other State require a valuation of the outstanding policies of a domestic life insurer by any standard of valuation different from that named in this article, the commissioner may make such valuation for use in such other State, and issue his certificate in accordance therewith. (Enacted by Stats. 1935, Ch. 145.)
  120. 10484.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    The commissioner may change the mortality standard for certain life insurance issued by a domestic insurer in a foreign country.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10484. In the case of insurance issued by a domestic insurer authorized to do business in a foreign country upon the lives of residents of that country, the commissioner may vary the mortality standard to a standard applicable to that country. (Enacted by Stats. 1935, Ch. 145.)
  121. 10485.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    A life insurer that issues group life policies may value them using an accepted mortality table and its chosen interest assumption, so long as the standard is not below the American Men Ultimate Table of Mortality at 3.5% interest per year.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10485. Any life insurer issuing policies of group life insurance may value such policies on any accepted table of mortality with interest assumption adopted by the insurer for that purpose if such standard is not lower than the American Men Ultimate Table of Mortality with interest assumption at three and one-half per cent per annum. (Enacted by Stats. 1935, Ch. 145.)
  122. 10486.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    Insurers must keep group insurance policies and mortality experience separate, and report specified group-insurance figures separately in the annual financial statement.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10486. All policies of group insurance shall be segregated by the insurer into a separate class and the mortality experience kept separate. The number of policies, amount of insurance, reserves, premiums and payments to policyholders thereunder, together with the mortality table and interest assumption adopted by the insurer, shall be reported separately in its annual financial statement. (Enacted by Stats. 1935, Ch. 145.)
  123. 10486.9.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An insurer may use a one-year preliminary term reserve basis for certain life, term, or endowment policies if the policy says the first year’s insurance is term insurance paid for by the first-year premium. For certain policies, reserves must also meet a minimum formula when the preliminary-term renewal premium is higher than the comparable 20-payment-life 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10486.9. (a) As prescribed in subdivision (b), an insurer may maintain reserves on a one year preliminary term basis on a life, term or endowment policy if by its terms such policy expressly provides that the first year’s insurance under such policy is term insurance purchased by part or the whole of the premium to be received during the first year. (b) If the actuarial net preliminary term renewal premium in the case of (1) insurance under a limited-payment life preliminary term policy providing for the payment of all premiums thereon within less than 20 years from the date thereof; or (2) endowment insurance under an endowment preliminary term policy, exceeds the actuarial net preliminary term renewal premium, calculated on the same table of mortality and rate of interest, for a 20-payment life policy, the reserve on such policy specified under (1) or (2) of this subdivision (b), as the case may be, at the end of any year, including the first, shall not be less than the sum of the reserve on a 20-payment life preliminary term policy issued at the same time on a life of the same age, and the actuarial net level premium reserve for a pure endowment maturing at the end of the premium payment period, equal to the excess of the full net level premium reserve, at the end of such premium payment period, on such policy specified under (1) or (2) of this subdivision (b), as the case may be, over the reserve, at the end of such premium payment period, of such 20-payment life preliminary term policy. The premium payment period herein referred to is 20 years or the period, if less, during which premiums are actually payable under such policy specified in (1) or (2) of this subdivision (b), as the case may be. (c) As used in this section, the term “20-payment life preliminary term policy” means a life insurance policy embodying all of the following attributes: (1) It is whole-life insurance; (2) The premium charged is payable annually or at lesser intervals until 20 annual premiums or a proportionately greater number of premiums payable at intervals less than one year shall have been paid, or until the prior death of the insured; (3) The first year’s insurance is term insurance purchased by the whole or part of the premium to be received during the first contract year. (Added by Stats. 1941, Ch. 277.)
  124. 10488.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An insurer may calculate reserves for covered policies and contracts using any standards that produce greater aggregate reserves than the article’s minimum reserves.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10488. Reserves for all policies and contracts to which this article applies may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by this article. (Added by Stats. 1943, Ch. 955.)
  125. 10489.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. )

