2007 California Insurance Code Article 6.7. Joint Activities

CA Codes (ins:795-795.7)

795.  It is the purpose of this article to provide a means of more
adequately meeting the needs of persons who are 65 years of age or
older and their spouses for insurance coverage against financial loss
from accident or disease through the combined resources and
experience of a number of insurers; to make possible the fullest
extension of such coverage by encouraging insurers to combine their
resources and experience and to exercise their collective efforts in
the development and offering of policies of such insurance to all
such applicants at costs lower than those generally available through
individual insurers; and to regulate the joint activities herein
authorized in accordance with the intent of Congress as expressed in
the Act of Congress of March 9, 1945 (Public Law 15, 79th Congress),
as amended.



795.1.  Wherever used in this article, the following terms shall
have the meanings hereinafter set forth or indicated, unless the
context otherwise requires:
   (a) "Association" means a voluntary unincorporated association
formed for the purpose of enabling co-operative action to provide
disability insurance in accordance with this article in this or any
other state having legislation enabling the issuance of insurance of
the type provided in this article.
   (b) "Insurer" means any insurance company which is authorized to
transact disability insurance in this State.
   (c) "Extended health insurance" means hospital, surgical and
medical expense insurance provided by a policy issued as provided by
this article.



795.2.  Notwithstanding any other provision of this code or any
other law which may be inconsistent herewith, any insurer may join
with one or more other insurers to plan, develop, underwrite, and
offer and provide to any person who is 65 years of age or older and
to the spouse of such person, extended health insurance against
financial loss from accident or disease, or both.  Such insurance may
be offered, issued and administered jointly by two or more insurers
by a group policy issued to a policyholder through an association
formed for the purpose of offering, selling, issuing and
administering such insurance.  The policyholder may be an
association, a trustee, or any other person.  Any such policy may
provide, among other things, that the benefits payable thereunder are
subject to reduction if the individual insured has any other
coverage 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 covered expenses
which he is required to pay, and any insurer issuing individual
policies providing extended hospital, surgical or medical benefits to
persons 65 years of age and older and their spouses may also use
such a policy provision.  A master group policy issued to an
association or to a trustee or any person appointed by an association
for the purpose of providing the insurances described in this
article shall be another form of group disability insurance.
   Any form of policy approved by the commissioner for an association
shall be offered throughout California to all persons 65 and older
and their spouses, and the coverage of any person insured under such
a form of policy shall not be cancelable except for nonpayment of
premiums unless the coverage of all persons insured under such form
of policy is also canceled.



795.25.  Any association, organized in accordance with this article,
may offer, issue and administer a policy, or policies, designed to
specifically meet the requirements of any federal or state program
for provision of health care to segments of the population over 65
years of age.  In any case where such a federal or state program is
designed to also meet the health care needs of segments of the
population under age 65, including, but without limitation, the
health care needs of families with dependent children, the blind, the
disabled, and the otherwise medically indigent, insurance under such
policy or policies may be made available to beneficiaries of such
program under age 65. Such an association may also perform
administrative services in connection with any such program under
contract with the federal government, the state, any agency of
either, or any other entity.



795.3.  Notwithstanding the provisions of Section 755.5 of this
code, any person licensed to transact disability insurance as an
insurance agent, insurance broker, insurance solicitor or life agent
may transact extended health insurance and may be paid a commission
thereon in accordance with commission schedules filed with the
commissioner as required by Section 795.5 of this code.



795.4.  Any association formed for the purposes of this article may
hold title to property, may enter into contracts, and may limit the
liability of its members to their respective pro rata shares of the
liability of such association.  Any such association may sue and be
sued in its associate name and for such purpose only shall be treated
as a domestic corporation.  Service of process against such
association, made upon a managing agent, any member thereof or any
agent authorized by appointment to receive service of process, shall
have the same force and effect as if such service had been made upon
all members of the association.  Such association's books and records
shall also be subject to examination under the provisions of
Sections 730-738, inclusive, either separately or concurrently with
examination of any of its member insurers.



795.5.  The forms of the policies, applications, certificates or
other evidence of insurance coverage, commission schedules and
applicable premium rates relating thereto shall be filed with the
commissioner.  No such policy, contract, certificate or other
evidence of insurance, application or other form shall be sold,
issued or used and no endorsement shall be attached to or printed or
stamped thereon unless the form thereof shall have been approved by
the commissioner or 30 days shall have expired after such filing
without written notice from the commissioner of disapproval thereof.
The commissioner shall disapprove the forms for such insurance if he
finds that they are unjust, unfair, inequitable, misleading or
deceptive or that the rates are by reasonable assumptions excessive
in relation to the benefits provided.  In determining whether such
rates by reasonable assumptions are excessive in relation to the
benefits provided, the commissioner shall give due consideration to
past and prospective claim experience, within and outside this State,
and to fluctuations in such claim experience, to a reasonable risk
charge, to contribution to surplus and contingency funds, to past and
prospective expenses, both within and outside this State, and to all
other relevant factors within and outside this State including any
differing operating methods of the insurers joining in the issue of
the policy.  In exercising the powers conferred upon him by this
section, the commissioner shall not be bound by any other requirement
of this code with respect to standard provisions to be included in
disability policies or forms.
   The commissioner may, after hearing upon written notice, withdraw
an approval previously given, upon such grounds as in his opinion
would authorize disapproval upon original submission thereof.  Any
such withdrawal of approval after hearing shall be by notice in
writing specifying the ground thereof and shall be effective at the
expiration of such period, not less than 90 days after the giving of
notice of withdrawal, as the commissioner shall in such notice
prescribe.
   If and when a program of hospital, surgical and medical benefits
is enacted by the federal government or the State of California, the
extended health insurance benefits provided by policies issued under
this article shall be adjusted to avoid any duplication of benefits
offered by the federal or state programs and the premium rates
applicable thereto shall be adjusted to conform with the adjusted
benefits.
   The association shall submit an annual report to the Insurance
Commissioner which shall become public information and shall provide
information as to the number of persons insured, the names of the
insurers participating in the association with respect to insurance
offered under this article and the calendar year experience
applicable to such insurance offered under this article, including
premiums earned, claims paid during the calendar year, the amount of
claims reserve established, administrative expenses, commissions,
promotional expenses, taxes, contingency reserve, other expenses, and
profit and loss for the year.  The commissioner shall require the
association to provide any and all information concerning the
operations of the association deemed relevant by him for inclusion in
the report.


795.6.  The articles of association of any association formed in
accordance with this article, all amendments and supplements thereto,
a designation in writing of a resident of this State as agent for
the service of process, and a list of insurers who are members of the
association and all supplements thereto shall be filed with the
commissioner.
   The name of any association or any advertising or promotional
material used in connection with extended health insurance to be
sold, offered, or issued, pursuant to this article shall not be such
as to mislead or deceive the public.



795.7.  No act done, action taken or agreement made pursuant to the
authority conferred by this article shall constitute a violation of
or grounds for prosecution or civil proceedings under any other law
of this State heretofore or hereafter enacted which does not
specifically refer to insurance.