2011 California Code
Insurance Code
DIVISION 2. CLASSES OF INSURANCE [1880 - 12865]
ARTICLE 4. Implementation
Section 10235.52
(a) Every policy shall contain a provision that, in the event the insurer develops new benefits or benefit eligibility or new policies with new benefits or benefit eligibility not included in the previously issued policy, the insurer will grant current holders of its policies who are not in benefit or within the elimination period the following rights:
(1) The policyholder will be notified of the availability of the new benefits or benefit eligibility or new policy within 12 months. The insurer s notice shall be filed with the department at the same time as the new policy or rider.
(2) The insurer shall offer the policyholder new benefits or benefit eligibility in one of the following ways:
(A) By adding a rider to the existing policy and paying a separate premium for the new benefits or benefit eligibility based on the insured s attained age. The premium for the existing policy will remain unchanged based on the insured s age at issuance.
(B) By replacing the existing policy or certificate in accordance with Section 10234.87.
(C) By replacing the existing policy or certificate with a new policy or certificate in which case consideration for past insured status shall be recognized by setting the premium for the replacement policy or certificate at the issue age of the policy or certificate being replaced.
(b) The insured may be required to undergo new underwriting, but the underwriting can be no more restrictive than if the policyholder or certificate holder were applying for a new policy or certificate.
(c) The insurer of a group policy as defined under subdivisions (a) to (c), inclusive, of Section 10231.6 must offer the group policyholder the opportunity to have the new benefits and provisions extended to existing certificate holders, but the insurer is relieved of the obligations imposed by this section if the holder of the group policy declines the issuer s offer.
(d) This section shall become operative on June 30, 2003.
(Amended by Stats. 2003, Ch. 62, Sec. 201. Effective January 1, 2004.)
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