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    An insurer may adopt a lower valuation standard only with the commissioner’s approval, and not below the minimum allowed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3. Valuation of Life Policies [10478 - 10489] ( Article 3 enacted by Stats. 1935, Ch. 145. ) ## 10489. Any insurer which at any time shall have adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided in this article or Article 3a of this chapter may, with the approval of the commissioner, adopt any lower standard of valuation, but not lower than the minimum therein provided. (Added by Stats. 1943, Ch. 955.)
  126. 10489.1.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section defines terms used in the Standard Valuation Law and says the article applies to certain policy and contract valuations, including rules tied to the valuation manual’s operative 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.1. (a) This article shall be known as the Standard Valuation Law. (b) For the purposes of this article, the following definitions shall apply: (1) “Accident and health insurance” means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual. (2) “Company” means an entity that (A) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one policy in force or on claim or (B) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state. (3) “Deposit-type contract” means contracts that do not incorporate mortality or morbidity risks and as may be specified in the valuation manual. (4) “Life insurance” means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. (5) “NAIC” means the National Association of Insurance Commissioners. (6) “Principle-based valuation” means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with Section 10489.97, as specified in the valuation manual. (7) “Valuation manual” means the manual of valuation instructions adopted by the NAIC as specified in this article or as subsequently amended. (c) For the purposes of this article, the following definitions shall apply on and after the operative date of the valuation manual: (1) “Appointed actuary” means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in subdivision (b) of Section 10489.15. (2) “Policyholder behavior” means any action a policyholder, contractholder, or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this article, including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract, but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract. (3) “Qualified actuary” means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing those statements and who meets the requirements specified in the valuation manual. (4) “Tail risk” means a risk that occurs either when the frequency of low probability events is higher than expected under a normal probability distribution or when there are observed events of very significant size or magnitude. (d) This article and Sections 10480, 10481, 10483, 10484, and 10486 shall apply (1) to the valuation of policies and contracts subject to this article issued on or after the operative date of the valuation manual and (2) as provided in Section 10489.3 as to the valuation of benefits purchased under group annuity and pure endowment contracts issued prior to that operative date. (Repealed and added by Stats. 2015, Ch. 658, Sec. 4. (SB 696) Effective January 1, 2016.)
  127. 10489.12.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    The commissioner must annually value reserves for certain life insurance and related contracts, and may use group methods or accept some foreign/alien company valuations in specified 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.12. (a) For policies and contracts issued prior to the operative date of the valuation manual, both of the following shall be satisfied: (1) The commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in this state issued prior to the operative date of the valuation manual. In calculating reserves, the commissioner may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves required of a foreign or alien company, the commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this article. (2) Sections 10489.2, 10489.3, 10489.4, 10489.5, 10489.6, 10489.7, 10489.8, 10489.9, 10489.93, and 10489.95 shall apply to all appropriate policies and contracts subject to this article and issued prior to the operative date of the valuation manual. Sections 10489.96 and 10489.97 shall not apply to any of those policies and contracts. (b) For policies and contracts issued on or after the operative date of the valuation manual, both of the following shall be satisfied: (1) The commissioner shall annually value, or cause to be valued, the reserves for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this article. (2) Sections 10489.96 and 10489.97 shall apply to all policies and contracts issued on or after the operative date of the valuation manual. (Added by Stats. 2015, Ch. 658, Sec. 5. (SB 696) Effective January 1, 2016.)
  128. 10489.15.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    Life insurers must file annual actuarial opinions, and related supporting memoranda, under the rules set by the commissioner or 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.15. (a) Each of the following shall apply to actuarial opinions submitted prior to the operative date of the valuation manual: (1) For an actuarial opinion, every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The commissioner shall define by regulation the specifics of this opinion and add any other items deemed to be necessary to its scope. (2) (A) For an actuarial analysis of reserves and assets supporting reserves, every life insurance company, except as exempted by regulation, shall also annually include in the opinion required by paragraph (1), an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company’s obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts. (B) The commissioner may provide by regulation for a transition period for establishing any higher reserves that the qualified actuary may deem necessary in order to render the opinion required by this section. (3) An opinion required by paragraphs (1) and (2) shall be governed by the following: (A) A memorandum, in form and substance acceptable to the commissioner as specified by regulation, shall be prepared to support each actuarial opinion. (B) If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified by regulation, or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner. (4) Every opinion required by this subdivision shall be governed by the following provisions: (A) The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after December 31, 1992. (B) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the commissioner as specified by regulation. (C) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on any additional standards as the commissioner may by regulation prescribe. (D) In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state. (E) For the purposes of this paragraph, “qualified actuary” means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in the regulation. (F) The qualified actuary shall be liable for the actuary’s negligence or other tortious conduct. (G) Disciplinary action by the commissioner against the company or the qualified actuary may be defined in regulations by the commissioner. (H) Except as provided in subparagraphs (L), (M), and (N), documents, materials, or other information in the possession or control of the Department of Insurance that are a memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the memorandum, shall be confidential by law and privileged, shall not be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use those documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s official duties. (I) The commissioner, any person who received documents, materials, or other information while acting under the authority of the commissioner, or any person with whom those documents, materials, or other information are shared pursuant to clause (i) of subparagraph (J), shall not be permitted or required to testify in any private civil action concerning those confidential documents, materials, or information subject to subparagraph (H). (J) In order to assist in the performance of the commissioner’s duties, the commissioner: (i) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subparagraph (H), with other state, federal, and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information. (ii) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information. (iii) Enter into agreements governing sharing and use of information consistent with subparagraphs (H) to (J), inclusive. (K) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure of the documents, materials, or information to the commissioner under this section or as a result of sharing as authorized in subparagraph (J). (L) A memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the memorandum, may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an action required by this section or by regulations promulgated pursuant to this section. (M) The memorandum or the other material may otherwise be released by the commissioner with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the commissioner for preserving the confidentiality of the memorandum or the other material. (N) Once any portion of the confidential memorandum is cited by the company in its marketing efforts or is cited before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall no longer be confidential. (b) Each of the following shall apply to actuarial opinions submitted after the operative date of the valuation manual: (1) For an actuarial opinion, every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to regulation by the commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The valuation manual shall prescribe the specifics of this opinion, including any items deemed to be necessary to its scope. (2) For an actuarial analysis of reserves and assets supporting reserves, every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to regulation by the commissioner, except as exempted in the valuation manual, shall also annually include in the opinion required by paragraph (1) an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, adequately provide for the company’s obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts. (3) Every opinion required by this subdivision shall be governed by both of the following provisions: (A) A memorandum, in form and substance as specified in the valuation manual, and acceptable to the commissioner, shall be prepared to support each actuarial opinion. (B) If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual, or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner. (4) Every opinion subject to this subdivision shall be governed by the following provisions: (A) The opinion shall be in form and substance as specified in the valuation manual and acceptable to the commissioner. (B) The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after the operative date of the valuation manual. (C) The opinion shall apply to all policies and contracts subject to paragraph (2), plus other actuarial liabilities as may be specified in the valuation manual. (D) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual. (E) If an opinion is required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state. (F) The qualified actuary shall be liable for the actuary’s negligence or other tortious conduct. (G) Disciplinary action by the commissioner against the company or the appointed actuary may be defined in regulations by the commissioner. (c) Nothing in this section shall be construed to limit the right of access to, or prohibit the admissibility as evidence in a private civil action of, any information, documents, data, or other materials not held for the purposes of this article by the commissioner or a person acting under the authority of the commissioner, including nondepartment actuaries and other consultants hired to implement this article, or a person with whom the commissioner has shared confidential information pursuant to clause (i) of subparagraph (J) of paragraph (4) of subdivision (a). (Amended by Stats. 2021, Ch. 615, Sec. 311. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  129. 10489.2.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section sets minimum valuation standards for certain life insurance and annuity contracts, including which interest rates and mortality tables may be used, with exceptions for other sections.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.2. For a computation of minimum standard, except as provided in Sections 10489.3, 10489.4, and 10489.95, the minimum standard for the valuation of policies and contracts issued prior to the effective date of the amendments to this section shall be that provided by the laws in effect immediately prior to that date. Except as otherwise provided in Sections 10489.3, 10489.4, and 10489.95, the minimum standard for the valuation of those policies and contracts shall be the commissioners reserve valuation methods defined in Sections 10489.5, 10489.6, 10489.9, and 10489.95, 31/2 percent per annum interest, or in the case of life insurance policies and contracts, other than certain annuity and pure endowment contracts, issued on or after January 1, 1970, 4 percent per annum interest for policies issued prior to January 1, 1980, 51/2 percent per annum interest may be used for single premium life insurance policies, and 41/2 percent per annum interest for all other policies issued on or after January 1, 1980, and the following tables: (a) For ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in those policies—the Commissioners 1941 Standard Ordinary Mortality Table for policies issued prior to the operative date of subdivision (a) of Section 10163.1, and the Commissioners 1958 Standard Ordinary Mortality Table for policies issued on or after the operative date of subdivision (a) of Section 10163.1, as amended by Chapter 940 of the Statutes of 1982, and prior to the operative date of Section 10163.2, as amended by Chapter 28 of the Statutes of 1997, provided that for any category of policies issued on female risks, all modified net premiums and present values referred to in this article may be calculated according to an age not more than six years younger than the actual age of the insured. For policies issued on or after the original operative date of Section 10163.2, as amended by Chapter 28 of the Statutes of 1997, the following apply: (1) The Commissioners 1980 Standard Ordinary Mortality Table. (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. (3) Any ordinary mortality table, adopted after 1980 by the NAIC, or its successor, that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for such policies. (b) For industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in the policies, the 1941 Standard Industrial Mortality Table for policies issued prior to the operative date of subdivision (b) of Section 10163.1, of the Standard Nonforfeiture Law for Life Insurance as amended, and for policies issued on or after the operative date the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for the policies. (c) For individual annuity and pure endowment contracts issued prior to the compliance date of Section 10489.3, excluding any disability and accidental death benefits in the policies: 1937 Standard Annuity Mortality Table or, at the option of the company, the Annuity Mortality Table for 1949, Ultimate, or any modification of these tables approved by the commissioner. However, the minimum standard for such contracts issued from January 1, 1968, through December 31, 1968, with commencement of benefits deferred not more than one year from date of issue, may be, at the option of the company, 4 percent per annum interest, and for contracts issued from January 1, 1969, to the compliance date of Section 10489.3, with commencement of benefits deferred not more than 10 years from the date of issue and with premiums payable in one sum may be, at the option of the company, 5 percent per annum interest. (d) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies: the Group Annuity Mortality Table for 1951, a modification of the table approved by the commissioner, or, at the option of the company, any of the tables or modifications of the tables specified for individual annuity and pure endowment contracts. However, the minimum standard for annuities and pure endowments purchased or to be purchased prior to the compliance date of Section 10489.3, under group annuity and pure endowment contracts with considerations received on or after January 1, 1968, through December 31, 1968, may be, at the option of the company, 4 percent per annum interest, and for annuities and pure endowments purchased or to be purchased prior to the compliance date of Section 10489.3, under group annuity and pure endowment contracts with considerations received from January 1, 1969, to the compliance date of Section 10489.3, may be at the option of the company, 5 percent per annum interest. (e) For total and permanent disability benefits in or supplementary to ordinary policies or contracts: for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates, adopted after 1980 by the NAIC that are approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for those policies; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either those tables or, at the option of the company, the Class (3) Disability Table (1926); and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies. (f) For accidental death benefits in or supplementary to policies issued on or after January 1, 1966: the 1959 Accidental Death Benefits Table or any accidental death benefits table, adopted after 1980 by the NAIC that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for those policies, for policies issued on or after January 1, 1961, and prior to January 1, 1966, either that table or, at the option of the company, the Inter-Company Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table for calculating the reserves for life insurance policies. (g) For group life insurance, life insurance issued on the substandard basis and other special benefits: tables approved by the commissioner. (h) The commissioner may by bulletin withdraw approval to use tables that have been replaced by newly adopted tables. (Amended by Stats. 2016, Ch. 86, Sec. 208. (SB 1171) Effective January 1, 2017.)
  130. 10489.3.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section sets the minimum valuation standards for certain annuity and pure endowment contracts and lets the commissioner withdraw approval of replaced tables by bulletin.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.3. (a) Except as provided in Section 10489.4, the minimum standard of valuation for individual annuity and pure endowment contracts issued on or after the operative date of this section and for annuities and pure endowments purchased on or after that operative date under group annuity and pure endowment contracts, shall be the commissioners reserve valuation methods defined in Sections 10489.5 and 10489.6 and the following tables and interest rates: (1) For individual annuity and pure endowment contracts issued prior to January 1, 1980, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table, or any modification of this table approved by the commissioner, and 6 percent per annum interest rate for all contracts with commencement of benefits deferred not more than 10 years from the date of issue and with premiums payable in one sum and 4 percent per annum interest for all other individual annuity and pure endowment contracts. (2) For individual single premium immediate annuity contracts issued on or after January 1, 1980, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for these contracts, or any modification of these tables approved by the commissioner, and 71/2 percent per annum interest. (3) For individual annuity and pure endowment contracts issued on or after January 1, 1980, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in those contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table, adopted after 1980 by the NAIC that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for those contracts, or any modification of these tables approved by the commissioner, and 51/2 percent per annum interest for single premium deferred annuity and pure endowment contracts, and 41/2 percent per annum interest for all other individual annuity and pure endowment contracts. (4) For annuities and pure endowments purchased prior to January 1, 1980, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under those contracts: the 1971 Group Annuity Mortality Table or any modification of this table approved by the commissioner, and 6 percent per annum interest. (5) For annuities and pure endowments purchased on or after January 1, 1980, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under those contracts: the 1971 Group Annuity Mortality Table, or any group annuity mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated or bulletin issued by the commissioner for use in determining the minimum standard of valuation for annuities and pure endowments, or any modification of these tables approved by the commissioner, and 71/2 percent interest. (6) All individual annuity and pure endowment contracts entered into prior to January 1, 1980, and all annuities and pure endowments purchased prior to January 1, 1980, under group annuity and pure endowment contracts shall remain subject to the provisions of Article 3A (commencing with Section 10489.1) as it existed prior to January 1, 1980. (b) The commissioner may, by bulletin, withdraw approval to use tables that have been replaced by newly adopted tables. (Amended by Stats. 2016, Ch. 86, Sec. 209. (SB 1171) Effective January 1, 2017.)
  131. 10489.4.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section sets valuation interest rates and formulas for certain life insurance, annuity, and guaranteed interest contracts, and it applies to fraternal benefit society certificates and 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.4. (a) The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this section: (1) Life insurance policies issued in a particular calendar year, on or after the operative date of Section 10163.2 as amended by Section 28 of the Statutes of 1997. (2) Individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1982. (3) Annuities and pure endowments purchased in a particular calendar year on or after January 1, 1982, under group annuity and pure endowment contracts. (4) The net increase, if any, in a particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts. (b) (1) The calendar year statutory valuation interest rates, expressed in the following formulas as “I,” shall be determined as follows and the results rounded to the nearest one-fourth of 1 percent: (A) For life insurance: I = .03 + W (R1– .03) + W/2 (R2– .09) Where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in this section, W is the weighting factor defined in this section. (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: I = .03 + W (R - .03) Where R is the reference interest rate defined in this section, W is the weighting factor defined in this section. (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subparagraph (B), the formula for life insurance stated in subparagraph (A) shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years and the formula for single premium immediate annuities stated in subparagraph (B) shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less. (D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subparagraph (B) shall apply. (E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subparagraph (B) shall apply. (2) However, if the calendar year statutory valuation interest rate for a life insurance policy issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of 1 percent, the calendar year statutory valuation interest rate for the life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 (using the reference interest rate defined in 1979) and shall be determined for each subsequent calendar year regardless of when Section 10163.2, as amended, becomes operative. (c) The weighting factors referred to in the formulas stated above are given in the following tables: (1) Weighting Factors for Life Insurance: Guarantee Duration (Years) Weighting Factors 10 or less ........................ .50 More than 10, but not more than 20 ........................ .45 More than 20 ........................ .35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both that are guaranteed in the original policy. (2) Weighting factors for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options shall be .80. (3) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in paragraph (2), shall be as specified in subparagraphs (A), (B), and (C), according to the rules and definitions in subparagraphs (D), (E), and (F): (A) For annuities and guaranteed interest contracts valued on an issue year basis: Guarantee Duration (Years)Weighting Factor for Plan TypeABC5 or less:.80.60.50More than 5, but not more than 10:.75.60.50More than 10, but not more than 20:.65.50.45More than 20:.45.35.35 (B) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in subparagraph (A) increased by: Plan TypeABC.15.25.05(C) For annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, that do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in subparagraph (A) or derived in subparagraph (B) increased by: Plan TypeABC.05.05.05(D) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence. (E) Plan type as used in the above tables is defined as follows: (i) For Plan Type A: At any time a policyholder may withdraw funds only (I) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, (II) without an adjustment but installments over five years or more, (III) as an immediate life annuity, or (IV) no withdrawal is permitted. (ii) For Plan Type B: Before expiration of the interest rate guarantee, a policyholder may withdraw funds only (I) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, (II) without an adjustment but in installments over five years or more, or (III) no withdrawal is permitted. At the end of the interest rate guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than five years. (iii) For Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either (I) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (II) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (F) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options shall be valued on an issue year basis. As used in this section, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund. (d) The reference interest rate referred to in subdivision (b) shall be defined as follows: (1) For life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc. (2) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc. (3) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision (b), with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc. (4) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (B) of paragraph (1) of subdivision (c), with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc. (5) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc. (6) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subparagraph (B) of paragraph (1) of subdivision (c), the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc. (e) If the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moody’s Investors Service, Inc., or in the event that the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moody’s Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate adopted by the NAIC and approved by regulation promulgated by the commissioner may be substituted. (f) This section shall apply to all certificates and contracts issued by a fraternal benefit society. (Repealed and added by Stats. 2015, Ch. 658, Sec. 10. (SB 696) Effective January 1, 2016.)
  132. 10489.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section sets how reserves are calculated for certain life insurance and endowment policies, using the commissioners reserve valuation method.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.5. (a) Except as otherwise provided in Sections 10489.6, 10489.9, and 10489.95, reserves according to the commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by those policies, over the then present value of any future modified net premiums therefor. The modified net premiums for a policy shall be the uniform percentage of the respective contract premiums for the benefits such that the present value, at the date of issue of the policy, of all modified net premiums shall be equal to the sum of the then present value of the benefits provided for by the policy and the excess of paragraph (1) over paragraph (2), as follows: (1) A net level annual premium equal to the present value, at the date of issue of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium shall not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of the policy. (2) A net one-year term premium for the benefits provided for in the first policy year. (b) For a life insurance policy issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and that provides an endowment benefit or a cash surrender value or a combination in an amount greater than the excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium shall, except as otherwise provided in Section 10489.9, be the greater of the reserve as of the policy anniversary calculated as described in subdivision (a) and the reserve as of the policy anniversary calculated as described in subdivision (a), but with (1) the value defined in paragraph (1) of subdivision (a) being reduced by 15 percent of the amount of the excess first year premium, (2) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (3) the policy being assumed to mature on that date as an endowment, and (4) the cash surrender value provided on that date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in Sections 10489.2 and 10489.4 shall be used. (c) Reserves according to the commissioners reserve valuation method shall be calculated by a method consistent with subdivisions (a) and (b) for paragraphs (1) to (4), inclusive. However, any extra premiums charged because of impairments or special hazards shall be disregarded in the determination of modified net premiums. (1) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums. (2) Group annuity and pure endowment contracts 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 pursuant to Section 408 of the Internal Revenue Code, as now or hereafter amended. (3) Disability and accidental death benefits in all policies and contracts. (4) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts. (Amended by Stats. 2015, Ch. 658, Sec. 11. (SB 696) Effective January 1, 2016.)
  133. 10489.6.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section sets how reserves must be calculated for certain annuity and pure endowment contracts, with an exception for specified group retirement and deferred compensation 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.6. (a) This section shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts 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 pursuant to Section 408 of the Internal Revenue Code, as now or hereafter amended. (b) Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by the contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of the contract, that become payable prior to the end of the respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in the contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values. (Amended by Stats. 2015, Ch. 658, Sec. 12. (SB 696) Effective January 1, 2016.)
  134. 10489.7.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    A life insurer must keep aggregate reserves at least as high as the amounts calculated under the listed sections and actuarial inputs, with disability and accidental death benefits excluded from one rule.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.7. (a) A company’s aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, shall not be less than the aggregate reserves calculated in accordance with the methods set forth in Sections 10489.5, 10489.6, 10489.9, and 10489.93 and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies. (b) The aggregate reserves for all policies, contracts, and benefits shall not be less than the aggregate reserves determined by the appointed actuary to be necessary to render the opinion required by Section 10489.15. (Amended by Stats. 2015, Ch. 658, Sec. 13. (SB 696) Effective January 1, 2016.)
  135. 10489.8.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    Companies may use higher reserve standards in some cases, but interest rates for most policies cannot exceed the corresponding nonforfeiture-benefit rates. A company may lower its valuation standard only with the commissioner’s approval and not below the minimum standard.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.8. (a) Reserves for any category of policies, contracts, or benefits established by the commissioner may be calculated, at the option of the company, according to any standards that produce greater aggregate reserves for the category than those calculated according to the minimum standard provided in this article, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts. (b) A company, which adopts at any time a standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided under this article, may adopt a lower standard of valuation with the approval of the commissioner, but not lower than the minimum provided in this article. However, for the purposes of this section, the holding of additional reserves previously determined by a qualified actuary to be necessary to render the opinion required by Section 10489.15 shall not be deemed to be the adoption of a higher standard of valuation. (Amended by Stats. 2015, Ch. 658, Sec. 14. (SB 696) Effective January 1, 2016.)
  136. 10489.9.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    Life insurers must calculate the minimum reserve using the greater of two reserve methods when the gross premium is below the valuation net premium, and special rules apply to certain policies 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.9. (a) If in any contract year the gross premium charged by any life insurer on any policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for such policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for such policy or contract, or the reserve calculated by the method actually used for such policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in Sections 10489.2, 10489.3, and 10489.4. (b) For a life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and that provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the foregoing provisions of this section shall be applied as if the method actually used in calculating the reserve for such policy were the method described in Section 10489.5, ignoring the second paragraph of Section 10489.5. The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with Section 10489.5, including the second paragraph of that section, and the minimum reserve calculated in accordance with this section. (Amended by Stats. 2015, Ch. 658, Sec. 15. (SB 696) Effective January 1, 2016.)
  137. 10489.93.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    For certain life insurance or annuity plans, the reserves must be set appropriately for the benefits and premium pattern, and the method must align with the Standard Valuation Law principles as set by commissioner regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.93. In the case of a 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 a plan of life insurance or annuity that is of a nature that the minimum reserves cannot be determined by the methods described in Sections 10489.5, 10489.6, and 10489.9, the reserves that are held under the plan shall: (a) Be appropriate in relation to the benefits and the pattern of premiums for that plan; and (b) Be computed by a method that is consistent with the principles of this Standard Valuation Law, as determined by regulations promulgated by the commissioner. (Amended by Stats. 2015, Ch. 658, Sec. 16. (SB 696) Effective January 1, 2016.)
  138. 10489.94.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    The commissioner may issue a bulletin and adopt regulations about mortality factors and valuation standards for certain life insurance 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.94. (a) The commissioner may issue a bulletin to provide tables of select mortality factors and rules for their use, rules concerning a minimum standard for the valuation of plans with nonlevel premiums of benefits, and rules concerning a minimum standard for the valuation of plans with secondary guarantees. The bulletin authorized by this subdivision shall have the same force and effect, and may be enforced by the commissioner to the same extent and degree, as regulations issued by the commissioner. The commissioner may also adopt regulations to implement this section. (b) It is the intent of the Legislature that the bulletin described in subdivision (a) and the superseding regulations shall contain the provisions of the NAIC Valuation of Life Insurance Policies Model Regulation Number 830. (Amended by Stats. 2015, Ch. 658, Sec. 17. (SB 696) Effective January 1, 2016.)
  139. 10489.95.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    For certain accident and health insurance contracts, the valuation manual sets the minimum valuation standard; for older disability and accident and health contracts, the commissioner’s regulation sets the minimum standard.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.95. For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subdivision (b) of Section 10489.12. For disability and accident and health insurance contracts issued prior to the operative date of the valuation manual, the minimum standard of valuation is the standard adopted by the commissioner by regulation. (Repealed and added by Stats. 2015, Ch. 658, Sec. 19. (SB 696) Effective January 1, 2016.)
  140. 10489.96.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    For covered life insurance policies, the valuation manual sets the minimum valuation standard unless an exception applies; the commissioner also has several certification, ordering, and enforcement duties and powers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.96. (a) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subdivision (b) of Section 10489.12, except as provided under subdivision (e) or (g). (b) (1) The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred: (A) The valuation manual has been adopted by the NAIC by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater. (B) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75 percent of the direct premiums written as reported in the following annual statements submitted for 2008: life, accident, and health annual statements, health annual statements, or fraternal annual statements. (C) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions: The 50 states of the United States, American Samoa, the United States Virgin Islands, the District of Columbia, Guam, and Puerto Rico. (2) Notwithstanding paragraph (1), the valuation manual shall not become operative until the commissioner certifies that adequate funding has been appropriated by the Legislature, and that all other necessary resources, including, but not limited to, adequate staff, are available and sufficient to enable the commissioner to carry out the duties required pursuant to Section 10489.992, and all other duties imposed on the commissioner pursuant to Senate Bill 696 of the 2015–16 Regular Session. The commissioner shall make that certification by submitting a letter to the Chairs of the Assembly Committee on Insurance and the Senate Committee on Insurance stating that the funding and other necessary resources are available and sufficient to carry out those duties. The commissioner shall post a notice on the department’s Internet Web site immediately after submitting that certification letter stating that the certification letter has been submitted and that the provisions of the valuation manual are in effect. (c) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when all of the following have occurred: (1) The change to the valuation manual has been adopted by the NAIC by an affirmative vote representing: (A) At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership. (B) Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available prior to the vote in subparagraph (A): life, accident, and health annual statement, health annual statements, or fraternal annual statements. (2) The commissioner has issued an order adopting the valuation manual with the changes. The commissioner shall issue the order only if he or she finds that the conditions set forth in paragraph (1) have been satisfied. (d) The valuation manual shall specify all of the following: (1) Minimum valuation standards for and definitions of the policies or contracts subject to subdivision (b) of Section 10489.12. Those minimum valuation standards shall be: (A) The commissioners reserve valuation method for life insurance contracts, other than annuity contracts, subject to subdivision (b) of Section 10489.12. (B) The commissioners annuity reserve valuation method for annuity contracts subject to subdivision (b) of Section 10489.12. (C) Minimum reserves for all other policies or contracts subject to subdivision (b) of Section 10489.12. (2) Which policies or contracts or types of policies or contracts are subject to the requirements of a principle-based valuation in subdivision (a) of Section 10489.97 and the minimum valuation standards consistent with those requirements. (3) For policies and contracts subject to a principle-based valuation under Section 10489.97: (A) Requirements for the format of reports to the commissioner under paragraph (3) of subdivision (b) of Section 10489.97, which shall include information necessary to determine if the valuation is appropriate and in compliance with this article. (B) Assumptions for risks over which the company does not have significant control or influence. (C) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of those procedures. (4) For policies not subject to a principle-based valuation under Section 10489.97, the minimum valuation standard that shall either: (A) Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual. (B) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring. (5) Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules, and internal controls. (6) The data and form of the data required pursuant to Section 10489.98, with whom the data is required to be submitted, and may specify other requirements including data analyses and reporting of analyses. (e) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with, or conflicts with, this code, then the company shall, with respect to those requirements, comply with the minimum valuation standards prescribed by the code or by the commissioner by regulation or bulletin. (f) The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company’s compliance with any requirement set forth in this article. The commissioner may rely upon the opinion, regarding the provisions contained within this article, of a qualified actuary engaged by the commissioner of another state, district, or territory of the United States. As used in this subdivision, the term “engage” includes employment and contracting. (g) The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or this article, and the company shall adjust the reserves as required by the commissioner. The commissioner may take other disciplinary action as permitted pursuant to all other applicable law. (Amended by Stats. 2016, Ch. 86, Sec. 210. (SB 1171) Effective January 1, 2017.)
  141. 10489.97.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    A company using principle-based valuation must set reserves under the valuation manual and keep related governance, certification, and reporting obligations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.97. (a) A company shall establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual: (1) Quantify the benefits, guarantees, and the funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For policies or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk. (2) Incorporate assumptions, risk analysis methods, and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the company’s overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods. (3) Incorporate assumptions that are derived in one of the following manners: (A) The assumption is prescribed in the valuation manual. (B) For assumptions that are not prescribed, the assumptions shall: (i) Be established utilizing the company’s available experience, to the extent it is relevant and statistically credible. (ii) To the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience. (4) Provide margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve. (b) A company using a principle-based valuation for one or more policies or contracts subject to this section as specified in the valuation manual shall do the following: (1) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual. (2) Provide to the commissioner and the board of directors of the company an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. The controls shall be designed to ensure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification shall be based on the controls in place as of the end of the preceding calendar year. (3) Develop, and file with the commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual. (c) A principle-based valuation may include a prescribed formulaic reserve component. (Added by Stats. 2015, Ch. 658, Sec. 21. (SB 696) Effective January 1, 2016.)
  142. 10489.98.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    A company must submit specified experience and other data as set out in 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.98. A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual. (Added by Stats. 2015, Ch. 658, Sec. 22. (SB 696) Effective January 1, 2016.)
  143. 10489.99.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section defines what counts as confidential information and restricts its disclosure, use, and testimony in private civil actions, while giving the commissioner limited sharing and use powers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.99. (a) For purposes of this section, “confidential information” means: (1) A memorandum in support of an opinion submitted pursuant to Section 10489.15 and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the commissioner or any other person in connection with the memorandum. (2) All documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the commissioner or any other person in the course of an examination made under subdivision (f) of Section 10489.96. However, if an examination report or other material prepared in connection with an examination made under Article 4 (commencing with Section 729) of Chapter 1 of Part 2 of Division 1 is not held as private and confidential information under that article, an examination report or other material prepared in connection with an examination made under subdivision (f) of Section 10489.96 shall not be “confidential information” to the same extent as if the examination report or other material had been prepared under Article 4 (commencing with Section 729) of Chapter 1 of Part 2 of Division 1. (3) Any reports, documents, materials, and other information developed by a company in support of, or in connection with, an annual certification by the company under paragraph (2) of subdivision (b) of Section 10489.97 evaluating the effectiveness of the company’s internal controls with respect to a principle-based valuation and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the commissioner or any other person in connection with those reports, documents, materials, and other information. (4) Any principle-based valuation report developed under paragraph (3) of subdivision (b) of Section 10489.97 and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the commissioner or any other person in connection with the report. (5) All of the following: (A) Any documents, materials, data, and other information submitted by a company pursuant to Section 10489.98, to be known collectively, as “experience data.” (B) Experience data plus any other documents, materials, data, and other information, including, but not limited to, all working papers, and copies thereof, created or produced in connection with the experience data, in each case that includes any potentially company-identifying or personally identifiable information, that is provided to or obtained by the commissioner, to be known, collectively, as “experience materials.” (C) Any other documents, materials, data, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the commissioner or any other person in connection with the experience materials. (b) (1) Except as provided in this section, a company’s confidential information shall be confidential by law and privileged, shall not be subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall not be subject to subpoena or discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the confidential information in a regulatory or legal action brought against the company as a part of the commissioner’s official duties. (2) The commissioner, any person who received confidential information while acting under the authority of the commissioner, or any person with whom those documents, materials, or other information are shared pursuant to paragraph (3), shall not be permitted or required to testify in a private civil action concerning any confidential information. (3) In order to assist in the performance of the commissioner’s duties, the commissioner may share confidential information with the following recipients, provided that the recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of the documents, materials, data, and other information in the same manner and to the same extent as required for the commissioner: (A) Other state, federal, and international regulatory agencies and with the NAIC and its affiliates and subsidiaries. (B) In the case of confidential information specified in paragraphs (1) and (4) of subdivision (a) of Section 10489.99 only, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal, and international law enforcement officials. (4) The commissioner may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions, and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information. (5) The commissioner may enter into agreements governing sharing and use of information consistent with this subdivision. (6) A waiver of any applicable privilege or claim of confidentiality in the information shall not occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in paragraph (3). (7) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subdivision shall be available and enforced in any proceeding in, and in any court of, this state. (8) For purposes of this section, “regulatory agency,” “law enforcement agency,” and the “NAIC” include, but are not limited to, their employees, agents, consultants, and contractors. (c) Notwithstanding subdivision (b), any confidential information specified in paragraphs (1) and (4) of subdivision (a): (1) May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under Section 10489.15 or principle-based valuation report developed under paragraph (3) of subdivision (b) of Section 10489.97 by reason of an action required by this article or by regulations promulgated pursuant to this article. (2) May otherwise be released by the commissioner with the written consent of the company. (3) Once any portion of a memorandum in support of an opinion submitted under Section 10489.15 or a principle-based valuation report developed pursuant to paragraph (3) of subdivision (b) of Section 10489.97 is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of the memorandum or report shall no longer be confidential. (d) This section shall not be construed to limit the right of access to, or prohibit the admissibility as evidence in a private civil action of, any information, documents, data, or other materials not held for the purposes of this article by the commissioner or a person acting under the authority of the commissioner, including nondepartment actuaries and other consultants hired to implement this article, or a person with whom the commissioner has shared confidential information pursuant to paragraph (3) of subdivision (b). (Amended by Stats. 2021, Ch. 615, Sec. 312. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  144. 10489.992.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. )

