2007 California Insurance Code Article 1. Scope Of Chapter And Definitions

CA Codes (ins:10270-10279)

10270.  (a) This chapter shall not apply to workmen's compensation
insurance nor any policy of liability insurance with or without
supplementary coverage therein, nor any policy or contract of
reinsurance.
   (b) This chapter shall apply to selected group disability
insurance as defined in Section 10270.97, except insofar as it is
exempted from Section 10401.
   (c) This chapter shall apply to each of the types of insurance
enumerated in this subdivision which insure more than one person,
except to the extent each such type may be exempted from compliance
with particular portions of this chapter by the provisions of this
chapter relating to each such type of insurance.
   Such types of insurance which insure more than one person and
which are hereby exempted from subdivision (c) of Section 10310,
subdivision (c) of Section 10320 (but family expense disability
insurance only to the extent therein provided), and Section 10401
(but only to the extent in this chapter provided) are:
   (1) Blanket insurance, as defined in Section 10270.2.
   (2) Tuition refund insurance, as defined in Section 10270.1.
   (3) Group disability insurance, as defined in Sections 10270.5,
10270.505, and 10270.57.
   (4) Family expense disability insurance, as defined in Section
10270.7.
   (5) Unemployment compensation disability insurance as defined in
subdivision (f) of Section 10270.2.



10270.1.  (a) As used in this section:
   (1) "Institution" means any school, college or other institution
of learning or the principal or head thereof.
   "Camp" means one or more tents, vehicles, buildings or structures
together with the tract of land appertaining thereto, established or
maintained as living quarters for temporary occupancy by 10 or more
people, and shall include the principal or head thereof.
   (2) "Student" means any student or pupil or his parent, guardian
or other person who pays or becomes obligated to pay the tuition or
fee required for registration or attendance at the institution.
   "Camper" means any person or his parent, guardian or other person
who pays or becomes obligated to pay the tuition or fee required for
registration or attendance at the camp.
   (3) "Tuition refund insurance" means any policy which, because of
a student's or camper's absence from, or inability to register at or
attend, an institution or camp, as the case may be, provides for the
indemnification of the student or camper for his loss of tuition or
fee, or if he has been previously indemnified therefor by the
institution or camp, for its reimbursement.
   (b) Except to the extent provided herein, the other sections of
this chapter shall not apply to tuition refund insurance providing
coverage for ten (10) or more students or campers.
   (c) No policy of tuition refund insurance shall be delivered or
issued for delivery to any person in this State unless approved as to
substance and form by the commissioner.  The commissioner may, after
notice and hearing, promulgate such reasonable rules and
regulations, relating to the substance, form and issuance of such
policies, as are necessary or desirable to preserve, insofar as
applicable, standards as respects substance, form and issuance
comparable to the standards in such respects prescribed by this
chapter and applicable to disability policies, and to further the
purpose or purposes for which such policies are to be issued.
   (d) Tuition refund insurance may be issued only to an institution
or camp which does not have a similar policy in effect, but its cost
may be borne by the student or camper, as the case may be, in which
event he may, upon request, obtain from the insurer a copy of the
policy.


10270.2.  Blanket insurance is that form of insurance providing
coverage for specified circumstances and insuring by description all
or nearly all persons within a class of persons defined in a policy
issued to a master policyholder, and not by specifically naming the
persons covered (by certificate or otherwise, although a statement of
the coverage provided may be given, or required by the policy to be
given to persons eligible).  The permitted types of blanket insurance
are those where the blanket policy is issued to any of the
following:
   (a) A volunteer fire company providing benefits to members only in
event of accident incurred while performing actions incident to such
membership.
   (b) A college, school, or other institution of learning, a school
district or districts or school jurisdictional unit, or to the head,
principal, or governing board of any such educational unit who or
which shall be deemed the policyholder; providing benefits to
students without necessarily any restriction as to activity, time, or
place, or to teachers or employees while performing actions incident
to special duties, such as at camps, at summer playgrounds, or
during tours or excursions; and providing benefits to such students,
teachers, or employees, and spouses and dependents of such students,
teachers, and employees, for death or dismemberment resulting from
accident or for hospital, medical, surgical, drug, or nursing
expenses resulting from accident or sickness.
   (c) A proprietor or sponsor of an organized camping institution,
who shall be deemed the policyholder, providing benefits to campers
or persons responsible for their support for death or dismemberment
resulting from accident, or for hospital, medical, surgical, or
nursing expenses resulting from accident to such campers or arising
out of sickness of such campers, provided the accident or the first
manifestation of such sickness occurs while such campers are in or on
the buildings or premises of the camp institution, or being
transported between their homes and the camp institution, or while at
any other place as an incident to camp-sponsored activities or while
being transported to, from, or between such places.
   (d) To a newspaper, farm paper, magazine, or other periodical
publication, which shall be deemed the policyholder, providing
benefits for independent contractors, such as newsboys, dealers,
distributors, wholesalers, or others engaged in the sale,
distribution, collecting for, or other activities pertaining to, the
marketing and delivery of such publications, including attendance at
a coaching school or participation as a member of a trip organized,
supervised, and sponsored as a reward for meritorious service, on
account of loss resulting from accident or sickness, such benefit to
be payable to such independent contractors or to their parents,
guardians, or other persons responsible for their support.
   When the premium for the insurance is paid by the person insured,
he may, upon request, obtain from the insurer in certificate form a
copy of the policy.
   (e) Any religious, charitable, recreational, educational, athletic
or civic organization, or branch thereof, which shall be deemed the
policyholder, providing benefits to members, employees, or
participants for death or dismemberment or for hospital, medical,
surgical, or nursing expenses all resulting from accident incurred
incident to specific hazards pertaining to any activity or activities
or operations sponsored or supervised by such policyholder.
   (f) To a policy issued on application of an employer, a majority
of the employees in this state of an employer, or both, to pay the
benefits afforded by a voluntary plan of unemployment compensation
disability insurance.  Notwithstanding the provisions of Section
10113, such policies may incorporate by reference any of the
appropriate provisions of Part 2 (commencing with Section 2601) of
Division 1 of the Unemployment Insurance Code and the authorized
regulations of the Director of Employment Development.
   A "blanket policy" is any disability policy of the nature herein
described sold to any of the entities described in subdivision (a),
(b), (c), (d), (e), or (f) of this section and providing coverage for
any group of persons within permitted categories defined in the
policy.  Policies referred to in subdivision (f) shall comply with
the provisions of this section specifically referring thereto.
Policies referred to in subdivision (a), (b), (c), (d), or (e) may
provide that the cost of the insurance coverage shall be borne by
either the policyholder, or the individuals insured or their parents
or guardians, payable through the policyholder.  In the absence of a
policy provision excluding coverage for otherwise covered individuals
who have not individually enrolled with the policyholder and
undertaken to pay all or a specified portion of the premium allocable
to such individual, such policy shall provide the described
insurance for all who fall within the categories of covered
individuals defined in the policy.  Such policy may, but is not
required to, contain provisions requiring a minimum number of
participating persons or a minimum percentage of participation before
the policy is effective.  In the absence of such a provision
coverage shall not be denied any individual otherwise eligible on
those grounds.
   No policies described in subdivision (a), (b), (c), (d), or (e) of
this section shall be issued until approved as to substance and form
by the commissioner.  The commissioner may after notice and hearing
promulgate such reasonable rules and regulations, relating to the
substance, form, and issuance of such policies, as are necessary or
desirable to preserve, insofar as applicable, standards as respects
substance, form, and issuance comparable to the standards in such
respects prescribed by this chapter and applicable to other types of
disability policies, and to further the purpose or purposes for which
such policies are to be issued.
   No policies described in subdivision (f) shall be issued until
approved as to form by the commissioner.  The commissioner may after
notice and hearing promulgate such reasonable rules and regulations,
relating to the form and issuance of such policies, as do not affect
the substance of the coverage, and as are necessary or desirable to
preserve, insofar as applicable, standards as respects form and
issuance comparable to the standards in such respects prescribed by
this chapter and applicable to other types of disability policies,
and to further the purpose or purposes for which such policies are to
be issued.  Notwithstanding the provisions of Section 10113, such
policies may incorporate by reference any of the appropriate
provisions of Part 2 (commencing with Section 2601) of Division 1 of
the Unemployment Insurance Code and the authorized regulations of the
Director of Employment Development.



