2009 California Insurance Code - Section 10380-10390 :: Article 6. Interpretation Of Policy

10380.  The falsity of any statement in the application for any
policy covered by this chapter shall not bar the right to recovery
under the policy unless such false statement was made with actual
intent to deceive or unless it materially affected either the
acceptance of the risk or the hazard assumed by the insurer.

10381.  The following shall not operate as a waiver of any of the
rights of the insurer in defense of any claim arising under such
disability policy:
   (a) The acknowledgment by any insurer of the receipt of notice
given under any policy covered by this chapter.
   (b) The furnishing of forms for filing proofs of loss.
   (c) The acceptance of such proofs.
   (d) The investigation of any claim thereunder.

10381.5.  The insured shall not be bound by any statement made in an
application for a policy unless a copy of such application is
attached to or endorsed on the policy when issued as a part thereof.
If any such policy delivered or issued for delivery to any person in
this State shall be reinstated or renewed, and the insured or the
beneficiary or assignee of such policy shall make written request to
the insurer for a copy of the application, if any, for such
reinstatement or renewal, the insurer shall within 15 days after the
receipt of such request at its home office or any branch office of
the insurer, deliver or mail to the person making such request, a
copy of such application. If such copy shall not be so delivered or
mailed, the insurer shall be precluded from introducing such
application as evidence in any action or proceeding based upon or
involving such policy or its reinstatement or renewal.

10382.  No alteration of any written application for any disability
policy shall be made by any person other than the applicant without
his written consent except that insertions may be made by the
insurer, for administrative purposes only, in such manner as to
indicate clearly that such insertions are not to be ascribed to the
applicant. The making of any other alteration without the consent of
the applicant is a misdemeanor. If such alteration is made by any
officer of the insurer, or by any employee of the insurer with the
insurer's knowledge or consent, such alteration is deemed to be
performed by the insurer issuing the policy upon such altered
application.

10383.  If any disability policy contains a provision establishing,
as an age limit or otherwise, a date after which the coverage
provided by the policy will not be effective, and if such date falls
within a period for which premium is accepted by the insurer or if
the insurer accepts a premium after such date, the coverage provided
by the policy will continue in force subject to any right of
cancellation until the end of the period for which premium has been
accepted. In the event the age of the insured has been misstated and
if, according to the correct age of the insured, the coverage
provided by the policy would not have become effective, or would have
ceased prior to the acceptance of such premium or premiums, then the
liability of the insurer shall be limited to the refund, upon
request, of all premiums paid for the period not covered by the
policy.

10384.  No insurer issuing or providing any policy of disability
insurance covering hospital, medical, or surgical expenses shall
engage in the practice of postclaims underwriting. For purposes of
this section, "postclaims underwriting" means the rescinding,
canceling, or limiting of a policy or certificate due to the insurer'
s failure to complete medical underwriting and resolve all reasonable
questions arising from written information submitted on or with an
application before issuing the policy or certificate.

10384.17.  Notwithstanding any other provision of law, after 24
months following the issuance of an individual health insurance
policy, a health insurer shall not rescind the policy for any reason,
and shall not cancel the policy, limit any of the provisions of the
policy, or raise premiums on the policy due to any omissions,
misrepresentations, or inaccuracies in the application form, whether
willful or not. Nothing in this section shall be construed to alter
existing law that otherwise applies to a health insurer within the
first 24 months following the issuance of an individual health
insurance policy.

10385.  Compensation of a person or entity employed by, or
contracted with, a disability insurer shall not be based on, or
related in any way to, the number of policies or certificates for
health insurance that the person or entity has caused or recommended
to be rescinded, canceled, or limited, or the resulting cost savings
to the insurer. A disability insurer shall not set performance goals
or quotas, or provide compensation to any person or entity employed
by, or contracted with, the insurer, based on the number of persons
whose health insurance coverage is rescinded or any financial savings
to the insurer associated with rescission of coverage.

10390.  A policy delivered or issued for delivery to any person in
this State in violation of this chapter shall be held valid but shall
be construed as provided in this chapter. When any provision in such
a policy is in conflict with any provision of this chapter, the
rights, duties and obligations of the insurer, the insured and the
beneficiary shall be governed by this chapter.