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    This section lets the commissioner hire staff and consultants, create an office head appointment, and assess covered companies annually to fund principle-based valuation work. It also requires notice and comment before finalizing assessment amounts, sets a minimum annual aggregate assessment of $1,000,000, and requires confidentiality and conflict-of-interest declarations from retained actuaries or consultants.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 3a. Standard Valuation Law [10489.1 - 10489.992] ( Article 3a repealed and added by Stats. 1981, Ch. 767, Sec. 13. ) ## 10489.992. (a) (1) The commissioner may hire and assign department staff, and retain nondepartment actuaries and other consultants, to assist the commissioner with preparing to implement and implementing, directly or indirectly, principle-based valuation. (2) There is in state government the Office of Principle-Based Reserving within the department. The commissioner may select, for the Governor’s appointment, a person to serve as the head of the office, who is an expert in preparing to implement and implementing, directly or indirectly, principle-based valuation. The position occupied by that person shall be an exempt gubernatorial appointment within the department exempt from the state civil service system within the meaning of Section 4 of Article VII of the California Constitution. The person’s salary or compensation shall be fixed by the commissioner and effective and payable without approval of the Department of Human Resources, pursuant to Section 19825 of the Government Code. (b) (1) Notwithstanding any other law, the commissioner may annually assess all companies that are subject to this article to defray costs the department incurs preparing to implement and implementing, directly or indirectly, principle-based valuation, including, but not limited to, department salaries and overhead, and actuary and consultant fees and expenses. (2) The commissioner shall annually set an “aggregate assessment amount” and an assessment amount for each tier listed in paragraph (4). The aggregate assessment amount shall be the amount necessary to provide sufficient moneys to carry out the projected workload to implement, directly or indirectly, principle-based valuation. The annual aggregate assessment amount shall be no less than one million dollars ($1,000,000). (3) At least 90 days before finalizing the annual aggregate assessment amount and assessment amount for the tiers listed in paragraph (4), the commissioner shall provide notice of the commissioner’s preliminary determination of those amounts. The notice shall explain how the commissioner derived the amounts and provide no less than 45 days for interested parties to provide comments. (4) Not less than 45 days after the due date for comments specified in paragraph (3), the commissioner shall by bulletin establish the annual aggregate assessment amount according to the company’s annual premium based on the below tiers. For purposes of this section, “annual premium” shall mean the gross annual life insurance premium written by a company in California during the immediately preceding year as reported in its annual statutory financial statement. The commissioner may adjust the initial assessment amount for each tier to ensure a sufficient annual aggregate assessment amount as defined in paragraph (2) if he or she adopts a change to the valuation manual pursuant to paragraph (2) of subdivision (c) of Section 10489.96 that warrants the adjustment, and provides an accounting explaining the need for the adjustment.Annual Premium Initial Annual Assessment Per Company $500,000,001 + $75,000 $50,000 $400,000,001 - $500,000,000 $300,000,001 - $400,000,000 $40,000 $200,000,001 - $300,000,000 $30,000 $150,000,001 - $200,000,000 $20,000 $100,000,001 - $150,000,000 $10,000 $50,000,001 - $100,000,000 $5,000 (5) All examinations and analyses of reserves and principle-based valuation methodologies performed pursuant to Section 730 may be at the expense of the company, organization, or person examined, pursuant to Section 736. (c) Before retaining an independent actuary or consultant under paragraph (1) of subdivision (a), the commissioner shall require a written declaration by the actuary or consultant that: (1) The actuary shall not disclose to another party, other than the department, and shall protect from unauthorized use, any confidential information, as defined in Section 10489.99, obtained in the course of his or her work for the commissioner, unless authorized to do so by the commissioner or required by law. (2) The actuary or consultant shall not disclose to another party and shall protect from unauthorized use, all confidential information obtained from the department in the course of his or her work for the commissioner. (d) Before retaining an independent actuary or consultant under paragraph (1) of subdivision (a), the commissioner shall require a written declaration by the actuary or consultant that: (1) The actuary or consultant will not perform professional services involving an actual or potential conflict of interest unless all of the following are satisfied: (A) The actuary’s or consultant’s ability to perform the services fairly is unimpaired. (B) There has been disclosure of the conflict to all present, or known prospective, clients or employers of the actuary or consultant whose interests would be affected by the conflict. (C) All present, or known prospective, clients or employers of the actuary or consultant have expressly agreed to the performance of the services by the actuary or consultant. (2) The actuary or actuarial firm with which the actuary is affiliated was not involved in developing the reserves or principle-based valuation methodology under consideration by the actuary. (3) The actuary or consultant has disclosed any financial interest in the companies whose reserves or principle-based valuation methodologies may be affected by the actuary’s or consultant’s services. (e) The commissioner may develop and amend regulations to implement or modify subdivisions (c) and (d). The initial adoption of the regulations shall be deemed to be an emergency and necessary in order to address a situation calling for immediate action to avoid serious harm to the public peace, health, safety, or general welfare. Any emergency regulation adopted or amended by the commissioner pursuant to this section shall be adopted or amended in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code and shall remain in effect for 180 days. (Added by Stats. 2015, Ch. 658, Sec. 24. (SB 696) Effective January 1, 2016.)
  145. 1049.

    ## 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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    Each policyholder gets one vote on the mutualization plan. The plan is approved or rejected by a majority of voting policyholders, and if rejected the commissioner must certify that rejection and may continue further proceedings.

    ## 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. ) ## 1049. Each policyholder of such insurer shall be entitled to one vote, regardless of the amount for which, or the number of policies under which, he is insured. Such mutualization plan shall be deemed approved by the said policyholders if a majority of the policyholders voting for and against it shall have approved it, and shall be deemed rejected if a majority of the policyholders voting for and against it shall have rejected it. In the event that said plan of mutualization is rejected by the policyholders of such insurer, the commissioner shall certify the fact of such rejection to said court, whereupon he may proceed further as hereinbefore provided in this article. (Amended by Stats. 1935, Ch. 291.)
  146. 10490.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    This article applies only to life and disability insurance, and most persons may not transact that business in the state unless an exception, exemption, or required certificate applies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10490. This article is applicable only to life and disability insurance. Except as otherwise expressly permitted by this code or when transacted pursuant to or expressly exempted by this article, life or disability insurance shall not be transacted in this State by any person other than a corporation. A person shall not transact life or disability insurance in this State except pursuant to a valid and unrevoked certificate of authority issued by the commissioner or, after registration with the commissioner, under a valid and unrevoked certificate of exemption issued by the commissioner pursuant to this article. Any person subject to or exempted from Chapter 10 of this part is also exempted from this article. (Amended by Stats. 1943, Ch. 957.)
  147. 10490.1.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    Certain nonprofit mutual benefit associations are exempt from this code’s life and disability insurance provisions for covered members and their dependents if they meet the stated membership and benefit limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10490.1. Any nonprofit incorporated or unincorporated mutual benefit association in existence prior to January 1, 1945, which confines its membership to officers and employees of a common employer or group of affiliated or related employers including persons who were such officers or employees at the time of becoming members and which pays death benefits only to nominees or the estates of deceased members, or pays disability benefits in amounts not exceeding (except in the case of unemployment compensation disability benefits under the provisions of the Unemployment Insurance Act) one thousand five hundred dollars ($1,500) in the aggregate in any one calendar year on account of the disability of any one person, or which pays both such benefits is exempt from the provisions of this code relating to such life insurance in respect to such members and to such disability insurance in respect to such members and their dependents. (Amended by Stats. 1949, Ch. 1392.)
  148. 10490.2.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    A qualifying association may get a certificate of exemption from the commissioner, and then must follow the listed requirements and limits.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10490.2. If an association described in Section 10490.1 has operated pursuant thereto since January 1, 1945, it may procure a certificate of exemption from the commissioner upon meeting all of the requirements of this article relating thereto except those of Section 10494. Thereafter such association shall be subject to: (a) All of the requirements of this article relating to an association holding a certificate of exemption except Section 10494, and (b) The limitations of Section 10490.1, except that it may pay disability benefits in amounts not exceeding three thousand six hundred dollars ($3,600) in the aggregate in any one calendar year on account of the disability of any one person. (Added by Stats. 1953, Ch. 1356.)
  149. 10491.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    People with a valid, unrevoked certificate of authority from the commissioner are exempt from 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10491. Persons possessing a valid and unrevoked certificate of authority to transact life or disability or life and disability insurance issued by the commissioner are not subject to this article. (Repealed and added by Stats. 1941, Ch. 1060.)
  150. 10492.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

    Verify source ↗

    Certain benefit and relief associations may get a certificate of exemption from the commissioner if they meet specified 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10492. Any incorporated or unincorporated benefit and relief association organized on or after January 15, 1951, of either nonprofit or charitable character may, if it complies with the requirements of Section 10493 (c) (1), (2), (3), or (6) and the other requirements of this article, procure a certificate of exemption from the commissioner. (Amended by Stats. 1951, Ch. 569.)
  151. 10493.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