10270.3.  A blanket disability policy of a type permitted under
subdivision (b) or (e) of Section 10270.2 may include either a
coordination of benefits policy provision or a nonduplication of
benefits policy provision, at the option of the policyholder.
   The essential features of any such plan under subdivision (b) or
(e) shall be disclosed to the insured, or the parent or legal
guardian of the insured, prior to enrollment in any such plan.  All
such disclosures shall state whether or not the benefits payable
under such blanket insurance policy are subject to reduction, to the
extent provided in such policy, if an individual insured thereunder
is entitled to benefits, whether on an indemnity basis or on a
provision-of-service basis, for hospital, medical, dental, or
surgical expenses under any other valid and collectible individual,
group, or blanket insurance policy or contract, hospital or medical
service program, or group-practice prepayment plan, except for
automobile medical payments insurance.
   The disclosure material shall be submitted to the commissioner for
review along with the blanket insurance policy.



10270.4.  Any disability insurer may issue policies of group
disability insurance and family expense disability insurance as
defined in this article but shall not issue any form of policy of
group disability insurance, or family expense disability insurance
except as prescribed in this article and except as provided in
Article 6.7 of Chapter 1 of Part 2 of Division 1.  Provided, however,
that during the calendar years of 1952 to 1956, inclusive, a policy
of family expense disability insurance as defined in Section 10270.7
may either (1) contain the provisions required by Section 10270.8 and
those promulgated by the commissioner pursuant to Sections 10270.9
and 10270.93 and be subject to this article and to Section 10291.5 or
(2) be filed and approved under Article 2 of this chapter and be
subject to such article and to Articles 3a, 4a and 5a of this chapter
and contain the provision required by Section 10270.8(b).  On and
after January 1, 1957 the provisions of this article shall no longer
relate to such policies except Section 10270.7 and subdivision (b) of
Section 10270.8 and all of such policies shall be subject to the
provisions set forth in alternative (2) above, except that such
policies need not comply with subsection (c) of Section 10320 if they
comply with Section 10270.7.



10270.5.  Group disability insurance is that form of disability
insurance which conforms to all of the following conditions:
   (a) Written under a master policy, issued to any of the following:

   (1) The federal or state government, any federal or state agency,
political subdivision or district, any public, governmental, or
municipal corporation, any unit, agency, or department thereof, any
corporation, copartnership or individual employer, or to the trustee
of any association of employers, offering insurance to all the
employees of the employer or of the employer members of the
association or to all of any class or classes thereof determined by
conditions pertaining to employment and covering not less than two
such employees or those employees together with their dependents or
spouses for amounts of insurance based upon some plan which will
preclude individual selection by the employee as to the amount of his
or her insurance coverage thereunder.
   (2) A principal eligible to have issued to him or her a policy of
group life insurance under the provisions of Section 10203.7 and
insuring not less than two agents as defined in that section and
eligible thereunder to be insured, or those agents together with
their dependents or spouses.
   (3) Any association having a constitution and bylaws and formed
and continuously maintained in good faith for purposes other than
that of obtaining insurance, offering insurance to all the eligible
members, or class of members, of the association and covering not
less than two such members or those members together with their
dependents or spouses and not less than 25 percent of all eligible
members, or class of members, for amounts of insurance based upon
some plan which will preclude individual selection by the member as
to the amount of his or her insurance coverage thereunder. If the
master policy is to be issued to cover members of labor unions, it
may be issued to more than one such union.
   (4)  An association or a trust, or the trustees of a fund
established, created, or maintained for the benefit of members of one
or more associations. The association or associations shall have at
the outset a minimum membership of 100 persons, and shall be
organized and maintained in good faith for purposes other than that
of obtaining insurance. The association or associations shall have
been in active existence for at least two years, and shall have a
constitution and bylaws which require regular meetings not less than
annually to further purposes of the members. The members shall have
voting privileges and representation on the governing board or boards
and committees. The policy shall be subject to the following
requirements:
   (A) The policy may insure members of the association or
associations, and employees thereof.
   (B) The premium for the policy shall be paid from funds
contributed by the association or associations, or by members, or by
both, or from funds contributed by the covered persons, or from both
the covered persons and the association.
   (C) A policy on which no part of the premium is to be derived from
funds contributed by the covered persons specifically for the
insurance shall insure all eligible persons, except those who, in
writing, reject the coverage.
   (5)  Any trustees eligible to have issued to them a policy of
group life insurance under the provisions of Section 10202.8 and
insuring not less than two employees or members eligible thereunder
to be insured or those employees or members together with their
dependents or spouses.
   (6)  A school district or districts, the governing board of any
school district or districts, a private or parochial school or
schools, or the governing board or person in charge of the operation
of any private or parochial school or schools, insuring not less than
50 pupils of the school or district and providing benefits to pupils
or persons responsible for their support for death or dismemberment
resulting from accident or for hospital, medical and surgical
expenses resulting from accident to those pupils while they are in or
on buildings or premises of the schools or districts during the time
the pupils are required to be therein or thereon by reason of their
attendance upon a college or a regular day school or any regular day
school of a school district or districts or while being transported
by the school or schools or district or districts to and from school
or other place of instruction or while at any other place as an
incident to school-sponsored activities and while being transported
to, from and between these places.
   (b) Transmission or collection of all premiums or premium
contributions shall be performed by the policyholder, except where
the policy specifies the persons other than the policyholder by whom
the transmission or collection shall be made, and in one of the
following situations:
   (1) If the policy covers the employees of more than one employer,
the insurer may collect premium contributions from individual
employers whose employees are insured or may assist the policyholder
in making these collections. If the employees of more than 100 such
employers are covered under that policy, it shall state as a separate
part of the premium to be charged for the policy the amount to be
charged by the insurer for the collection.
   (2) If the policy covers a group of governmental employees and the
governmental unit paying those employees will not transmit their
premium contribution after payroll deduction, the insurer may collect
from the individual employees. If more than 100 of these employees
are covered under that policy, it shall state as a separate part of
the premium to be charged for the policy the amount to be charged by
the insurer for the collection.
   (3) If individual members of the group make payment of their share
of the premium contribution to the insurer with or without billing
or solicitation by the insurer during a period of temporary absence
from active work of not exceeding 90 days, the payment may be
received without the necessity of any separately stated charge by the
insurer.
   (4) If the policy covers the members of an association, the
insurer may collect premium contributions from individual members or
may assist the policyholder in making these collections. If more than
100 such members are covered under that policy, it shall state as a
part of the premium to be charged for the policy the amount to be
charged by the insurer for the collection.
   (c) There is issued and delivered in accordance with the policy
provision required by subdivision (b) of Section 10270.6 an
individual certificate setting forth the benefits and the exceptions
under, and referring to, the master policy under which the
certificate is issued.
   Those certificates are not subject to the provisions of this
chapter relating to the master policy, but the forms thereof shall be
submitted to the commissioner for his or her approval and shall not
be issued without approval of the forms in the manner provided in the
case of the master policy.


10270.505.  Another permitted form of group disability insurance is
that which conforms to all of the following conditions.
   (1) Covering debtors who are or become obligated to repay an
indebtedness in substantially equal installments, or to repay a
portion of an indebtedness in substantially equal installments over a
year or more and repay a final balance in any amount on a date
certain thereafter, to one creditor, as "creditor" is defined in
subdivision (3) of Section 779.2.
   (2) The group numbers not less than 10 new entrants yearly.
   (3) The amounts insured on any one debtor do not exceed those
permitted by Section 779.4.
   (4) The policy is issued upon application of and made payable to
the creditor or his successor in interest and such alternate
beneficiaries as are required by Article 5.9 (commencing with Section
779.1) of Chapter 1 of Part 2 of Division 1, and the premiums are
paid by or through the creditor.
   A policy issued under this section shall conform to all applicable
provisions of this code.



10270.507.  Except as provided in Section 10195 with respect to
regulation of group Medicare supplemental insurance, and provisions
of law regulating group long-term care insurance, no certificate of
group disability insurance advertised or marketed to persons in this
state shall be issued or delivered on or after January 1, 1989, to
any person 55 years of age or older in this state pursuant to a group
master insurance policy issued or delivered in another state unless
the certificate and master policy have been filed with, and approved
by, the commissioner.
   This section does not apply to policies issued to one or more
employers or labor organizations, or to the trustees of funds
established by one or more employers or labor organizations, or
combination thereof, for employees or former employees, or
combination thereof, or for members or former members, or combination
thereof, of the labor organization.
   The commissioner shall adopt regulations necessary to interpret
and implement this section.


10270.51.  The state and any political subdivisions thereof and any
municipality, may provide for the type of insurance set forth in
Section 10270.5 of this code the same as any private employer and may
contribute to a fund established under such section the same as any
private employer.
   A county may include as persons eligible under its master policy
issued pursuant to Section 10270.5, employees of a district located
wholly or partially within the county.  Such inclusion of district
employees is subject to Section 53200.4 of the Government Code.



10270.55.  (a) With respect to a policy issued to a corporation,
copartnership or individual employer eligible for group insurance
pursuant to Section 10270.5, the term "employees" may be deemed to
include the officers, managers and employees of subsidiary or
affiliated corporations, and the individual proprietors, partners and
employees of affiliated individuals and firms, when the business of
such subsidiary or affiliated corporations, firms or individuals is
controlled by the policyholder through stock ownership, contract or
otherwise, or when the policyholder is controlled by affiliated
corporations, firms or individuals through stock ownership, contract
or otherwise.
   (b) With respect to a policy issued to a copartnership or
individual employer pursuant to Section 10270.5, the term "employees"
may be deemed to include the individual proprietor or partners of
the policyholder.
   (c) With respect to a policy issued to a trust pursuant to
subdivisions (1) or (4) of subsection (a) of Section 10270.5 the term
"employees" may be deemed to include (1) the individual proprietors
and partners of any employers which are individual proprietors or
partnerships, (2) the employees of an association and (3) the
trustee, or trustees, or the employees of the trustee, or trustees,
or both, if their duties are principally connected with such
trusteeship.
   (d) With respect to a policy issued to an association pursuant to
subdivision (3) of subsection (a) of Section 10270.5 the term
"members" may be deemed to include the employees of the association.