    Verify source ↗

    A qualifying benefit and relief association may get a certificate of exemption from the commissioner if it meets the listed conditions and pays the filing fee.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10493. An incorporated or unincorporated benefit and relief association organized before January 15, 1951, may procure a certificate of exemption from the commissioner if it complies with all of the following: (a) All of the other requirements of this article. (b) As respects life or disability or life and disability insurance transacted by it, it is of an entirely nonprofit nature. (c) Any one of the following requirements as to membership and purpose: (1) It is composed of and its membership limited to the appointive officers, employees, and pupils of a public school district or of the appointive officers, employees, and pupils of any private school. (2) It is composed of and its membership limited to the appointive officers and employees of a municipal playground system, or the systems of two or more municipalities united in a league, federation, or other association for the purpose of promoting intercity competitions or other activities, or the participants in dancing, recreational, sporting, educational, social or theatrical activities sponsored or directed by that system or systems and carried on through the use of any of the facilities of that system or systems. (3) Its membership in this state is 1,000 or more and it is either an organization of a purely religious or benevolent character or its membership is limited to the members of that organization. (4) It is composed of and its membership is limited to the members of another organization and that other organization is of a purely religious or benevolent character and has a total membership in this state of not less than 1,000. (5) It is a domestic organization, lodge, society, or order that before September 19, 1947, provided life or disability benefits or both of those benefits to its members and is both of the following: (A) It is of a charitable, benevolent, or beneficent character or becomes so within one year from September 4, 1951, and in both instances is thereafter of that character. (B) It operates in a manner so that the payment of the benefits even though it be one of the express purposes of that organization, lodge, or order, is as a matter of fact incidental to its charitable, benevolent, or beneficent purposes or within one year from September 4, 1951, operates in that manner and in both instances thereafter operates in that manner. (6) Officers and employees of a common employer, and related dependents of those officers and employees, comprising spouses and dependent children who are not married or in registered domestic partnerships and are under 19 years of age, and living in the same household. (d) Pays a filing fee in the amount of one thousand six hundred ninety-three dollars ($1,693). (Amended by Stats. 2018, Ch. 92, Sec. 157. (SB 1289) Effective January 1, 2019.)
  152. 10494.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    A benefit and relief association may not exceed stated benefit caps and may not issue benefit documents except those in its articles or bylaws.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10494. Such a benefit and relief association shall not provide for payment of a death benefit of more than two thousand dollars ($2,000) or for disability benefits of more than five hundred dollars ($500) to any one person in any one period of 12 consecutive months and shall not issue to its members a policy or benefit certificate or any other evidence of benefits except that found in the articles of the association or the bylaws thereof. However, a benefit and relief association described in paragraph (1) of subdivision (c) of Section 10493 may provide for a death benefit up to two thousand dollars ($2,000), disability benefits up to one thousand dollars ($1,000) or insurance protection for medical and hospital expenses up to one thousand five hundred dollars ($1,500), or any combination or all thereof. (Amended by Stats. 1992, Ch. 368, Sec. 3. Effective January 1, 1993.)
  153. 10494.2.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    A qualifying religious benefit and relief association may get a certificate of exemption from the commissioner if its death and disability benefits do not exceed $2,000 in any 12-month period and it follows the article’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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10494.2. Any incorporated or unincorporated benefit and relief association, the membership and insurance in which are restricted to the ministers, priests, rabbis, rectors, vicars, pastors, or readers of any conference, presbytery, diocese, convention or synod or any other similar body of a religious organization (a portion of whose territory is located in the State of California) and the employees of such religious body may procure a certificate of exemption from the commissioner if it does not provide for a death benefit (life and/or accidental death insurance) greater than two thousand dollars ($2,000) or a disability benefit greater than two thousand dollars ($2,000), payable in any 12-month period; provided it complies with all applicable provisions of this article. (Added by Stats. 1961, Ch. 1117.)
  154. 10494.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    An employer that pays at least 50% of the cost of a qualifying disability insurance benefits plan may apply for a certificate of exemption from 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10494.5. Any employer maintaining a plan for furnishing disability insurance benefits to his employees for nonindustrial and nonoccupational injuries or sickness, under which plan the employer defrays 50 percent or more of the expense of such benefits, may secure a certificate of exemption from the commissioner under this article if such employer in respect to such plan otherwise complies with and is subject to the requirements of this article. Such compliance with this article need be only with respect to such plan and not in respect to other business of the employer. (Added by Stats. 1943, Ch. 957.)
  155. 10494.6.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    An eligible employer may offer a supplemental disability plan for certain dependents, but only if the plan meets listed conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10494.6. Any employer who qualifies for a certificate of exemption under Section 10494.5 by virtue of which certificate he or she maintains a plan for furnishing disability benefits to his or her employees may, if he or she elects, make available for the related dependents of his or her employees, comprising spouses and dependent children who are not married or in registered domestic partnerships living in the same household, a supplemental plan of disability benefits containing any or all of the following benefits, hospital, surgical and medical; provided, that as to the supplemental plan the Insurance Commissioner finds that all of the following exist: (a) The supplemental plan shall be separately stated, setting out all of the provisions of coverage. (b) The plan shall set out the respective contributions of the employer and employees. All contributions of employees received or retained by the employer shall be trust funds and shall be separately accounted for by the employer and may not inure to the benefit of the employer in any manner whatsoever. (c) The plan permits the disabled individual a free choice of physician and surgeon, or podiatrist in the case of those services that are within the scope of practice of podiatric medicine, as defined in Section 2472 of the Business and Professions Code, and hospital. (d) The employer agrees to assume 50 percent of the cost of maintaining the plan, and he or she further agrees to guarantee the benefits if the contributions required for the supplementary benefits are not sufficient to pay the cost of same. The funds necessary to discharge the employer’s 50 percent assumption shall be trust funds and shall be separately accounted for by him or her. (Amended by Stats. 2016, Ch. 50, Sec. 61. (SB 1005) Effective January 1, 2017.)
  156. 10494.7.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    The commissioner may make additional reasonable regulations, and employers offering the supplemental plan must post security with the commissioner in an amount equal to the greatest of several listed measures.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10494.7. With respect to the supplemental plan described in Section 10494.6, the commissioner may, in addition to the regulations permitted by Section 10498.6, promulgate other reasonable regulations covering all matters set forth in Section 10494.6 and this section. The commissioner shall require each employer making available such supplemental plan to post with him security in the form of a bond of an admitted surety insurer conditioned on the payment by the employer of his obligations under the entire plan or of deposits with the commissioner of securities approved by him to secure the payment of such obligations. Such security shall be equal to the greater of (a) twenty-five thousand dollars ($25,000), (b) the estimated contributions of the employees under the entire plan for the ensuing year, (c) the contributions paid by the employees under the entire plan during the preceding year, or (d) one-half of all of the amounts of benefit either paid or incurred by the employer under the entire plan during the preceding year. If, on examination or investigation of any plan which includes benefits for dependents, the commissioner finds that the aggregate of the trust funds separately held for the supplemental plan and the security in the form hereinabove described may not, in his judgment, be adequate to guarantee the payment of outstanding and incurred liabilities of the entire plan, he may require the employer to post such additional security as will, in his judgment, be adequate to guarantee the payment of all outstanding and incurred liabilities of the entire plan, and, if the employer fails to post such additional security, he may revoke the employer’s certificate of exemption. (Added by Stats. 1953, Ch. 1811.)
  157. 10495.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    An applicant may obtain a certificate of exemption by filing required corporate and operational documents with the commissioner, and must also file a financial statement. The commissioner may also require information from any person transacting life or disability 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10495. A certificate of exemption may be procured from the commissioner by filing with him or her certified copies of the articles of incorporation, association, bylaws, rules and regulations, or other organization or governing documents of the applicant together with certified copies of any evidences of insurance which it may issue and a statement of the operations of the applicant. There shall also be filed with the application a statement of the financial condition and income and disbursement exhibit of the applicant in such form as the commissioner may, in his or her discretion, find necessary in order to determine whether the applicant complies with the applicable requirements of this article. The commissioner may, pursuant to Article 4 (commencing with Section 730) of Chapter 1 of Part 2 of Division 1, require from any person transacting life or disability insurance, whether or not an applicant for a certificate of exemption, such information as will enable him or her to determine whether or not the person is transacting life or disability insurance in conformity with or in violation of this code. (Amended by Stats. 1982, Ch. 454, Sec. 107.)
  158. 10496.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    A person selling life or disability insurance without a commissioner-issued certificate of authority must not give, allow, or promise compensation for recruiting new members.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10496. Any person transacting life or disability insurance without a certificate of authority so to do issued by the commissioner shall not give, allow, or promise to give or allow any compensation for procuring new members. “Compensation”, as used herein, is confined to a payment, percentage, bonus, or monetary credit given, promised, or allowed for the securing of new members which, directly or by any arrangement, understanding, or device, is based, in whole or in part, upon the number of new members or reinstatements procured, or the nominal or contingent value of their certificates or policies, or the net or gross amount of dues or premiums paid or payable by them or upon any other variable result or contingency. (Amended by Stats. 1982, Ch. 454, Sec. 108.)
  159. 10497.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    If the commissioner finds the applicant meets the article and code requirements and is not organized or operated for profit, the commissioner must register the applicant and issue a certificate of exemption.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10497. If the commissioner finds that an applicant for a certificate of exemption meets the applicable requirements of this article and those requirements of this code, made applicable to such an applicant by this article, and that the applicant is not formed, conducted or operated for profit or as a commercial insurance enterprise for the benefit of any group or person rather than the relatively equal benefit of its members, he shall register the applicant and issue to it a certificate of exemption. (Amended by Stats. 1943, Ch. 957.)
  160. 10498.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    Applicants for a certificate of exemption must follow the listed code provisions, and certificate holders are subject to them too.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10498. An applicant for a certificate of exemption must comply with, and the possessor of a certificate of exemption is subject to, the following provisions of this code: Sections 1 to 41, inclusive; Chapter 1, Part 1, Division 1; Chapter 2, Part 1, Division 1; Article 1, Chapter 6, Part 1, Division 1; Article 3, Chapter 6, Part 1, Division 1; Chapter 9, Part 1, Division 1; Sections 10110, 10111, 10112 and 10114; Article 4, Chapter 1, Part 2, Division 1; Article 6, Chapter 1, Part 2, Division 1; Article 8, Chapter 1, Part 2, Division 1; Article 9, Chapter 1, Part 2, Division 1; Article 14, Chapter 1, Part 2, Division 1; Article 15, Chapter 1, Part 2, Division 1; Article 17, Chapter 1, Part 2, Division 1; Article 1, Chapter 2, Part 2, Division 1; Article 2, Chapter 2, Part 2, Division 1; Article 3, Chapter 2, Part 2, Division 1; Article 4, Chapter 2, Part 2, Division 1; Article 7, Chapter 2, Part 2, Division 1; Article 2, Chapter 1, Part 2, Division 2; Article 4, Chapter 1, Part 2, Division 2; Article 5, Chapter 1, Part 2, Division 2; Section 10270.98; Chapter 3, Part 2, Division 2; Article 1, Chapter 5, Part 2, Division 2; Division 3. Applicants for and possessors of certificates of exemption not organized or incorporated under the laws of this State in lieu of meeting the requirements of Article 7, Chapter 2, Part 2, Division 1, and Articles 1, 2, 4, 5, Chapter 1, Part 2, Division 2, shall conform to such reasonable investment standards as the commissioner prescribes. (Amended by Stats. 1982, Ch. 1066, Sec. 2.)
  161. 10498.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    A certificate-of-exemption holder must keep benefit funds separate from other funds, and those segregated funds are generally protected from creditor enforcement except for claims for 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10498.5. If a holder of a certificate of exemption receives or maintains funds for any purpose other than administering and providing the benefits that make it subject to this article, it shall segregate and maintain separately all funds received by it for the purpose of administering and providing such benefits. When so segregated and maintained separately such benefit funds are not subject to enforcement of a money judgment or other process by or on behalf of creditors of the holder of a certificate of exemption, except that such funds are subject to enforcement of a claim for benefits. (Amended by Stats. 1982, Ch. 497, Sec. 128. Operative July 1, 1983, by Sec. 185 of Ch. 497.)
  162. 10498.6.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    The commissioner may issue regulations for persons holding certificates of exemption under 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10498.6. The commissioner may from time to time issue regulations which shall govern persons holding certificates of exemption under this article, setting forth financial and other standards which, in his opinion, are required to avoid a condition of hazard, and further specifying the requirements of submission of statements of financial condition. (Added by Stats. 1945, Ch. 1374.)
  163. 10499.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    The commissioner may notify a person with a certificate of exemption of alleged violations, set a hearing, and revoke the certificate if violations are found.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10499. The commissioner may at any time notify any person possessing a certificate of exemption that the commissioner has grounds to believe that it is violating any of the applicable provisions of this code or is not operating in strict conformity with the documents filed with the commissioner as a basis of its application for the certificate of exemption. The notice shall fix the time and place for hearing at which the person notified may appear and show cause why the commissioner should not revoke its certificate of exemption. The time fixed shall not be less than 15 nor more than 60 days after date of the notice. At the time and place specified in the notice and order to show cause, the commissioner shall hold a hearing at which the possessor of a certificate of exemption may present evidence to show that it is not violating any applicable provision of this code, and that it is operating in conformity with the documents which were filed as a basis for the certificate of exemption. If after the hearing the commissioner finds the evidence shows that the operations of the person are in violation of any of the applicable provisions of this code, or are in violation of the documents upon which its application for certificate of exemption was based, the commissioner shall revoke the certificate of exemption and the person whose certificate of exemption is thus revoked shall cease the transaction of life and disability insurance until it procures a new certificate of exemption or a certificate of authority under other provisions of this code. This article does not prevent the commissioner from acting and bringing proceedings under Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1, if grounds exist for the institution of such proceedings with respect to any person transacting life or disability insurance either with or without a certificate of exemption. (Amended by Stats. 1983, Ch. 142, Sec. 86.)
  164. 105.

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

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    This section defines what counts as surety insurance and says insurance writers may not write it if it is financial guaranty insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 105. Surety insurance includes: (a) The guaranteeing of behavior of persons and the guaranteeing of performance of contracts (including executing or guaranteeing bonds and undertakings required or permitted in all actions or proceedings or by law allowed), other than insurance policies and other than for payments secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate. (b) Insurance against loss resulting from the forgery or alteration of any instrument of any kind or character or of any signature thereon. Nothing in this section shall be deemed to limit any of the powers of title insurers. (c) Any of the following insurance when included as a part of contract containing any such guarantee of behavior or performance or in a contract indemnifying any bank, banker, broker, financial or moneyed corporation or association, any state, political subdivision, public or municipal corporation, or any officer of any state, political subdivision, public or municipal corporation: Insurance indemnifying the insured named therein against loss or destruction from any cause of any evidences of debt of any kind or character, evidences of ownership of any kind or character, deeds, mortgages, warehouse receipts, bills of lading, certificates of stock, bonds, notes, drafts, checks, instruments of similar character, stamps, documents, money, precious metals of any kind or character, refined or unrefined, and articles made therefrom, jewelry, watches, necklaces, bracelets, gems and precious and semiprecious stones, and also against loss or damage, except by fire, to the insured’s premises, furnishings, fixtures, equipment, safes and vaults therein caused by burglary, robbery, holdup, theft or larceny or attempt thereat. No such insurance indemnifying against loss of any property as specified herein shall indemnify against loss of any such property occurring while in the mail or in the exclusive custody or possession of a common carrier for the purpose of transportation, except for the purpose of transportation by an armored motor vehicle. (d) No insurance may be written as surety insurance if it falls within the definition of financial guaranty insurance as set forth in Section 12100. (Amended by Stats. 1990, Ch. 1032, Sec. 1.)
  165. 1050.

    ## 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 policyholders approve a mutualization plan, the commissioner must certify that approval to the court, the court must order notice to shareholders, and shareholders get a 30-to-60-day window to seek disapproval, modification, or appraisal relief.

    ## 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. ) ## 1050. In the event that said plan of mutualization is approved by said policyholders, the commissioner shall certify to the said court the fact of such approval and the number of votes cast for and against such mutualization plan. Said court shall thereupon issue its order directing the commissioner to give notice, as provided in said mutualization plan or as the court may otherwise prescribe, to the shareholders of such insurer of the approval of said mutualization plan by said policyholders. Said order shall direct the commissioner to transmit to each such shareholder by mail addressed to his address as it appears upon the records of such insurer, a true copy of said order and of said mutualization plan approved by said policyholders, and shall fix a time, not less than thirty nor more than sixty days from the date of such order, within which any such shareholder may file with said court a petition for the disapproval of said mutualization plan or for its modification in such manner as shall be set forth in such petition, and within which any such shareholder and the commissioner may file with said court a petition for the appointment of one or more appraisers to appraise the value of the then outstanding shares of capital stock of such insurer. (Amended by Stats. 1935, Ch. 291.)
  166. 10500.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    A person who is not expressly exempted and sells life or disability insurance without the required valid certificate, and any employee, officer, or agent who knowingly helps such an unlawful transaction, commits a misdemeanor.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10500. Every person not expressly exempted by the provisions of this code that transacts life or disability insurance without a valid and unrevoked certificate of authority or without a valid and unrevoked certificate of exemption issued pursuant to this article is guilty of a misdemeanor. Every employee, officer, or agent of any person who knowingly assists any person in the transaction of insurance in violation of the provisions of this code, is guilty of a misdemeanor. (Amended by Stats. 1983, Ch. 142, Sec. 87.)
  167. 10501.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    Certain persons subject to this article may apply for a certificate of exemption, and after filing the application they may keep transacting the insurance until the application is denied or the certificate is issued.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10501. Any person subject to this article who upon January 1, 1943, was paying, allowing, or promising to pay benefits in the event of death or disability, or otherwise transacting life or disability insurance without a valid and unrevoked certificate of authority so to do, may apply for a certificate of exemption under this article. After filing such application, or if such application has heretofore been filed, such person may continue to transact such insurance until the application is denied or such certificate of exemption is issued. (Amended by Stats. 1945, Ch. 1374.)
  168. 10505.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    Certain labor unions, and related incorporated organizations, are exempt from specified life, disability, and wage-loss insurance provisions if they meet the listed conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10505. (a) A labor union having all of the following characteristics is exempt from the provisions of this code relating to life and disability insurance in respect to the benefits herein specified and transactions connected therewith: (1) It is organized for the purpose of collective bargaining concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work and for the mutual benefit of its members and not for profit. (2) Either (A) it does not issue policies but provides for payment of those benefits in its bylaws, constitution, or rules and regulations; or (B) it is composed of members of one craft or industry or allied craft or industries. (3) The payment of those benefits is incidental to the purposes of that union. (b) Any incorporated organization, the membership and insurance in which are restricted to members of that labor union and the officers of which are members of the labor union, is likewise exempt from this code to the same extent as that labor union. (c) Any organization described in either subdivision (a) or (b) is also exempt from all provisions of this code relating to insurance protecting against wage losses from any cause in respect to the benefits promised. (Amended by Stats. 1988, Ch. 582, Sec. 1.)
  169. 10505.1.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. )

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    Certain nonprofit cooperative assessment associations tied to labor unions are exempt from insurance regulation for job protection benefits, but policies must carry a specified notice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 4. Qualifications and Exemptions [10490 - 10505.1] ( Article 4 repealed and added by Stats. 1941, Ch. 1060. ) ## 10505.1. (a) (1) Any nonprofit cooperative assessment association, the membership and insurance in which are restricted to members of a labor union, is exempt from the provisions of this code relating to the supervision or regulation of insurance with respect to the provision of job protection benefits, including any accidental death benefits, to its members. A nonprofit cooperative assessment association established pursuant to this section is not, and shall not be, a member of the California Insurance Guarantee Association under Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1, or any other insurance guaranty association in this state. (2) Each policy issued in this state pursuant to this section shall contain, in at least 10-point typeface on the front page and the declaration page, the following notice: “NOTICE This policy is issued by a nonprofit cooperative assessment association that is not subject to CALIFORNIA insurance laws and regulation and is not admitted in California. California insurance guaranty funds are not available for your nonprofit cooperative assessment association.” (b) “Job protection insurance” means the business of providing indemnity to conductors, engineers, motormen, brakemen, switchmen, firemen, dispatchers, clerks, operators, trackmen, signalmen, and maintenance of way personnel of steam and electric railways and to busdrivers and truckdrivers employed by common carriers for loss of position arising from discharge or suspension, which indemnity is payable in installments that do not exceed the average monthly wage of the insured. “Job protection insurance” may include accidental death coverage insuring the member. Nothing in this section is intended to regulate or define any benefit delivery system which provides indemnity, as defined in this section, in any manner other than the sale of insurance. Labor unions providing the type of indemnity defined in this section, shall be expressly exempt from any regulation by any state agency. (Amended by Stats. 2014, Ch. 362, Sec. 5. (AB 2734) Effective January 1, 2015.)
  170. 10506.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. )

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    This section lets domestic life insurers use separate accounts for certain pension, retirement, profit-sharing, and variable life insurance funds, but it also sets investment, transfer, disclosure, and capital 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. ) ## 10506. (a) Any domestic life insurance company may, after adoption of a resolution by its board of directors, allocate to one or more separate accounts, in accordance with the terms of a written agreement, any amounts which are paid to the company in connection with a pension, retirement, retirement medical benefits, or profit-sharing plan, or program for one or more persons, or with an individual or group variable life insurance policy, and which are to be, or may be, applied in payment or in making provision for payment of proceeds or benefits under the company’s policies, contracts, or agreements of retirement benefits, and other benefits incidental thereto, in fixed or variable dollar amounts, or both. The income, if any, and gains or losses, realized or unrealized, on each account shall be credited to or charged against the amount allocated to the account in accordance with the agreement, without regard to the other income, gains or losses of the company. The amounts allocated to the accounts and accumulations thereon, by any life insurance company shall be invested and reinvested as specified in the policy, contract, or agreement without regard to any requirements or limitations prescribed by the laws of this state governing the investments of insurance companies, provided that the amounts allocated to separate accounts for which the insurer has issued guarantees of benefits as to dollar amount and duration or of funds as to all or part of the principal amount thereof or stated rate of interest, and the accumulations thereon pursuant to Section 10506.4, shall be invested in the types of investments permitted to life insurance companies for investments held in the insurer’s general account as described in Article 3 (commencing with Section 1170), Article 4 (commencing with Section 1190), and Article 4.6 (commencing with Section 1211) of Chapter 2 of Part 2 of Division 1 (excluding Section 1212 thereof), except that the approved method of operations and applicable policy, contract, or agreement provisions shall govern the amount of these investments held in the separate account. However, with regard to variable life insurance separate accounts and accumulations thereon, the separate accounts shall have sufficient net investment income and readily marketable assets to meet anticipated obligations under policies funded by the account. The limitations contained in Sections 1192.4 and 1198 are not applicable to these investments. These investments shall not be included in determining the propriety of other investments of the company. The liability of the company with respect thereto, but only to the extent prescribed in the agreement, shall be shown on the statement of the company in the manner prescribed by the commissioner. Amounts allocated by an insurance company to separate accounts in the exercise of the power granted by this section shall be owned by the company, but shall not be chargeable with liabilities arising out of any other business the company may conduct except and to the extent provided in the policy, contract, or agreement. The company shall not hold itself out to be a trustee in respect to these amounts. (b) In addition to amounts otherwise allocated to separate accounts, a domestic life insurer may allocate to the account or accounts amounts which otherwise would be subject to investment in accordance with Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1. The aggregate of these additional amounts shall not, however, exceed 1 percent of its admitted assets as of the preceding December 31, or 5 percent of the excess of its admitted assets over its liabilities and required reserves as of the preceding December 31, whichever is the smaller. The company shall be entitled to withdraw at any time, in whole or in part, its participation in any separate account to which funds have been allocated as provided in this subdivision and to receive, upon withdrawal, its proportionate share of the value of the assets of the separate account at the time of withdrawal. (c) In addition to the allocations to separate accounts provided for in subdivision (a), a domestic insurer may, at the request of a policyholder or contractholder or the beneficiary of a policy or contract, allocate to any separate account or accounts, death payments, proceeds of matured endowments, dividends, or surrender values. (d) Except as otherwise provided in Section 10506.4, or with the approval of the commissioner, and under conditions as to investments and other matters as he or she may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for (1) benefits guaranteed as to dollar amount and duration and (2) funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account that, as provided under applicable policy, contract, or agreement, is or is not chargeable with liabilities arising out of any other business the company may conduct. (e) Unless otherwise approved by the commissioner, assets allocated to a separate account shall be valued at their market value, or at amortized cost if it approximates market value within the limits and constraints imposed by the United States Securities and Exchange Commission, on the date of valuation, or, if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to the separate account. Unless otherwise approved by the commissioner, the portion of any of the assets of the separate account equal to the company’s reserve liability, with regard to the guaranteed benefits and funds referred to in subdivision (d), shall be valued in accordance with the rules otherwise applicable to the company’s assets. (f) (1) Except as provided in paragraph (2) of subdivision (f), a sale, exchange, or other transfer of assets may not be made by a company between any of its separate accounts, or between any other of its investment accounts and one or more of its separate accounts unless, in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless the transfer, whether into or from a separate account is made (1) by a transfer of cash, or (2) by a transfer of securities having a readily determinable market value, and the transfer of securities is approved by the commissioner. The commissioner may approve other transfers among the accounts if, in his or her opinion, the transfer would not be inequitable. (2) Transfers from an insurer’s general account to one or more of its separate accounts to establish and maintain reserves for the guarantees authorized by Section 10506.4 shall only be made in cash in accordance with methods of operations approved pursuant to subdivision (c) of Section 10506.4. A transfer shall not operate to increase the amounts permitted to be allocated by an insurer to the separate accounts pursuant to this subdivision or by subdivision (b) of Section 10506, and the provisions of that subdivision shall not limit these transfers. (g) Any domestic life insurance company which establishes one or more separate accounts pursuant to this section may provide for special voting rights and procedures for participants in the separate account relating to investment policy, investment advisory services, and selection of certified public accountants in relation to the administration of the assets in any separate account. The voting rights shall be in addition to, and shall not affect, voting rights of mutual insurers. (h) The purpose and intent of this section is to permit the issuance and delivery of policies or contracts, in connection with a pension, retirement, retirement medical benefits, or profit-sharing plan, or program for one or more persons, or policies of variable life insurance, providing for the payment of benefits in fixed or variable amounts, or both, and the establishment of separate accounts by domestic companies for the administration of and investments under these agreements. To protect the public and policyholders located in this state from hazardous operation by domestic and foreign companies, and to further the purpose and provision of this section, no domestic or foreign life insurance company shall undertake the issuance of any contract providing for variable benefits until the company has satisfied the commissioner that its condition or method of operation in connection with the issuance of these contracts shall not be such as would render its operation hazardous to the public or its policyholders in this state and, in the case of a foreign or alien insurer, that it meets the conditions prescribed in Section 716, for the issuance of a certificate of authority. In determining the qualification of a company requesting authority to issue contracts providing for variable benefits within this state, the commissioner shall consider among other things, (1) the history of the company; (2) the character, responsibility, and general fitness of the officers and directors of the company; (3) the regulation of a foreign company by its state of domicile; (4) the adequacy of the investment management which the company is providing; and (5) the company’s arrangements for the supervision of the marketing of the contracts. Subsequent to an insurer initially satisfying the commissioner that its condition or method of operation would not render its operation hazardous to the public or its policyholders, the insurer shall notify the commissioner at any time it implements a material change respecting the mutual funds underlying the variable contract separate account available or to be available with a policy or contract providing variable benefits. The notification shall prominently disclose the sales charges, management and other fees payable to the insurer under the contract, and whether one or more of the mutual funds underlying the variable contract separate account are issued by an affiliated company and the names of those mutual funds. The notification shall be accompanied by a certification signed by an executive officer having responsibility for contracts providing variable benefits stating that the change complies with relevant statutes and regulations. The commissioner may review the notification to ensure the continued qualification of the insurer to issue and deliver those policies and contracts. The commissioner may make reasonable rules and regulations as he or she considers necessary, proper, and advisable concerning the issuance and delivery of these policies and contracts and the payment of benefits thereunder and the manner in which the separate accounts shall be administered and which types of policies and contracts, if any, shall be subject to his or her approval prior to issue. Notification of any material change shall not be subject to the commissioner’s approval or acknowledgment prior to implementation. The commissioner shall promulgate on an emergency basis, and in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), a regulation superseding Insurance Department Bulletin 97-2 that shall become effective January 1, 2003. Until promulgation of the regulation, the commissioner and insurers may continue to rely upon Insurance Department Bulletin 97-2, except that the commissioner’s approval or acknowledgment prior to implementation of a change to a mutual fund underlying a variable contract separate account shall not be required on or after January 1, 2003. However, no company may provide variable benefits in its contracts unless it is an admitted insurer having and maintaining a combined capital and surplus of at least ten million dollars ($10,000,000). For purposes of this section, “affiliated company” has the same meaning given in paragraph (1) of subsection (g) of Section 6701 of Title 15 of the United States Code. (i) (1) Any contract providing benefits payable in variable amounts delivered or issued for delivery in this state on or after the effective date of the amendments to this section enacted at the 1971 Regular Session of the Legislature shall contain a statement of the essential features of the procedures to be followed by an insurance company in determining the dollar amount of these variable benefits. Any contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that the dollar amount shall so vary, and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis. Except for Article 3a (commencing with Section 10159.1) of Chapter 1 of Part 2 of Division 2, in the case of a variable life insurance policy, and except as otherwise provided in this section, all pertinent provisions of this code shall apply to separate accounts and contracts relating thereto. Any variable life insurance contract, delivered or issued for delivery in this state on or after the effective date of the amendments to this section enacted at the 1992 Regular Session of the Legislature, shall contain such nonforfeiture provisions as are appropriate to such a contract. (2) The reserve liability for variable contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees. (j) No insurer shall issue anywhere any group variable life insurance policy for which the master contractholder or any covered party is an individual residing in this state or is a corporation, association, trust, or other legal entity that is either domiciled in or has its principal place of business in this state, unless the insurer has become qualified to issue variable life insurance policies and its group master policy form together with all forms of certificates or notices thereunder have been approved by the commissioner. Group variable life insurance policies shall be issued only to groups referred to in Chapter 2 (commencing with Section 10200) of Part 2 of Division 2. (Amended by Stats. 2002, Ch. 347, Sec. 3. Effective January 1, 2003.)
  171. 10506.1.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. )

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    The commissioner must charge a $2,823 fee for the qualification determination, and may require domestic insurers to pay additional amounts needed to cover administrative costs above $849.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. ) ## 10506.1. The commissioner shall require the payment of two thousand eight hundred twenty-three dollars ($2,823), as a fee for the determination of qualification required by Section 10506. Upon completion of the determination of qualification, and, whether authorization to issue contracts providing variable benefits is granted or denied, the commissioner shall require the payment by domestic insurers of those additional amounts from the requesting domestic insurer as may be necessary to defray all administrative costs in excess of eight hundred forty-nine dollars ($849) incurred by the commissioner in making that determination. (Amended by Stats. 2017, Ch. 534, Sec. 62. (AB 1699) Effective January 1, 2018.)
  172. 10506.2.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. )

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    The commissioner must charge advance fees for specified document reviews and analyses involving variable contracts, variable life insurance policies, and certain asset transfers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. ) ## 10506.2. (a) The commissioner shall require the payment in advance of two thousand eight hundred twenty-three dollars ($2,823), as a fee for the examination and analysis of documents required by law to be filed with the commissioner by domestic or foreign insurers in connection with changes to an application and qualification to write variable contracts. (b) The commissioner shall require the payment in advance of seven hundred twenty-six dollars ($726), as a fee for the review, examination, and analysis of documents required to be filed by insurers issuing variable life insurance policies. (c) The commissioner shall require the payment in advance of three thousand six hundred eighteen dollars ($3,618), as a fee for the examination and analysis involved in approving transfers of assets pursuant to subdivision (f) of Section 10506. (Amended by Stats. 2017, Ch. 534, Sec. 63. (AB 1699) Effective January 1, 2018.)
  173. 10506.3.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. )

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    The commissioner must adopt regulations for modified guaranteed annuities and issue a bulletin on variable life insurance. The commissioner also must approve qualifying group master policy forms before the bulletin is issued.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. ) ## 10506.3. (a) The commissioner shall adopt appropriate administrative regulations governing modified guaranteed annuities. Modified guaranteed annuities shall be subject to Article 3b (commencing with Section 10168) of Chapter 1 of Part 2 of Division 2 with regard to nonforfeiture values computed under the terms of the annuity but excluding from the computation the effect of market-value adjustment factors. (b) Group annuities exempted under Section 10168 are also exempted from any modified guaranteed annuity regulations. (c) Subdivision (b) shall be retroactive to January 1, 1987, to the extent the assets underlying such group contracts have not been maintained in a separate account. (d) The commissioner shall issue a bulletin, on or before July 1, 1987, setting forth conditions under which variable life insurance may be issued, or issued for delivery, in this state as permitted by Chapter 731 of the Statutes of 1984. Upon issuance of the bulletin, regulations regarding variable life insurance contained in Article 11.1 (commencing with Section 2534) of Title 10 of the California Code of Regulations shall be of no force and effect as long as the bulletin is effective. The bulletin authorized by this section shall have the same force and effect, and may be enforced by the commissioner to the same extent and degree, as the regulations superseded by it until the time that the commissioner may make additional or amended regulations as provided by subdivision (h) of Section 10506. On or before July 1, 1993, the commissioner may amend the existing bulletin to include reasonable provisions relating to requirements for group variable life insurance. Notwithstanding the foregoing authority to issue a bulletin and prior to its issuance, the commissioner shall approve group master policy forms and certificates and notices related thereto that reasonably comply with the general provisions set forth in Sections 10506 to 10506.2, inclusive, and any other applicable statutes or regulations. (Amended by Stats. 1994, Ch. 984, Sec. 5. Effective September 29, 1994.)
  174. 10506.4.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. )