   (e) Nothing contained herein shall permit a director of a
corporate employer to become insured under a group policy unless such
person is otherwise eligible as a bona fide employee of the
corporation by performing services other than the usual duties of a
director.
   (f) Nothing contained herein shall permit an individual proprietor
or partner to become insured under a group policy unless he is
actively engaged in and devotes a substantial part of his time to the
conduct of the business of the proprietor or partnership.
   (g) Nothing contained herein shall permit any employee to become
insured under a group policy unless he is an officer, manager, or
employee for compensation of the employer to whom a group policy is
issued, or of one or more of the individuals, firms, or corporations
specified in subdivision (a), or of the association or trustee or
trustees specified in subdivision (c), or of the association
specified in subdivision (d).
   (h) Officers, managers, and employees of a public agency who
receive no compensation may be insured under a group policy purchased
pursuant to the provisions of Article 1 (commencing with Section
53200) of Chapter 2, Part 1, Division 2, Title 5 of the Government
Code.



10270.57.  Another form of group disability insurance is that form
of disability insurance conforming to the following conditions:
   (a) Written under a master policy issued to the trustee of any
self-employed individuals, whether or not they have any employees,
all of whom have contracts with the same publisher of a newspaper,
for the performance of services for such publisher as independent
contractors, offering insurance to such self-employed individuals and
to all the employees of any such persons and covering not less than
10 such self-employed individuals and their employees or such
individuals and their employees together with their dependents or
spouses for amounts of insurance based upon some plan which will
preclude individual selection by the eligible person as to the amount
of his insurance coverage thereunder;
   (b) For delivery to each person insured thereunder, other than
dependents or spouses of an insured employee or person, there is
issued to the holder of the master policy by the insurer an
individual certificate setting forth the benefits and the exceptions
under, and referring to, the master policy under which the
certificate is issued.
   Such certificates are not subject to the provisions of this
chapter relating to the master policy, but the forms thereof shall be
submitted to the commissioner for his approval and shall not be
issued without such approval of such forms in the manner provided in
the case of the master policy.



10270.6.  Every group disability master policy shall contain the
following provisions:
   (a) A provision that the policy, the application of the
policyholder and the individual applications, if any, of the
individuals insured shall constitute the entire contract between the
parties, and that all statements made by the policyholder, or by the
individuals insured shall, in the absence of fraud, be deemed
representations and not warranties, and that no such statement shall
be used in defense to a claim under the policy, unless it is
contained in a written application;
   (b) A provision that the insurer will issue to the policyholder
for delivery to the individuals insured under such policy, an
individual certificate setting forth a statement as to the insurance
protection to which he is entitled and to whom payable;
   (c) A provision that to the group or class thereof originally
insured shall be added from time to time all new employees, members
or pupils of the policyholder eligible to and applying for insurance
in such group or class;
   (d) A statement that such policy is not in lieu of and does not
affect any requirement for coverage by workmen's compensation
insurance.


10270.63.  An individual certificate shall be individualized, except
that in the case of an individual certificate under a group policy
which requires no regular contribution toward the payment of the
premium to be made by the individuals covered thereunder, such
individual certificate need not be individualized if it is in a form
setting forth a clear statement of the conditions of eligibility from
which the person covered can determine the circumstances under which
he is insured under the master policy.
   An individual certificate shall be deemed to be "individualized,"
within the meaning of this section, if it contains either the name of
the person covered or some other means of identifying to the
individual covered that it is his individual certificate.



10270.65.  If hereafter any dividend is paid or any premium refunded
under any policy of group disability insurance heretofore or
hereafter issued, the excess, if any, of the aggregate dividends or
premium refunds under such policy over the aggregate expenditures for
insurance under such policy made from funds contributed by the
policyholder, or by an employer of such insured persons or by union
or association to which insured persons belong, including
expenditures made in connection with the administration of such
policy, shall be applied by the policyholder for the benefit of such
insured employees generally or their dependents or insured members
generally or their dependents.  For the purpose of this section and
at the option of the policyholder, "policy" may include all group
life and disability insurance policies of the policyholder.



10270.7.  Family expense disability insurance is that form of
disability insurance insuring more than one person and issued to the
head of a family or his spouse indemnifying him, or his spouse, or
both, against loss due to disability of one or more persons dependent
at the time of issuance upon him, or his spouse, or both, and may
include indemnification on account of his own disability and
disability of his spouse whether or not either is dependent on the
other.
   Where such a policy provides for payment for expenses incurred,
expenses incurred by or upon behalf of any person covered by the
policy shall be deemed incurred by the person to whom or at whose
direction benefits are payable under the policy.
   No question as to whether or not any person is the head of the
family or his spouse, or is a child or dependent of either shall
relieve the insurer of any liability it otherwise would have under
the policy.
   Where such a policy indemnifies a spouse alone or a spouse and the
head of the family, references in the policy to the head of the
family shall be deemed to refer to or include the spouse.




10270.8.  Family expense disability policies shall also contain the
following provisions:
   (a) A provision that the policy and the application, if any, of
the head of the family shall constitute the entire contract between
the parties, and that all statements made by the head of the family
shall, in the absence of fraud, be deemed representations and not
warranties, and that no statement shall be used in defense to a claim
under the policy, unless it is contained in a written application;
   (b) A provision that to the family originally insured may be added
from time to time all new members of the family eligible for
insurance in such family; and that the head of the family shall give
the insurer notice of the addition to the family of any person
eligible for coverage under the policy.