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    This section lets certain financially qualified life insurers guarantee assets in separate accounts, but only for approved policies and subject to commissioner approval, filing, reserve, and financial 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. ) ## 10506.4. (a) An admitted life insurer that is financially qualified pursuant to subdivision (b) and complies with the provisions of this section and those of Section 10506 that expressly refer to this section or are not inconsistent with it, may guarantee, pursuant to an approved policy, contract, or agreement, the value of the assets allocated to a separate account, which as provided under the applicable policy, contract, or agreement is not chargeable with liabilities arising out of any other business the company may conduct, or the investment results thereof, or the income thereon, or the benefits payable pursuant to the approved policy, contract, or agreement, and may transfer to the separate account cash to maintain its reserves for those guarantees pursuant to paragraph (2) of subdivision (f) of Section 10506. The general account of the insurer shall be paid reasonable and sufficient compensation not less frequently than quarterly, for risks and other expenses incurred, from any separate account that receives a guarantee authorized by this section. (b) For the purposes of this section “approved policy, contract, or agreement” means a policy, contract, or agreement, the form of which has been approved by the commissioner, for issue or marketing in this state, and which in addition to meeting the requirements of all pertinent provisions of this code, meets the requirements of one of the following paragraphs: (1) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The weighted asset valuation reserve factor for the assets held in the separate account pursuant to the terms of the policy, contract, or agreement shall not exceed 2 percent. (B) Guarantees of interest that extend beyond 14 months at any time shall be no greater than 3 percent per annum. (C) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurer’s general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (D) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (2) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The weighted asset valuation reserve factor for the assets held in the separate account pursuant to the terms of the policy, contract, or agreement shall not exceed 4 percent. (B) The market value of the assets held in the separate account plus any reserves described in subparagraph (C) shall exceed the current aggregate liabilities determined by discounting the guaranteed benefit liability cashflows at the rate of 105 percent of the then current yields as quoted on United States Government issued securities having substantially similar maturities by at least the following applicable amount: (i) For assets consisting of debt instruments, an amount equal to the asset valuation reserve “maximum reserve factor,” provided, however, that the factor shall be reduced by 50 percent for the purpose of this calculation if the difference in durations of the assets and liabilities (as confirmed in the actuarial statement referred to in subparagraph (B) of paragraph (1) of subdivision (d)) are one year or less. (ii) For assets that are not debt instruments, 20 percent. (C) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurer’s general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (D) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (3) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The guarantees contained in the policy, contract, or agreement applicable to the value of the assets held in the separate account by the insurer shall be based upon a publicly available interest rate series or an index of the aggregate market value of a group of publicly traded financial instruments, the interest rate series or index to be specified in the policy, contract, or agreement. (B) Assets held in the separate account and the accumulations thereon shall be invested in accordance with the requirements of subdivision (a) of Section 10506 applicable to policies, contracts, or agreements governed by this section and shall comply with all of the following: (i) Interest-bearing bonds, notes, or other obligations shall be publicly traded or meet applicable requirements of the United States Securities and Exchange Commission enabling the securities to be publicly traded. (ii) Investments in capital stock shall be traded on an exchange regulated by the United States Securities and Exchange Commission, and investments in any futures contracts with respect thereto shall be traded on an exchange regulated under the Commodities Exchange Act (Title 7, United States Code). (iii) Issuers of interest-bearing obligations held in the separate account must be rated by an independent nationally recognized financial rating agency approved by the commissioner or by the Securities Valuation Office of the National Association of Insurance Commissioners. (iv) With respect to any investments in shares of investment companies registered under the federal Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) the assets of the entity must qualify as investments directly allowed for separate accounts pursuant to the requirements of subdivision (a) of Section 10506 applicable to policies, contracts, or agreements governed by this section. (v) The type, quality, industry diversification, prepayment characteristics, expected duration, and other factors pertaining to investments shall be set forth in the approved method of operations which shall contain a demonstration satisfactory to the commissioner that the investments are likely to achieve the performance of the applicable index or interest rate series. (C) The period between the commencement date of the guaranty of the value of the assets held in the separate account and the conversion date, if any, shall not exceed five years. (D) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurer’s general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (E) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (4) For the purposes of this section, “conversion date” means the date, if any, specified in the policy, contract, or agreement upon which the assets held pursuant to it shall be converted or applied to the purchase of annuities or returned to the owner of the policy, contract, or agreement, or its designee. (5) For the purposes of this section, the “asset valuation reserve factor” for each asset will be determined by the application of the asset valuation reserve factor, “maximum reserve factor,” as contained in the National Association of Insurance Commissioners (NAIC) Life, Accident and Health Annual Statement Instructions (Instructions) and Valuation of Securities Manual, or if not contained therein, an asset valuation reserve factor of 20 percent shall be assigned. To determine the weighted asset valuation reserve factor, the asset valuation reserve factor shall be applied to the market value of each asset. (6) For the purposes of this section, “market value” means the policy, contract, or agreement’s proportionate share of the actual market value of the separate account at the time of withdrawal or if the determination of market value is by formula, the formula shall be set forth in the policy, contract, or agreement and shall be designed to closely match actual market value. (7) For the purposes of this section, “guarantee effective date” means the date guarantees authorized by this section may result in payments from the general account to the separate account. (c) No admitted life insurer may issue or market in this state, nor may any domestic life insurer issue or market anywhere, a policy, contract, or agreement, or coverage thereunder by certificate or otherwise, which contains the guarantees referred to in subdivision (a) unless both of the following apply: (1) It has received from the commissioner authority to issue policies or contracts providing for the payment of variable benefits pursuant to subdivision (h) of Section 10506. (2) The commissioner has determined after application by the insurer in the form and content as the commissioner may require, review of the insurer’s applicable proposed method of operations relating to policies, contracts, or agreements containing the guarantees authorized by subdivision (a), payment of fees specified in Section 736 and consideration of the matters set forth in subdivision (h) of Section 10506, that the insurer is financially qualified to issue policies, contracts, or agreements that contain the guarantees referred to in subdivision (a) including by meeting or exceeding the financial standards in subdivision (d). (d) (1) No admitted life insurer that has been financially qualified pursuant to subdivision (c) may issue or market or continue to issue or market in this state, nor may any domestic life insurer issue or market anywhere or continue to issue or market anywhere, policies, contracts, or agreements, or coverage thereunder by certificate or otherwise, providing the guarantees referred to in subdivision (a) unless all of the following apply: (A) It has at least one billion dollars ($1,000,000,000) of admitted assets or at least one hundred million dollars ($100,000,000) of aggregate capital and surplus. (B) It annually complies with the requirement to furnish an actuarial statement as a part of or in addition to the statement required by Section 10489.15, provided the actuarial statement is in form and substance satisfactory to the commissioner. This actuarial statement shall meet all the following requirements: (i) The statement shall state that, after taking into account risk charges payable from the assets of the separate account with respect to the guarantee, the assets of the separate account, together with any reserves in excess of the account value, make good and sufficient provision for the liabilities of the insurer with respect thereto. (ii) The statement shall provide an opinion of the reasonableness and sufficiency of the pricing of any general account guarantees and any other fees for administration paid to the general account from the separate account. (iii) The statement shall be supported by a memorandum by a qualified actuary, also in form and substance satisfactory to the commissioner, that describes the calculations made in support of the actuarial statement and includes the assumptions used in the calculations. (C) Its ratio of aggregate capital and surplus to its aggregate liabilities is not lower than 75 percent of that ratio as of the December 31 prior to its receiving financial qualification from the commissioner except as allowed under paragraph (4) of subdivision (d). For the purposes of this section, “capital and surplus” includes capital and surplus plus the asset valuation reserve and one-half of the liability for dividends, all as reflected on the most recent financial statement on file with the commissioner. “Liabilities” means the total liabilities as reflected on the financial statement excluding therefrom liabilities for policies, contracts, and agreements issued in connection with separate accounts, liabilities in connection with contracts issued pursuant to this section and excluding both of the following: (i) The liability for any asset valuation reserve. (ii) One-half the liability for dividends. (2) If the commissioner, following notice to the insurer and a hearing, determines that an insurer that has received financial qualification pursuant to subdivision (c) no longer maintains the financial strength needed to initially receive the qualification, the commissioner may issue an order requiring the insurer to cease issuing new policies, contracts, or agreements providing for guarantees contemplated by subdivision (a). (3) In the event an insurer that has received financial qualification pursuant to subdivision (c) determines that it does not meet the requirements of subdivision (d), it shall promptly comply with paragraph (2) as if an order had been issued by the commissioner after notice and hearing, and within 45 days, notify the commissioner in writing at the place designated by the commissioner that it has ceased to meet the requirements specified in the written notice. (4) In the event the insurer thereafter meets or exceeds all of the requirements of subdivision (d), it may notify the commissioner at the place designated by the commissioner, in writing, and upon the passage of 45 days following receipt by the commissioner of the notice, may resume issuing policies, contracts, or agreements that provide for guarantees contemplated by subdivision (a) as long as it meets the requirements of subdivision (d). However, if the insurer believes that the resumption of the issuance of the policies, contracts, or agreements that provide for the guarantees contemplated by subdivision (a) would not be hazardous to its policyholders or the citizens of California, even though it does not meet the requirements specified in subparagraph (C) of paragraph (1), the insurer shall include in the notice a demonstration that the issuance of policies, contracts, or agreements containing the guarantees referred to in subdivision (a) is not hazardous to its policyholders or the citizens of California. Within the 45-day period, the commissioner may issue an order containing the requirements of paragraph (2) if, in the commissioner’s opinion, any of the requirements of subdivision (d) are not met, or resumption would violate any provision of this code or, resumption may be hazardous to the insurer, policyholders, creditors, or the public. The failure to issue an order within 45 days shall not be deemed an approval of the activities. The order shall specify the grounds upon which the commissioner is basing the order. The insurer may, within 10 days of the order, request a hearing. The hearing shall be a private hearing and shall commence not less than 10 days, nor more than 20 days, after the request for hearing is served on the commissioner. (e) Policies, contracts, and agreements referred to in subdivision (a), that are not otherwise subject to filing under applicable law and regulation, shall be filed, before being marketed or issued in this state, by the insurer with the commissioner. If the commissioner finds that the policies, contracts, or agreements submitted pursuant to subdivision (a) contemplate practices that are unfair or unreasonable or otherwise inconsistent with the provisions of this code, he or she may disapprove of the forms of policies, contracts, or agreements specifying in what regard the policies, contracts, or agreements are unfair or unreasonable or otherwise inconsistent with the provisions of this code. (f) As an alternative to the filing and approval procedure set forth in subdivision (e), an insurer that satisfies eligibility criteria specified in the bulletin authorized by subdivision (g) may file with the commissioner the proposed form of the policy, contract, or agreement, together with an officer’s certificate, accompanied by an actuarial certification and demonstration, and other supporting material, all in accordance with procedures set forth in the bulletin authorized by subdivision (g). An insurer may issue and deliver a policy, contract, or agreement the day following approval by the commissioner of a filing under this subdivision. Absent explicit approval, an insurer may, no sooner than 30 working days after the filing of the policy, contract, or agreement and all required supporting documentation, issue and deliver any policy, contract, or agreement that has been filed pursuant to this subdivision if the commissioner has not notified the insurer in writing that the filing lacks the required documentation or that he or she objects to the filing upon grounds sufficient to disapprove the policy, contract, or agreement. The bulletin shall set forth procedures providing the insurer an opportunity to respond to any objections. If the commissioner finds that the officer’s certificate or the actuarial certification or demonstration filed in support of the policy, contract, or agreement is false or incorrect, the commissioner may, in addition to taking any other lawful measures, including suspension of authority to use the policy, contract, or agreement, declare the insurer ineligible to utilize the alternative procedure authorized by this subdivision for a period not to exceed three years from the date of the filing of the policy, contract, or agreement. The commissioner may summarily suspend the use of any policy, contract, or agreement used by the insurer pursuant to this subdivision on any grounds sufficient to disapprove the policy, contract, or agreement, or if the filing fails to include the required documents. This suspension may be prospective only. Suspension of use of a policy, contract, or agreement shall be in writing and shall specify the reasons for the suspension. Unless the commissioner in the suspension order or subsequent thereto specifies a later effective date for the suspension, any suspension shall be effective on the day following the receipt of the suspension order by the insurer. An insurer affected by any suspension, issued pursuant to this subdivision, of a policy, contract or agreement may refile the policy, contract, or agreement with the commissioner pursuant to subdivision (e). The commissioner may suspend or discontinue filings of policies, contracts, or agreements under this subdivision at any time upon notice to affected insurers. Any filing by an insurer of a policy, contract, or agreement under this subdivision that is not accepted by the commissioner may be filed by the insurer pursuant to subdivision (e). (g) The commissioner may issue, and amend from time to time thereafter, as he or she deems appropriate, a bulletin setting forth reasonable requirements for insurers that issue policies, contracts, or agreements referred to in subdivision (a) relating to all of the following: (1) The reserves to be maintained by insurers for those policies, contracts, or agreements. (2) The accounting and reporting of funds credited under, assets held with respect to, and transfers to and from the insurer’s general account and separate accounts pertaining to, those policies, contracts, or agreements. (3) The disclosure of information to be given to holders and prospective holders of those policies, contracts, or agreements. (4) The qualification of persons selling those policies, contracts, or agreements on behalf of the insurers. (5) The filing of those policies, contracts, or agreements with the commissioner. (6) The filing with the commissioner of specified sales and financial information pertaining to those policies, contracts and agreements. (7) The eligibility criteria and procedure for filing under subdivision (f). (8) Other matters relating to those policies, contracts, and agreements as the commissioner considers necessary, proper, and advisable that are not inconsistent with this section. This bulletin shall have the same force and effect, and may be enforced by the commissioner to the same extent and degree, as regulations issued by the commissioner until the time that the commissioner issues additional or amended regulations. (h) The authority granted in this section is in addition to the authority granted to life insurers by other provisions of this code and the requirements of this section shall not contravene that authority. No policy, contract, or agreement that constitutes investment return assurance pursuant to Section 10203.10 or Section 10507 may be issued pursuant to this section. (i) Guarantees authorized by this section may only be made in connection with policies, contracts, or agreements issued to an owner that is not a natural person, and is an “accredited investor” as defined in Regulation D-Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act of 1933, 17 Code of Federal Regulations Section 230.501 et seq., as promulgated by the United States Securities and Exchange Commission, in transactions where the aggregate single premium or deposit for all policies, contracts, or agreements (excluding certificates issued under a group or master policy) issued to the owner containing guarantees authorized by this section is at least one million dollars ($1,000,000). Notwithstanding the foregoing, an insurer may issue policies, contracts, or agreements qualifying under paragraph (1) of subdivision (b) above, to a pension, retirement, or retirement medical benefit or profit-sharing plan reasonably expected to receive contributions in excess of two hundred fifty thousand dollars ($250,000) within the first 12 months following issuance of the policy, contract, or agreement and that has more than 10 participants. Policies, contracts, or agreements providing coverage in this state, by certificate or otherwise, that contain guarantees authorized by this section issued on a group basis shall be issued only to groups referred to in Chapter 2 (commencing with Section 10200) of Part 2 of Division 2. (Amended by Stats. 2003, Ch. 352, Sec. 1. Effective January 1, 2004.)
  175. 10506.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. )

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    Insurers may deliver or issue variable contracts with guaranteed living benefits only if the listed conditions are met; otherwise they may not do so except as 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 5. Pension Funds, Separate Accounts [10506 - 10506.5] ( Article 5 added by Stats. 1963, Ch. 743. ) ## 10506.5. (a) For the purposes of this section, “guaranteed living benefit” means a benefit in a variable annuity or a variable life insurance contract providing that one or more benefit amounts available to a living contractholder, under specified conditions, will be enhanced should it fall below a given level, in the absence of the guaranteed living benefit. (b) An insurer may deliver or issue for delivery contracts containing, or riders to variable contracts providing, guaranteed living benefits if all the following requirements are met: (1) The insurer is authorized to deliver, or issue for delivery, variable insurance products in this state. (2) The insurer meets the requirements of paragraph (1) of subdivision (d) of Section 10506.4. (3) The commissioner has issued a bulletin setting forth the terms and conditions under which variable contracts containing, or riders to variable contracts providing, guaranteed living benefits may be issued or delivered in this state. (4) The variable contract or rider meets the terms and conditions for guaranteed living benefits established by the commissioner and set forth in the bulletin described in paragraph (3) and the insurer desiring to issue the variable contract or rider has satisfied the requirements set forth in Section 2529 of Title 10 of the California Code of Regulations. (c) The bulletin described in paragraph (3) of subdivision (b) may include provisions covering requirements similar to those included in subdivision (f) of Section 10506.4. The bulletin shall have the same force and effect, and may be enforced by the commissioner to the same extent and degree as regulations issued by the commissioner until the time that the commissioner issues additional or amended regulations pertaining to guaranteed living benefits. (d) An insurer may not deliver or issue for delivery variable contracts containing, or riders to variable contracts providing, guaranteed living benefits except pursuant to this section. No policy, contract, rider, or agreement that constitutes investment return assurance pursuant to Section 10203.10 or 10507, or guarantee pursuant to Section 10506.4, may be issued pursuant to this section. (Amended by Stats. 2001, Ch. 159, Sec. 149. Effective January 1, 2002.)
  176. 10507.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. )