10270.9.  No group disability policy shall be issued or delivered in
this state nor, except as otherwise provided in Sections 10270.91
and 10270.98, shall an insurer provide or agree to provide group
disability coverage until a copy of the form of the policy is filed
with the commissioner and approved by him in accordance with Article
2 of this chapter as meeting in substance the reasonably applicable
provisions and requirements of either Articles 3, 4 and 5 of this
chapter or Articles 3a, 4a and 5a of this chapter; provided, however,
that the insurer may, at its option, substitute for one or more of
such provisions of Articles 4a and 5a corresponding provisions of
different wording approved by the commissioner which are in each
instance not less favorable in any respect to the policyholder, the
certificate holder or the beneficiary.  On and after January 1, 1957,
no group disability policy shall be issued or delivered in this
state unless the form thereof has been approved, as required by this
section, as meeting in substance the provisions and requirements of
Articles 3a, 4a and 5a of this chapter which are reasonably
applicable; provided, however, that the insurer may, at its option,
substitute for one or more of such provisions of Articles 4a and 5a
corresponding provisions of different wording approved by the
commissioner which are in each instance not less favorable in any
respect to the policyholder, the certificate holder or the
beneficiary.
   Except as provided by Section 10314, no group disability policy
shall be issued or delivered to any person in this state nor shall
any endorsement for any such policy be issued which contains any
provision contradictory, in whole or in part, of any of the
provisions promulgated by the commissioner as being required or
optional or alternative provisions to be incorporated into such
policy in accordance with the rules promulgated by him for their use.




10270.91.  An insurer is permitted to provide group disability
coverage prior to the approval of the form of the policy if all of
the conditions of (a) are met prior thereto and if thereafter it acts
as required by (b).
   (a) The conditions precedent are:
   (1) The group is one eligible for coverage pursuant to the
provisions of this article; and
   (2) An executed memorandum of insurance has been or is
concurrently delivered to the entity which is to become the
policyholder containing a provision that unless a policy the form of
which has been approved by the commissioner and embodying the
coverage has been issued and delivered to the policyholder within 90
days after the date on which the coverage is provided or agreed to be
provided, the coverage provided pursuant to such memorandum
terminates 120 days after such date, and containing a specification
in either complete or summary form of:
   (i) The class or classes of employees eligible for coverage;
   (ii) The benefits to be provided; and
   (iii) The exceptions and reductions to such benefits, if any.
   (b) An insurer providing coverage pursuant to this section shall:

   (1) Within 60 days after the date on which the coverage is
provided or agreed to be provided submit to the commissioner for
approval a policy form drafted to provide the coverage provided by
such memorandum and in a good faith attempt to meet all requirements
of law;
   (2) Make such revisions in the policy submitted as the
commissioner may lawfully require; and
   (3) Terminate such coverage in accordance with the provisions of
(a) (2) above if approval of such policy is not secured within the
time specified therein.
   Upon written request from the insurer filed within 50 days after
the date on which the coverage is provided or agreed to be provided
and upon proof satisfactory to him that the insurer is acting with
due diligence and that hardship will result unless an extension is
granted, the commissioner may extend the time set forth in (b) (1)
hereof for a period of not to exceed 30 days.  Upon such extension,
the insurer with the consent of the policyholder may amend the
memorandum of insurance referred to in (a) (2) hereof to extend the
time within which the policy must be issued and delivered to the
policyholder to 30 days after the date to which the commissioner has
extended the time within which a policy form must be submitted to him
for approval and to extend the date for termination of coverage to
30 days thereafter.
   Any policy submitted to the commissioner with a letter from the
insurer stating that coverage has been provided in accordance with
this section shall be automatically approved unless the commissioner
disapproves the same within 30 days of the date of its submission to
him.


10270.92.  The commissioner may suspend or revoke the permission
granted any insurer in Section 10270.91 if, after notice and hearing
in accordance with Chapter 5 of Part 1 of Division 3 of Title 2 of
the Government Code, he finds that the insurer has:
   (a) Misrepresented the conditional nature of the coverage;
   (b) Neglected or refused either to cancel or otherwise terminate
such coverage within the time required by such section;
   (c) Delivered any such memorandum which did not comply with
subsection (a) (2) of Section 10270.91;
   (d) Shown a lack of diligence in making revisions in the policy
necessary to obtain its approval by the commissioner;
   (e) Failed so often in so many important respects in drafting any
such policy to conform to the applicable requirements of the
Insurance Code that a conclusion of lack of good faith or competency
in drafting is reasonably justified;
   (f) Circulated announcements of coverage to individuals insured
which failed to advise them of the conditional nature of the
coverage; or
   (g) In any other manner so negligently or carelessly handled the
effecting of insurance under Section 10270.91 or the administration
thereof that the policyholder or the persons insured have been misled
or exposed to the danger of loss.



10270.93.  No family expense disability policy shall be issued or
delivered in this State unless a copy of the form thereof is filed
with the commissioner and approved by him in accordance with Article
2 of this chapter as meeting in substance either the provisions and
requirements of Articles 3, 4 and 5 of this chapter which are
reasonably applicable, or the provisions and requirements of Articles
3a, 4a and 5a of this chapter which are reasonably applicable;
provided, however, that the insurer may, at its option, substitute
for one or more of such provisions of Articles 4a and 5a
corresponding provisions of different wording approved by the
commissioner which are in each instance not less favorable in any
respect to the insured or the beneficiary.
   Except as provided by Section 10314, no family expense disability
policy shall be issued or delivered to any person in this State nor
shall any endorsement for any such policy be issued which contains
any provision contradictory, in whole or in part, of any of the
provisions promulgated by the commissioner as being required or
optional or alternative provisions to be incorporated into such
policy, except a policy or endorsement which has been approved by the
commissioner under Article 2 of this chapter as meeting the
applicable requirements of Articles 2, 3a, 4a and 5a of this chapter
and as containing the provisions or substitute provisions as required
by Articles 4a and 5a of this chapter modified in such manner as to
make the provisions consistent with family expense coverage and the
coverage provided in the policy and endorsement, if any.  On and
after January 1, 1957, no family expense disability policy shall be
delivered or issued for delivery to any person in this State unless
it complies with Articles 2, 3a, 4a and 5a of this chapter.



10270.94.  The commissioner shall promulgate forms of provisions
which incorporate in substance the applicable provisions set forth in
Articles 4 (commencing with Section 10329), 4a (commencing with
Section 10350), 5 (commencing with Section 10359), and 5a (commencing
with Section 10369.1), and shall promulgate rules governing the use
of those provisions, incorporating the substance, insofar as
applicable, of the corresponding rules contained in this chapter for
the use of the provisions set forth in Articles 4, 4a, 5, and 5a.
However, as of January 1, 1957, the promulgation of provisions and
rules governing their use incorporating in substance the applicable
provisions of Articles 3 (commencing with Section 10309), 4
(commencing with Section 10329), and 5 (commencing with Section
10359) shall cease to be effective, and on and after January 1, 1957,
only the promulgation of provisions and rules governing their use
incorporating in substance the applicable provisions of Articles 3a
(commencing with Section 10320), 4a (commencing with Section 10350),
and 5a (commencing with Section 10369.1) shall be effective.  The
commissioner may from time to time thereafter change any such
provisions or rules governing their use previously promulgated by him
or her.  The promulgation of any such provisions or rules governing
their use and of any changes or amendments thereof shall be in
accordance with the procedure provided in Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code.



10270.95.  Without affecting the applicability or degree of
applicability of other sections of this chapter, it is hereby
specified that the provisions of Sections 10321, 10325, 10401, of
subdivisions (a), (c), (e), (h) and (i) of Section 10320, of
subdivision (a) of Section 10290, of paragraphs (2), (3), (4), (5),
(6), (7), (8), (9), (10), (11) and (12) of subdivision (b) and
subdivisions (e), (f), (g), (h), (i), and (k) of Section 10291.5 and
of Section 10291.6, shall not apply to group disability insurance.
The provisions of Section 10401 shall not apply to family expense
disability insurance; provided, there is no discrimination between
families of the same class.



10270.97.  Selected group disability insurance is that form of
disability insurance conforming to the following conditions:
   (a) Written under individual policies
   (1) Issued to not less than three employees of the federal or
state government, or of any federal or state agency, political
subdivision or district, or of any public, governmental, or municipal
corporation, or of any unit, agency, or department thereof, or of
any corporation, copartnership or individual employer; or
   (2) Issued to not less than three members of any association,
which shall have been in existence for at least two years, having a
constitution and bylaws and formed and continuously maintained in
good faith for purposes other than that of obtaining insurance; and
   (3) For amounts of insurance based upon individual selection by
the insured employee or member, as the case may be.
   (b) Notwithstanding the provisions of Section 10401 insurers may
be permitted  to file (for use in connection with selected group
disability insurance), rate schedules that reflect a differential
from the rates charged for identical policies issued on the
individual basis, provided they do not make or permit any
discrimination between selected groups.



10270.98.  Group disability policies may provide, among other
things, that the benefits payable thereunder are subject to reduction
if the individual insured has any other coverage (other than
individual policies or contracts) providing hospital, surgical or
medical benefits, whether on an indemnity basis or a provision of
service basis, resulting in such insured being eligible for more than
100 percent of the covered expenses.
   Except as permitted by this section and by Section 10323, 10369.5,
10369.6, or 11515.5, and except in the case of group practice
prepayment plan contracts which do not provide for coordination of
benefits, to the extent they provide for a reduction of benefits on
account of other coverage with respect to emergency services that are
not obtained from providers that contract with the plan, no group or
individual disability insurance policy or service contract issued by
nonprofit hospital service plans operating under Chapter 11A
(commencing with Section 11491) of Part 2 of Division 2 shall limit
payment of benefits by reason of the existence of other insurance or
service coverage.
   The policy provisions authorized by this section shall contain a
provision that payments of funds may be made directly between
insurers and other providers of benefits.  Such policy provisions
shall also contain a provision that if benefits are provided in the
form of services rather than cash payments the reasonable cash value
of each service rendered shall be deemed to be both an allowable
expense and a benefit paid.  The reasonable cash value of any
contractual benefit provided to the insured in the form of service
rather than cash payment by or through any hospital service
organization or medical service organization or group-practice
prepayment plan shall be deemed an expense incurred by the insured
for such service, whether or not actually incurred, and the liability
of the insurer shall be the same as if the insured had not been
entitled to any such service benefit, unless the policy contains a
provision authorized by Section 10323, 10369.5 or 10369.6 in the case
of an individual disability policy, or by this section, in the case
of a group disability policy.
   This section shall not be construed to require that benefits
payable under group disability policies be subject to reduction by
the benefit amounts payable under Chapter 3 (commencing with Section
2800) of Part 2 of Division 1 of the Unemployment Insurance Code.
   The provisions of this section, and all regulations adopted
pursuant thereto pertaining to coordination of benefits with other
group disability benefits, shall apply to all employers,
labor-management trustee plans, union welfare plans (including those
established in conformity with 29 U.S.C. Sec.  186), employer
organization plans or employee benefit organization plans, health
care service plan contracts, pursuant to regulations adopted by the
Director of the Department of Managed Health Care which shall be
uniform with those issued under this section for those plans that
elect to coordinate benefits, group practice, individual practice,
any other prepayment coverage for medical or dental care or
treatment, and administrators, within the meaning of Section 1759 not
otherwise subject to the provisions of this section whenever such
plan, contract or practice provides or administers hospital,
surgical, medical or dental benefits to employees or agents who are
also covered under one or more additional group disability policies
which are subject to this section or health care service plans.



10270.99.  The term "individual policies or contracts," as used in
the first paragraph of Section 10270.98, does not include selected
group disability policies or contracts, unless those policies or
contracts are noncancelable or guaranteed renewable and solely
provide hospital confinement indemnity or specified disease coverage.




10271.  Except as provided in Section 10292, this chapter shall not
apply to or in any way affect life insurance, endowment or annuity
contracts or contracts supplemental thereto which contain only such
provisions relating to disability insurance as (a) provide additional
benefits in case of death or dismemberment or loss of sight by
accident or as (b) operate to safeguard such contracts against lapse,
or to give a special surrender value, or special benefit, or an
annuity, in the event that the insured or annuitant shall become
totally and permanently disabled as defined by the contract or
supplemental contract.