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    Life insurers authorized to do business in the state may issue these policies, but investment return assurance is only allowed if the insurer meets commissioner review, certificate conditions, capital/surplus requirements, and a special contingency fund requirement.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. ) ## 10507. (a) Any life insurance company authorized to do business in this state shall be permitted to issue and deliver individual policies in connection with the payment of benefits against the risk of loss in the value of redeemable securities of the insured investor issued by investment companies regulated by the federal Investment Company Act of 1940, as amended, and whose redeemable securities are registered under the federal Securities Act of 1933, as amended. For purposes of this article, such benefits shall be referred to as “investment return assurance.” (b) Policies providing such investment return assurance shall provide a benefit equal to the difference between the amount paid for such redeemable securities and the value of such redeemable securities at the earlier of either (1) the end of the policy period, or (2) the date of death of the insured. (c) To protect the public and policyholders located in this state from hazardous operation by domestic, foreign, or alien companies, and to further the purpose and provision of this part, no domestic, foreign, or alien insurance company shall undertake the issuance of any policy providing for investment return assurance until such company has satisfied the commissioner that its condition or method of operation in connection with the issuance of such policies shall not be such as to render its operation hazardous to the public, or its policyholders in this state, and, whether domestic, foreign, or alien, that it meets the conditions prescribed in Section 717 for the issuance of a certificate of authority. In the determination of the qualification of a company requesting authority to issue policies providing for investment return assurance within this state, the commissioner shall consider, in addition to the requirements of Section 717, (1) the history of the company, (2) the character, responsibility, and general fitness of the officers and directors of the company, (3) the regulation of a foreign or alien company by its state of domicile, (4) the adequacy of the investment management which the company is providing, and (5) the company’s arrangements for the supervision of the marketing of such policies. No company may provide investment return assurance in its policies unless it is an admitted insurer having and maintaining a combined capital and surplus of at least two million dollars ($2,000,000). (d) In addition to the requirements of subdivision (c), no admitted insurer may provide investment return assurance in its policies unless it establishes a special contingency fund of not less than one million dollars ($1,000,000). This fund shall be deemed to constitute a reserve liability in addition to other reserves of such insurer. In the event such insurer writes investment return assurance both on an individual and a group basis, the special contingency fund shall be one million dollars ($1,000,000) for both. (Added by Stats. 1971, Ch. 1566.)
  177. 10507.1.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. )

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    The commissioner must charge a $374 fee for a qualification determination, and may require the requesting insurer to pay additional amounts needed to cover administrative costs above $374.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. ) ## 10507.1. The commissioner shall require the payment of three hundred seventy-four dollars ($374), as a fee for the determination of qualification required by Section 10507. Upon completion of the determination of qualification, and whether authorization to issue policies providing investment return benefits is granted or denied, the commissioner shall require the payment of those additional amounts from the requesting insurer as may be necessary to defray all administrative costs in excess of three hundred seventy-four dollars ($374) incurred by the commissioner in making that determination. (Amended by Stats. 2017, Ch. 534, Sec. 64. (AB 1699) Effective January 1, 2018.)
  178. 10507.2.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. )

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    An investment return assurance policy may not be issued or delivered in this state until its form is filed with the commissioner, required fees are paid, and the commissioner gives written approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. ) ## 10507.2. An investment return assurance policy evidencing such insurance, shall not be issued or delivered in this state until a copy of the form thereof is filed with the commissioner, the fees required by Section 12973.9 are paid, and the commissioner has given written approval of the form. (Amended by Stats. 1983, Ch. 142, Sec. 88.)
  179. 10507.3.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. )

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    Investment return assurance policies must include specified statements and reserve/nonforfeiture features, and the commissioner may adopt reserve valuation 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. ) ## 10507.3. No policy of investment return assurance shall be delivered or issued for delivery to any person in this state unless each such policy does all of the following: (a) Includes a statement on the first page thereof in boldface type that, in the event that the investment covered by the policy exceeds the benefit provided under the policy, there shall be no benefit. (b) Provides for both of the following: (1) The reserves for all investment return assurance policies shall be computed and maintained on a basis which shall place an actuarially sound value on the liabilities under such policies. To provide a basis for the determination of such actuarially sound values, the commissioner, from time to time, shall adopt rules requiring the use of appropriate tables of morbidity, mortality, interest rates, and valuation methods for such reserves. (2) 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 ratio of the number of years the policy has been in force to the total premium-paying period times the present value of benefits payable had the policy been kept in full force and effect for the total premium-paying period. (Added by Stats. 1971, Ch. 1566.)
  180. 10507.4.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. )

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    The commissioner may make reasonable rules and regulations for 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6. Investment Return Assurance [10507 - 10507.4] ( Article 6 added by Stats. 1971, Ch. 1566. ) ## 10507.4. In furtherance of the purpose of this article, the commissioner may make reasonable rules and regulations. The rules and regulations shall be adopted, amended, or repealed 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. (Amended by Stats. 1985, Ch. 106, Sec. 99.)
  181. 10507.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.5. Portfolio Indexing [10507.5- 10507.5.] ( Article 6.5 added by Stats. 1995, Ch. 419, Sec. 2. )

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    An insurer may use portfolio-indexed life insurance policies only if it meets size and authorization requirements, files the forms with the commissioner when required, and follows the commissioner’s bulletin and approval 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 6.5. Portfolio Indexing [10507.5- 10507.5.] ( Article 6.5 added by Stats. 1995, Ch. 419, Sec. 2. ) ## 10507.5. (a) An insurer may deliver or issue for delivery one or more policies, contracts, or agreements that establish the insurer’s obligations under the policies, contracts, or agreements by reference to a portfolio of assets that is not owned by or possessed by the insurer, if the following requirements are met: (1) The insurer is authorized to deliver, or issue for delivery, life insurance policies in this state. (2) The insurer has at least one billion dollars ($1,000,000,000) in admitted assets or one hundred million dollars ($100,000,000) in capital and surplus, as reflected by the most recent financial statements on file with the commissioner. For the purposes of this section, “capital and surplus” includes capital and surplus plus the asset valuation reserve and one-half of the liability for dividends, all as reflected on the most recent financial statement on file with the commissioner. (b) Policies, contracts, and agreements referred to in subdivision (a), that are not otherwise subject to filing under applicable law and regulation, shall be filed, before being marketed or issued in this state, by the insurer with the commissioner. If the commissioner finds that the policies, contracts, or agreements submitted pursuant to subdivision (a) contemplate practices that are unfair or unreasonable or otherwise inconsistent with the provisions of this code, he or she may disapprove of the forms of policies, contracts, or agreements specifying in what regard the policies, contracts, or agreements are unfair or unreasonable or otherwise inconsistent with the provisions of this code. (c) As an alternative to the filing and approval procedure set forth in subdivision (b), if a bulletin is issued by the commissioner pursuant to subdivision (d), an insurer that satisfies eligibility criteria specified in that bulletin may file with the commissioner the proposed form of the policy, contract, or agreement, together with an officer’s certificate, accompanied by an actuarial certification and demonstration, and other supporting material, all in accordance with procedures set forth in the bulletin authorized by subdivision (d). An insurer may issue and deliver a policy, contract, or agreement the day following approval by the commissioner of a filing under this subdivision. Absent explicit approval, an insurer may, no sooner than 30 working days after the filing of the policy, contract, or agreement and all required supporting documentation, issue and deliver any policy, contract, or agreement that has been filed pursuant to this subdivision if the commissioner has not notified the insurer in writing that the filing lacks the required documentation or that he or she objects to the filing upon grounds sufficient to disapprove the policy, contract, or agreement. The bulletin authorized in subdivision (d) shall set forth procedures providing the insurer an opportunity to respond to any objections. If the commissioner finds that the officer’s certificate or the actuarial certification or demonstration filed in support of the policy, contract, or agreement is false or incorrect, the commissioner may, in addition to taking any other lawful measures, including suspension of authority to use the policy, contract, or agreement, declare the insurer ineligible to utilize the alternative procedure authorized by this subdivision for a period not to exceed three years from the date of the filing of the policy, contract or agreement. The commissioner may summarily suspend the use of any policy, contract, or agreement used by the insurer pursuant to this subdivision on any grounds sufficient to disapprove the policy, contract, or agreement, or if the filing fails to include the required documents. This suspension may be prospective only. Suspension of use of a policy, contract, or agreement shall be in writing and shall specify the reasons for the suspension. Unless the commissioner in the suspension order or subsequent thereto specifies a later effective date for the suspension, any suspension shall be effective on the day following the receipt of the suspension order by the insurer. An insurer affected by any suspension, issued pursuant to this subdivision, of a policy, contract, or agreement may refile the policy, contract, or agreement with the commissioner pursuant to subdivision (b). The commissioner may suspend or discontinue filings of policies, contracts, or agreements under this subdivision at any time upon notice to affected insurers. Any filing by an insurer of a policy, contract, or agreement under this subdivision that is not accepted by the commissioner may be filed by the insurer pursuant to subdivision (b). (d) The commissioner may issue, and amend from time to time thereafter, as he or she deems appropriate, a bulletin setting forth reasonable requirements for insurers that issue policies, contracts, or agreements referred to in subdivision (a), relating to all of the following: (1) The reserves to be maintained by insurers for those policies, contracts, or agreements. (2) The accounting and reporting of those policies, contracts, or agreements. (3) The disclosure of information to be given to holders and prospective holders of those policies, contracts, or agreements. (4) The qualification of persons selling those policies, contracts, or agreements on behalf of the insurers. (5) The filing of those policies, contracts, or agreements with the commissioner. (6) The filing with the commissioner of specified sales and financial information pertaining to those policies, contracts and agreements. (7) The eligibility criteria and procedure for filing under subdivision (c). (8) Other matters relating to those policies, contracts, and agreements as the commissioner considers necessary, proper, and advisable that are not inconsistent with this section. This bulletin shall have the same force and effect, and may be enforced by the commissioner to the same extent and degree, as regulations issued by the commissioner until the time that the commissioner issues additional or amended regulations. (e) Upon completion of the determination of qualification required by subdivision (a), and, whether authorization to issue policies, contracts, or agreements referred to in subdivision (a) is granted or denied, the commissioner shall require the payment of the fee specified in Section 736 for the determination of qualification. (Amended by Stats. 2003, Ch. 352, Sec. 2. Effective January 1, 2004.)
  182. 10508.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. )

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    Life insurers and disability insurers must keep specified records, make them available to the commissioner, deliver copies within 30 days of written demand, and retain the records for at least five years.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. ) ## 10508. (a) It is the obligation of every insurer admitted in this state to transact life or disability insurance, or both, to maintain certain records specified in this article pertaining to the activities of its life, life and disability, and disability agents and any other agents for the inspection and examination of the commissioner. (b) The original or certified copies of the records shall be delivered to the commissioner within a period of 30 days following receipt of written demand therefor. (c) The records required to be maintained or made available in this state may be in the form of originals, carbon, or facsimile copies, microfilm copies, or electronic data-processing records if printouts are available within a reasonable period of time, and shall include, to the extent the data are pertinent and available for each insurance transaction, the names, dates, amounts and policy numbers involved. The records are composed of all of the following: (1) The original application for each insurance policy or contract sold in this state. (2) Records showing, for each insurance policy or contract issued, the premiums received by the insurer. (3) Production records showing all insurance policies or contracts sold by each agent or other agent in the expired portion of the current calendar year and the whole of each of the preceding five calendar years. (4) Records showing, for each insurance policy or contract issued, the amount of commissions paid and to whom. (5) Records or memoranda identifying any agent other, than the agent whose name appears on the application who, to the actual knowledge of the insurer, handled any part of an insurance transaction for which the other agent was not compensated. (6) Correspondence, written solicitations or proposals, or other written communications sent by the insurer to a prospect, applicant, or insured, or received from him or her by the insurer, excluding printed material in general use distributed by the insurer, either directly or indirectly through its life agents. (7) Correspondence, written proposals, notices, a statement of reasons, or other written communications, if any, pertaining to the recision, termination, or nonrenewal of a policy or contract, or the election of nonforfeiture values thereunder, sent by an insurer to a policyholder or contractholder or received from him or her by an insurer. (8) A copy of a written comparison of benefits, limitations, exclusions, and costs of existing accident, sickness, or long-term care coverage and proposed coverage. (9) A copy of the outline of coverage or disclosure statement required by law or regulation. (10) Copies of any correspondence between the policyholder or prospective policyholder and the agent or insurer. (11) Copies of correspondence between anyone acting on behalf of the policyholder or prospective policyholder and the agent or insurer. (d) Except as otherwise provided, the records shall be maintained for a minimum period of five years following the actual delivery of the insurance policy or contract to which each pertains, or, if no policy or contract was issued, for a minimum period of five years after the date of the application therefor. (Amended by Stats. 2003, Ch. 166, Sec. 1. Effective January 1, 2004.)
  183. 10508.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. )

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    Certain life insurance agents and insurers must keep applicable records at their principal place of business for at least five years and make them available for commissioner inspection.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. ) ## 10508.5. It shall be the obligation of each life, life and disability, and disability insurance agent and any other agent and insurer to preserve and maintain all applicable records defined in Section 10508 in his or her possession, in addition to those records transmitted to the insurer, at his or her principal place of business for a minimum of five years. The records shall be kept in an orderly manner so that the information therein is readily available, and shall be open to inspection or examination by the commissioner at all times. (Added by Stats. 1989, Ch. 631, Sec. 3.)
  184. 10508.6.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. )

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    The commissioner may collect and report certain insurance data, and may adopt annual reporting rules and share information with law enforcement. Covered institution officers, managers, agents, or employees must provide requested books, records, and related information to 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. ) ## 10508.6. (a) The Legislature finds and declares that there is no statutory authority for the commissioner to gather information or data on life insurance, annuity, or disability products for the purpose of evaluating trends in the marketplace or the uses these contracts serve. (b) The commissioner may collect, compile, analyze, and report data relating to life and disability insurance, annuity contracts, and related contracts offered, issued, delivered, or renewed in this state through any method of marketing. (c) Any officer, manager, agent, or employee of any institution offering life and disability insurance, annuity contracts, or related contracts, shall, upon request by the commissioner, exhibit to the commissioner all books, records, accounts, documents, or agreements governing its method of operation, together with all data, statistics, and information of every kind and character collected or considered by the institution in the conduct of its operations. (d) The commissioner may adopt reasonable rules and regulations requiring an annual reporting of the data authorized for collection under this section. (e) The commissioner may, for the purpose of furthering the uniform administration of regulatory laws, exchange information and data with law enforcement officials of this and other states relating to the implementation of the reporting requirements imposed by this section, and may consult with those officials regarding that information and data. (Added by Stats. 2003, Ch. 166, Sec. 2. Effective January 1, 2004.)
  185. 10508.7.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. )

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    A person subject to Section 10508.6 can face civil penalties for giving false information or not complying with an information request, with higher penalties for willful noncompliance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. ) ## 10508.7. A person subject to the requirements of Section 10508.6 who submits any false information in connection with a request for information or data pursuant to that section shall be liable for a civil penalty not to exceed one hundred thousand dollars ($100,000). A person subject to the requirements of Section 10508.6 who fails to comply with a request for information or data pursuant to that section shall be liable for a civil penalty not to exceed five thousand dollars ($5,000) for each 30-day period in which the person fails to comply. If the failure to comply is willful, the person shall be liable for a civil penalty not to exceed ten thousand dollars ($10,000) for each 30-day period in which the person fails to comply, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000). In determining the penalty, the commissioner shall consider the good faith of the person and any similar prior violations by the person under this code. (Added by Stats. 2003, Ch. 166, Sec. 3. Effective January 1, 2004.)
  186. 10508.8.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. )