10272.  The term "indemnity," as used in this chapter means benefits
promised.


10273.  The term "noncancelable policy" or "noncancelable and
guaranteed renewable policy" as used in this chapter means a policy
which the insured has the right to continue in force subject to its
terms by the timely payment of premiums in the amount originally set
forth in the policy (a) until at least age 50, or (b) in the case of
a policy issued after age 44, for at least five years from its date
of issue, during which period the insurer has no right to make
unilaterally any change in any provision of the policy while the
policy is in force.  Such a policy may use any of the provisions in
Section 10291.6, 10350.2, 10350.4 or 10369.7, which may be used in
noncancelable policies.



10273.3.  The term "guaranteed renewable policy" as used in this
chapter (commencing with Section 10270) means a policy which the
insured has the right to continue in force subject to its terms by
the timely payment of premium (a) until at least age 50, or (b) in
the case of a policy issued after age 44, for at least five years
from its date of issue during which period the insurer has no right
to make unilaterally any change in any provision of the policy while
the policy is in force, except that the insurer may, in accordance
with the provisions of the policy, make changes in premium rates as
to all insureds who were placed in the same class for purposes of
rate determination in the process of issuance of the policy or making
it guaranteed renewable.  Such a policy may use any of the
provisions in Section 10291.6, 10350.2, 10350.4 or 10369.7, which may
be used in noncancelable policies.



10273.4.  All disability insurers writing, issuing, or administering
group health benefit plans shall make all of these health benefit
plans renewable with respect to the policyholder, contractholder, or
employer except in case of the following:
   (a) Nonpayment of the required premiums by the policyholder,
contractholder, or employer.
   (b) Fraud or other intentional misrepresentation by the
policyholder, contractholder, or employer.
   (c) Noncompliance with a material health benefit plan contract
provision.
   (d) The insurer ceases to provide or arrange for the provision of
health care services for new group health benefit plans in this
state, provided that the following conditions are satisfied:
   (1) Notice of the decision to cease writing, issuing, or
administering new or existing group health benefit plans in this
state is provided to the commissioner and to either the policyholder,
contractholder, or employer at least 180 days prior to
discontinuation of that coverage.
   (2) Group health benefit plans shall not be canceled for 180 days
after the date of the notice required under paragraph (1) and for
that business of a plan that remains in force, any disability insurer
that ceases to write, issue, or administer new group health benefit
plans shall continue to be governed by this section with respect to
business conducted under this section.
   (3) Except as provided under subdivision (h) of Section 10705, or
unless the commissioner had made a determination pursuant to Section
10712, a disability insurer that ceases to write, issue, or
administer new group health benefit plans in this state after the
effective date of this section shall be prohibited from writing,
issuing, or administering new group health benefit plans to employers
in this state for a period of five years from the date of notice to
the commissioner.
   (e) The disability insurer withdraws a group health benefit plan
from the market; provided, that the plan notifies all affected
contractholders, policyholders, or employers and the commissioner at
least 90 days prior to the discontinuation of the health benefit
plans, and that the insurer makes available to the contractholder,
policyholder, or employer all health benefit plans that it makes
available to new employer business without regard to the claims
experience of health-related factors of insureds or individuals who
may become eligible for the coverage.
   (f) For the purposes of this section, "health benefit plan" shall
have the same meaning as in subdivision (a) of Section 10198.6 and
Section 10198.61.
   (g) For the purposes of this section, "eligible employee" shall
have the same meaning as in Section 10700, except that it applies to
all health benefit plans issued to employer groups of two or more
employees.



10273.5.  No person shall cause or permit to be issued, circulated
or used any representation that a policy defined in Section 10273.3
is "non-can," noncancelable (not cancelable) or noncancelable and
guaranteed renewable.
   No person shall cause or permit to be issued, circulated or used
any representation concerning the right to continue a policy such as
is defined in Section 10273.3 unless such representation contains a
declaration of the terms under which the insurer has reserved the
right to change the premium in a manner which shall not minimize or
obscure the same.
   Any person knowingly violating any provision of this section shall
be subject to the penalties provided for misrepresentation by this
code.



10273.6.  All individual health benefit plans, except for short-term
limited duration insurance, shall be renewable with respect to all
eligible individuals or dependents at the option of the individual
except as follows:
   (a) For nonpayment of the required premiums or contributions by
the individual in accordance with the terms of the health insurance
coverage or the timeliness of the payments.
   (b) For fraud or intentional misrepresentation of material fact
under the terms of the coverage by the individual.
   (c) Movement of the individual contractholder outside the service
area but only if coverage is terminated uniformly without regard to
any health status-related factor of covered individuals.
   (d) If the disability insurer ceases to provide or arrange for the
provision of health care services for new individual health benefit
plans in this state; provided, however, that the following conditions
are satisfied:
   (1) Notice of the decision to cease new or existing individual
health benefit plans in this state is provided to the commissioner
and to the individual policy or contractholder at least 180 days
prior to discontinuation of that coverage.
   (2) Individual health benefit plans shall not be canceled for 180
days after the date of the notice required under paragraph (1) and
for that business of a disability insurer that remains in force, any
disability insurer that ceases to offer for sale new individual
health benefit plans shall continue to be governed by this section
with respect to business conducted under this section.
   (3) A disability insurer that ceases to write new individual
health benefit plans in this state after the effective date of this
section shall be prohibited from offering for sale individual health
benefit plans in this state for a period of five years from the date
of notice to the commissioner.
   (e) If the disability insurer withdraws an individual health
benefit plan from the market; provided, that the disability insurer
notifies all affected individuals and the commissioner at least 90
days prior to the discontinuation of these plans, and that the
disability insurer makes available to the individual all health
benefit plans that it makes available to new individual businesses
without regard to a health status-related factor of enrolled
individuals or individuals who may become eligible for the coverage.




10274.  The term "endorsement" as used in this chapter means any
amendment, change, limitation, alteration or restriction of the
printed text of a policy by a rider upon a separate piece of paper
made a part of such policy.


10275.  The term "policy of accident and sickness insurance" as used
in this chapter includes any policy or contract covering the kind or
kinds of insurance described in Section 106.