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    The commissioner must, as far as possible, make sure any data call he or she issues does not conflict with similar data calls or data collection requests.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 7. Records [10508 - 10508.8] ( Heading of Article 7 renumbered from Article 5.5 by Stats. 1976, Ch. 1079. ) ## 10508.8. The commissioner shall ensure, to the furthest extent possible, that any data call issued by him or her does not conflict with any similar data call or data collection request, including, but not limited to, a request issued by the National Association of Insurance Commissioners. (Added by Stats. 2003, Ch. 166, Sec. 4. Effective January 1, 2004.)
  187. 10509.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    This section states the article’s purpose: to regulate insurers and agents in replacement transactions for existing life insurance and annuities.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509. The purpose of this article is the following: (a) To regulate the activities of insurers and agents with respect to the replacement of existing life insurance and annuities. (b) To protect the interests of life insurance and annuity purchasers by establishing minimum standards of conduct to be observed in replacement transactions by the following: (1) Assuring that the purchaser receives information with which a decision can be made in his or her own best interest. (2) Reducing the opportunity for misrepresentation and incomplete disclosures. (3) Establishing penalties for failure to comply with the requirements of this article. (Amended by Stats. 1991, Ch. 380, Sec. 1.5.)
  188. 10509.1.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    This article applies to all individual life insurance and annuity 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.1. This article is applicable to all individual life insurance and annuity policies. (Added by Stats. 1990, Ch. 963, Sec. 1.)
  189. 10509.2.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    This section defines key terms used for life insurance and annuity replacement 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.2. (a) “Replacement” means any transaction in which new life insurance or a new annuity is to be purchased, and it is known or should be known to the proposing agent, or to the proposing insurer if there is no agent, that by reason of that transaction, the existing life insurance or annuity has been or is to be any of the following: (1) Lapsed, forfeited, surrendered, or otherwise terminated. (2) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values. (3) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid. (4) Reissued with any reduction in cash value. (5) Pledged as collateral or subjected to borrowing, whether in a single loan or under a schedule of borrowing over a period of time for amounts in the aggregate exceeding 25 percent of the loan value set forth in the policy. (b) “Conservation” means any attempt by the existing insurer or its agent to dissuade a policyowner from the replacement of existing life insurance or annuity. Conservation does not include routine administrative procedures such as late payment reminders, late payment offers, or reinstatement offers. (c) “Direct-response sales” means any sale of life insurance or annuity where the insurer does not utilize an agent in the sale or delivery of the policy. (d) “Existing insurer” means the insurer whose policy is or will be changed or terminated in such a manner as described within the definition of “replacement.” (e) “Existing life insurance or annuity” means any life insurance or annuity in force including life insurance under a binding or conditional receipt or a life insurance policy that is within an unconditional refund period. (f) “Replacing insurer” means the insurer that issues a new policy which is a replacement of existing life insurance or annuity. (g) “Registered contract” means variable annuities, investment annuities, variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account, or any other contracts issued by life insurers which are registered with the Federal Securities and Exchange Commission. (Amended by Stats. 1991, Ch. 380, Sec. 2.)
  190. 10509.3.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    This section excludes several replacement-life-insurance situations from the article, and requires certain agents to provide specified replacement information when the same insurer is 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.3. (a) Unless otherwise specifically included, this article does not apply to the following: (1) Credit life insurance. (2) Group life insurance or group annuities. (3) An application to the existing insurer that issued the existing life insurance when a contractual change or a conversion privilege is being exercised, or when a term conversion privilege is exercised among corporate affiliates. (4) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same insurer. (5) Transactions where the replacing insurer and the existing insurer are the same; provided, however, that agents proposing replacement shall: (A) Comply with the requirements of subdivisions (a) and (d) of Section 10509.4. (B) Provide and leave with the applicant a written statement containing information relating to premiums, cash values, death benefits, and outstanding indebtedness, and dividends and dividend accumulations, if any, for the existing policy, both immediately before and after replacement, and for the proposed life insurance or annuity. (b) Registered contracts shall be exempt from the requirements of paragraphs (2) and (3) of subdivision (b) of Section 10509.6 requiring provision of policy summary or ledger statement information; however, premium or contract contribution amounts and identification of the appropriate prospectus or offering circular shall be required in lieu thereof. (c) “Term conversion privilege” means an option afforded by contract to certain holders of term life insurance policies that permits the policy to be converted into permanent insurance, including whole life insurance, universal life insurance, or variable life insurance, regardless of the insured’s physical condition and without a medical examination. The holder of a term life insurance policy with a term conversion privilege shall not be denied coverage or charged an additional premium for any health problems and premiums for the permanent policy shall be based on the same underwriting class as the term policy, regardless of any changes of health since the term policy was issued. (d) “Corporate affiliate” means the same as “affiliate” as defined in Section 1215. (Amended by Stats. 2008, Ch. 463, Sec. 1. Effective January 1, 2009.)
  191. 10509.4.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    Agents must give replacement disclosures and documents when a life insurance or annuity replacement is 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.4. (a) Each agent who accepts an application shall submit to the insurer with which an application for life insurance or annuity is presented, or as part of each application, both of the following: (1) A statement signed by the applicant as to whether replacement of existing life insurance or annuity is involved in the transaction. (2) A signed statement as to whether or not the agent knows replacement is or may be involved in the transaction. (b) Where a replacement is involved, the agent shall do all of the following: (1) Present to the applicant, not later than at the time of taking the application, a “Notice Regarding Replacement of Life Insurance” in the form as described in subdivision (d). The notice shall be signed by both the applicant and the agent and left with the applicant. Obtain with or as part of each application a list of all existing life insurance or annuities to be replaced and properly identified by name of insurer, the insured and contract number. If a contract number has not been assigned by the existing insurer, alternative identification, such as an application or receipt number, shall be listed. (2) Leave with the applicant the original or a copy of all printed communications used for presentation to the applicant. (3) Submit to the replacing insurer with the application a copy of the replacement notice. (c) Every agent who uses written or printed communications in conservation shall leave with the applicant the originals of any materials used. (d) Each agent or broker shall present to an applicant the following notice: NOTICE REGARDING REPLACEMENT REPLACING YOUR LIFE INSURANCE POLICY OR ANNUITY? Are you thinking about buying a new life insurance policy or annuity and discontinuing or changing an existing one? If you are, your decision could be a good one—or a mistake. You will not know for sure unless you make a careful comparison of your existing benefits and the proposed benefits. Make sure you understand the facts. You should ask the company or agent that sold you your existing policy to give you information about it. Hear both sides before you decide. This way you can be sure you are making a decision that is in your best interest. We are required by law to notify your existing company that you may be replacing their policy. (applicant) (agent) (date) _____ _____ (Amended by Stats. 1991, Ch. 380, Sec. 4.)
  192. 10509.5.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    Every life insurer must inform relevant staff about this article’s requirements and must require a signed replacement statement with each completed life insurance or annuity 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.5. Every life insurer shall do the following: (a) Inform its field representatives or other personnel responsible for compliance with this article of the requirements of this article. (b) Require with, or as part of, each completed application for life insurance or annuity a statement signed by the applicant as to whether such proposed insurance or annuity will replace existing life insurance or annuity. (Added by Stats. 1990, Ch. 963, Sec. 1.)
  193. 10509.6.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    Life insurers that use agents in life insurance or annuity sales must collect replacement-related statements and documents, notify existing insurers quickly, keep records, and provide refund notices; owners also get certain cancellation/refund 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.6. Every life insurer that uses an agent in a life insurance or annuity sale shall do the following: (a) Require with or as part of each completed application for life insurance or annuity, a statement signed by the agent as to whether he or she knows a replacement is or may be involved in the transaction. (b) Where a replacement is involved: (1) Require from the agent with the application for life insurance or annuity: (i) a list of all of the applicant’s existing life insurance or annuity to be replaced, and (ii) a copy of the replacement notice provided the applicant pursuant to Section 10509.4. The existing life insurance or annuity shall be identified by name of insurer, insured, and contract number. If a number has not been assigned by the existing insurer, alternative identification, such as an application or receipt number, shall be listed. (2) Send to each existing life insurer a written communication advising of the replacement or proposed replacement and the identification information obtained pursuant to this section and a policy summary, contract summary, or ledger statement containing policy data on the proposed life insurance or annuity. Cost indices and equivalent level annual dividend figures need not be included in the policy summary or ledger statement. This written communication shall be made within three working days of the date the application is received in the replacing insurer’s home or regional office, or the date the proposed policy or contract is issued, whichever is sooner. (3) Every existing life insurer or the insurer’s agent that undertakes a conservation shall, within 20 days from the date the written communication plus the materials required in subdivisions (1) and (2) are received by the existing insurer, furnish the policyowner with a policy summary for the existing life insurance or ledger statement containing policy data on the existing policy or annuity. Information relating to premiums, cash values, death benefits, and dividends, if any, shall be computed from the current policy year of the existing life insurance. The policy summary or ledger statement shall include the amount of any outstanding indebtedness, the sum of any dividend accumulations or additions, and may include any other information that is not in violation of any regulation or statute. Cost indices and equivalent level annual dividend figures need not be included. When annuities are involved, the disclosure information shall be that in the contract summary. The replacing insurer may request the existing insurer to furnish it with a copy of the summaries or ledger statement, which shall be within five working days of the receipt of the request. (c) The replacing insurer shall maintain evidence of the “notice regarding replacement,” the policy summary, the contract summary, and any ledger statements used, and a replacement register, cross-indexed by replacing agent and existing insurer to be replaced. The existing insurer shall maintain evidence of policy summaries, contract summaries, or ledger statements used in any conservation. Evidence that all requirements were met shall be maintained for at least three years. (d) The replacing insurer shall provide on the front of the policy jacket or on the cover page of its life insurance policy or annuity contract or, alternatively, as a separate written document which is delivered with the life insurance policy or annuity contract, a notice stating that the owner has a right to an unconditional refund of all premiums paid which right may be exercised within a period of 30 days commencing from the date of delivery of the contract. In the case of variable annuities, and variable life insurance, return of the contract during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the contract. (e) This section shall become operative on July 1, 2015. (Repealed (in Sec. 9) and added by Stats. 2014, Ch. 166, Sec. 10. (AB 2347) Effective January 1, 2015. Section operative July 1, 2015, by its own provisions.)
  194. 10509.7.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    An insurer must give replacement notice and related replacement-information requests when a life insurance or annuity replacement is involved, with some extra steps if the insurer proposed the replacement.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.7. (a) If in the solicitation of a direct response sale, an insurer does not propose the replacement, and a replacement is involved, the insurer shall send to the applicant with the policy a replacement notice as described in subdivision (d) of Section 10509.4 or other substantially similar form approved by the commissioner. In those instances the insurer may delete the last sentence and the reference to signatures from the form without having to obtain approval of the form from the commissioner. (b) If the insurer proposed the replacement it shall do the following: (1) Provide to applicants or prospective applicants with or as part of the application a replacement notice as described in subdivision (d) of Section 10509.4. (2) Request from the applicant with or as part of the application, a list of all existing life insurance or annuities to be replaced and properly identified by name of insurer and insured. (3) Comply with the requirements of paragraph (2) of subdivision (b) of Section 10509.6, if the applicant furnishes the names of the existing insurers, and the requirements of subdivision (c) of Section 10509.6, except that it need not maintain a replacement register. (Amended by Stats. 2017, Ch. 417, Sec. 29. (AB 1696) Effective January 1, 2018.)
  195. 10509.8.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    An agent or insurer must not use materially inaccurate comparisons when recommending replacement or conservation of an existing policy, and must not recommend an unnecessary replacement annuity to an insured age 65 or older.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.8. (a) A violation of this article shall occur if an agent or insurer recommends the replacement or conservation of an existing policy by use of a materially inaccurate presentation or comparison of an existing contract’s premiums and benefits or dividends and values, if any, or recommends that an insured 65 years of age or older purchase an unnecessary replacement annuity. (b) For purposes of this section, “unnecessary replacement” means the sale of an annuity to replace an existing annuity that requires that the insured will pay a surrender charge for the annuity that is being replaced and that does not confer a substantial financial benefit over the life of the policy to the purchaser so that a reasonable person would believe that the purchase is unnecessary. (c) Patterns of action by policyowners who purchase replacement policies from the same agent after indicating on applications that replacement is not involved, shall constitute a rebuttable presumption of the agent’s knowledge that replacement was intended in connection with the sale of those policies, and such patterns of action shall constitute a rebuttable presumption of the agent’s intent to violate this article. (d) This article does not prohibit the use of additional material other than that which is required that is not in violation of this article or any other statute or regulation. (Amended by Stats. 2003, Ch. 547, Sec. 8. Effective January 1, 2004.)
  196. 10509.9.

    ## 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. )

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    Violators of this section face administrative penalties, and the commissioner may suspend or revoke licenses after a hearing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies [10509 - 10509.9] ( Article 8 added by Stats. 1990, Ch. 963, Sec. 1. ) ## 10509.9. (a) Any agent or other person or entity engaged in the business of insurance, other than an insurer, who violates this article is liable for an administrative penalty of no less than one thousand dollars ($1,000) for the first violation. (b) Any agent or other person or entity engaged in the business of insurance, other than an insurer, 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 an administrative penalty of no less than five thousand dollars ($5,000) and no more than fifty thousand dollars ($50,000) for each violation. (c) Any insurer who violates this article is liable for an administrative penalty of ten thousand dollars ($10,000) for the first violation. (d) Any insurer 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 an administrative penalty of no less than thirty thousand dollars ($30,000) and no more than three hundred thousand dollars ($300,000) for each violation. (e) After a hearing conducted in accordance with Chapter 4.5 (commencing with Section 11400) and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, the commissioner may suspend or revoke the license of any person or entity that violates this article. (f) Nothing in this section shall be deemed to affect any other authority provided by law to the commissioner. (Amended by Stats. 2003, Ch. 546, Sec. 6. Effective January 1, 2004.)
  197. 10509.910.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. )

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    This section states that the article aims to require insurers to set up a system to supervise recommendations and to establish standards and procedures for recommendations to consumers involving annuity 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. ) ## 10509.910. The purpose of this article is to require insurers to establish a system to supervise recommendations and to set forth standards and procedures for recommendations to consumers that result in transactions involving annuity products, so that the insurance needs and financial objectives of consumers at the time of the transaction are appropriately addressed. (Added by Stats. 2011, Ch. 295, Sec. 2. (AB 689) Effective January 1, 2012.)
  198. 10509.911.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. )

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    This article applies to recommendations to buy, exchange, or replace an annuity when the recommendation results in that transaction.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. ) ## 10509.911. (a) This article shall apply to any recommendation to purchase, exchange, or replace an annuity made to a consumer that results in the purchase, exchange, or replacement that was recommended. (b) Nothing in this act shall be interpreted to preclude, preempt, or otherwise interfere with the application of any other laws of this state that may apply in any matter involving the sale of an annuity that is subject to this article. (Added by Stats. 2011, Ch. 295, Sec. 2. (AB 689) Effective January 1, 2012.)
  199. 10509.912.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. )

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    This article does not apply to several listed annuity-related transactions and funding arrangements unless they are specifically included.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. ) ## 10509.912. Unless otherwise specifically included, this article shall not apply to transactions involving any of the following: (a) Direct response solicitations where there is no recommendation based on information collected from the consumer pursuant to this article. (b) Contracts used to fund any of the following: (1) An employee pension or welfare benefit plan that is covered by the federal Employee Retirement Income Security Act (ERISA) of 1974 (29 U.S.C. Sec. 1001 et seq.). (2) A plan described by Section 401(a), 401(k), 403(b), 408(k), or 408(p) of the Internal Revenue Code (IRC), as amended, if established or maintained by an employer. (3) A government or church plan defined in Section 414 of the IRC, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax-exempt organization under Section 457 of the IRC. (4) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor. (5) Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process. (6) Formal prepaid funeral contracts. (Amended by Stats. 2012, Ch. 162, Sec. 114. (SB 1171) Effective January 1, 2013.)
  200. 10509.913.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. )

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    This section defines key terms used in the annuity suitability 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 5. General Regulation of Life Insurers [10430 - 10509.946] ( Chapter 5 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 [10509.910 - 10509.919] ( Heading of Article 9 amended by Stats. 2024, Ch. 2, Sec. 2. ) ## 10509.913. (a) “Annuity” means an annuity that is an insurance product under California law that is individually solicited, regardless of whether or not the product is classified as an individual or group annuity. (b) “Commissioner” means the Insurance Commissioner. (c) “Continuing education credit” or “CE credit” means one continuing education credit hour as defined in Section 2188.2(i) of Title 10 of the California Code of Regulations. (d) “Continuing education provider” or “CE provider” means an individual or entity that is certified to offer continuing education courses pursuant to Section 2186.1(b) and Section 2188 of Title 10 of the California Code of Regulations. (e) “Insurance producer” means a person required to be licensed under California law to sell, solicit, or negotiate insurance, including annuities. An insurance producer is also referred to in this article as a “producer.” (f) “Insurer” means a company required to be licensed or to hold a certificate of authority, or both, under California law to provide insurance products, including annuities. (g) “Recommendation” means advice or guidance provided or made by an insurance producer or by an insurer to an individual consumer that results in a purchase, exchange, or replacement of an annuity in accordance with that advice or guidance. (h) “Replacement” means a transaction in which a new policy or contract is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer, regardless of whether or not there is a producer, that by reason of the transaction, an existing policy or contract has been or is to be any of the following: (1) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated. (2) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values. (3) Amended so as to effect either a reduction in benefits or a reduction in the term for which coverage would otherwise remain in force or for which benefits would be paid. (4) Reissued with any reduction in cash value. (5) Used in a financed purchase. (i) “Suitability information” means information that is reasonably appropriate to determine the suitability of a recommendation, including all of the following: (1) Age. (2) Annual income. (3) Financial situation and needs, including the financial resources used for the funding of the annuity. (4) Financial experience. (5) Financial objectives. (6) Intended use of the annuity. (7) Financial time horizon. (8) Existing assets, including investment and life insurance holdings. (9) Liquidity needs. (10) Liquid net worth. (11) Risk tolerance. (12) Tax status. (13) Whether or not the consumer has a reverse mortgage. (14) Whether or not the consumer intends to apply for means-tested government benefits, including, but not limited to, Medi-Cal or the veterans’ aid and attendance benefit. (Amended by Stats. 2016, Ch. 148, Sec. 1. (SB 924) Effective January 1, 2017.)

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