10276.  Every individual accident and health policy or contract,
except single premium nonrenewable policies or contracts, issued for
delivery in this state on or after July 1, 1962, by an insurance
company, nonprofit hospital service plan or medical service
corporation, shall have printed thereon or attached thereto a notice
stating that the person to whom the policy or contract is issued
shall be permitted to return the policy or contract after its
delivery to the purchaser and to have the premium paid refunded if,
after examination of the policy or contract, the purchaser is not
satisfied with it for any reason.  The period time set forth by the
insurer, nonprofit hospital service plan or medical service
corporation for return of the policy or contract shall be clearly
stated on the notice and such period shall not be less than 10 days
nor more than 30 days.   The policyholder or purchaser may return the
policy or contract to the insurer, plan or corporation at any time
during the period specified in the notice.  If a policyholder or
purchaser pursuant to such notice, returns the policy or contract to
the company or association at its home or branch office or to the
agent through whom it was purchased, it shall be void from the
beginning and the parties shall be in the same position as if no
policy or contract had been issued.
   This section shall apply to all policies or contracts subject to
this section and issued, amended, delivered, or renewed in this state
on or after January 1, 1981.  All policies or contracts subject to
this section which are in effect on January 1, 1981, shall be
construed to be in compliance with this section, and any provision in
any such policy or contract which is in conflict with this section
shall be of no force or effect.



10277.  (a) A group health insurance policy that provides that
coverage of a dependent child of an employee or other member of the
covered group shall terminate upon attainment of the limiting age for
dependent children specified in the policy, shall also provide that
attainment of the limiting age shall not operate to terminate the
coverage of the child while the child is and continues to meet both
of the following criteria:
   (1) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
   (2) Chiefly dependent upon the employee or member for support and
maintenance.
   (b) The insurer shall notify the employee or member that the
dependent child's coverage will terminate upon attainment of the
limiting age unless the employee or member submits proof of the
criteria described in paragraphs (1) and (2) of subdivision (a) to
the insurer within 60 days of the date of receipt of the
notification. The insurer shall send this notification to the
employee or member at least 90 days prior to the date the child
attains the limiting age. Upon receipt of a request by the employee
or member for continued coverage of the child and proof of the
criteria described in paragraphs (1) and (2) of subdivision (a), the
insurer shall determine whether the dependent child meets that
criteria before the child attains the limiting age. If the insurer
fails to make the determination by that date, it shall continue
coverage of the child pending its determination.
   (c) The insurer may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under subdivision (a), but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
   (d) If the employee or member changes carriers to another insurer
or to a health care service plan, the new insurer or plan shall
continue to provide coverage for the dependent child. The new plan or
insurer may request information about the dependent child initially
and not more frequently than annually thereafter to determine if the
child continues to satisfy the criteria in paragraphs (1) and (2) of
subdivision (a). The employee or member shall submit the information
requested by the new plan or insurer within 60 days of receiving the
request.


10278.  (a) An individual health insurance policy that provides that
coverage of a dependent child shall terminate upon attainment of the
limiting age for dependent children specified in the policy, shall
also provide that attainment of the limiting age shall not operate to
terminate the coverage of the child while the child is and continues
to meet both of the following criteria:
   (1) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
   (2) Chiefly dependent upon the policyholder or subscriber for
support and maintenance.
   (b) The insurer shall notify the policyholder or subscriber that
the dependent child's coverage will terminate upon attainment of the
limiting age unless the policyholder or subscriber submits proof of
the criteria described in paragraphs (1) and (2) of subdivision (a)
to the insurer within 60 days of the date of receipt of the
notification. The insurer shall send this notification to the
policyholder or subscriber at least 90 days prior to the date the
child attains the limiting age. Upon receipt of a request by the
policyholder or subscriber for continued coverage of the child and
proof of the criteria described in paragraphs (1) and (2) of
subdivision (a), the insurer shall determine whether the dependent
child meets that criteria before the child attains the limiting age.
If the insurer fails to make the determination by that date, it shall
continue coverage of the child pending its determination.
   (c) The insurer may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under subdivision (a), but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
   (d) If the subscriber or policyholder changes carriers to another
insurer or to a health care service plan, the new insurer or plan
shall continue to provide coverage for the dependent child. The new
plan or insurer may request information about the dependent child
initially and not more frequently than annually thereafter to
determine if the child continues to satisfy the criteria in
paragraphs (1) and (2) of subdivision (a). The subscriber or
policyholder shall submit the information requested by the new plan
or insurer within 60 days of receiving the request.



10279.  (a) Every disability insurer that provides group or
individual policies of disability, or both, that provides, operates,
or contracts for, telephone medical advice services to its insureds
shall do all of the following:
   (1) Ensure that the in-state or out-of-state telephone medical
advice service is registered pursuant to Chapter 15 (commencing with
Section 4999) of Division 2 of the Business and Professions Code.
   (2) Ensure that the staff providing telephone medical advice
services for the in-state or out-of-state telephone medical advice
service hold a valid California license as a registered nurse or a
valid license in the state within which they provide telephone
medical advice services as a physician and surgeon or physician
assistant and are operating consistent with the laws governing their
respective scopes of practice.
   (3) Ensure that a physician and surgeon is available on an on-call
basis at all times the service is advertised to be available to
enrollees and subscribers.
   (4) Ensure that the in-state or out-of-state telephone medical
advice service designates an agent for service of process in
California and files this designation with the commissioner.
   (5) Require that the in-state or out-of-state telephone medical
advice service makes and maintains records for a period of five years
after the telephone medical advice services are provided, including,
but not limited to, oral or written transcripts of all medical
advice conversations with the disability insurer's insureds in
California and copies of all complaints.  If the records of telephone
medical advice services are kept out of state, the insurer shall,
upon the request of the director, provide the records to the director
within 10 days of the request.
   (6) Ensure that the telephone medical advice services are provided
consistent with good professional practice.
   (b) The commissioner shall forward to the Department of Consumer
Affairs, within 30 days of the end of each calendar quarter, data
regarding complaints filed with the department concerning telephone
medical advice services.