10290-10293

INSURANCE CODE
SECTION 10290-10293




10290.  A disability policy shall not be issued or delivered to any
person in this State until:
   (a) A copy of the form thereof and, if more than one class of
risks is written, of the classification of risks, and the premium
rates pertaining thereto are filed with the commissioner.
   (b) Either:
   (1) Thirty days expires without notice from the commissioner after
such copy is filed, or,
   (2) The commissioner gives his written approval prior to that
time.


10291.  If the commissioner notifies the insurer, in writing, that
the filed form does not comply with the requirements of law,
specifying the reasons for his opinion, it is unlawful thereafter for
any such insurer to issue any policy in such form.




10291.5.  (a) The purpose of this section is to achieve both of the
following:
   (1) Prevent, in respect to disability insurance, fraud, unfair
trade practices, and insurance economically unsound to the insured.
   (2) Assure that the language of all insurance policies can be
readily understood and interpreted.
   (b) The commissioner shall not approve any disability policy for
insurance or delivery in this state in any of the following
circumstances:
   (1) If the commissioner finds that it contains any provision, or
has any label, description of its contents, title, heading, backing,
or other indication of its provisions which is unintelligible,
uncertain, ambiguous, or abstruse, or likely to mislead a person to
whom the policy is offered, delivered or issued.
   (2) If it contains any provision for payment at a rate, or in an
amount (other than the product of rate times the periods for which
payments are promised) for loss caused by particular event or events
(as distinguished from character of physical injury or illness of the
insured) more than triple the lowest rate, or amount, promised in
the policy for the same loss caused by any other event or events
(loss caused by sickness, loss caused by accident, and different
degrees of disability each being considered, for the purpose of this
paragraph, a different loss); or if it contains any provision for
payment for any confining loss of time at a rate more than six times
the least rate payable for any partial loss of time or more than
twice the least rate payable for any nonconfining total loss of time;
or if it contains any provision for payment for any nonconfining
total loss of time at a rate more than three times the least rate
payable for any partial loss of time.
   (3) If it contains any provision for payment for disability caused
by particular event or events (as distinguished from character of
physical injury or illness of the insured) payable for a term more
than twice the least term of payment provided by the policy for the
same degree of disability caused by any other event or events; or if
it contains any benefit for total nonconfining disability payable for
lifetime or for more than 12 months and any benefit for partial
disability, unless the benefit for partial disability is payable for
at least three months; or if it contains any benefit for total
confining disability payable for lifetime or for more than 12 months,
unless it also contains benefit for total nonconfining disability
caused by the same event or events payable for at least three months,
and, if it also contains any benefit for partial disability, unless
the benefit for partial disability is payable for at least three
months. The provisions of this paragraph shall apply separately to
accident benefits and to sickness benefits.
   (4) If it contains provision or provisions which would have the
effect, upon any termination of the policy, of reducing or ending the
liability as the insurer would have, but for the termination, for
loss of time resulting from accident occurring while the policy is in
force or for loss of time commencing while the policy is in force
and resulting from sickness contracted while the policy is in force
or for other losses resulting from accident occurring or sickness
contracted while the policy is in force, and also contains provision
or provisions reserving to the insurer the right to cancel or refuse
to renew the policy, unless it also contains other provision or
provisions the effect of which is that termination of the policy as
the result of the exercise by the insurer of any such right shall not
reduce or end the liability in respect to the hereinafter specified
losses as the insurer would have had under the policy, including its
other limitations, conditions, reductions, and restrictions, had the
policy not been so terminated.
   The specified losses referred to in the preceding paragraph are:
   (i) Loss of time which commences while the policy is in force and
results from sickness contracted while the policy is in force.
   (ii) Loss of time which commences within 20 days following and
results from accident occurring while the policy is in force.
   (iii) Losses which result from accident occurring or sickness
contracted while the policy is in force and arise out of the care or
treatment of illness or injury and which occur within 90 days from
the termination of the policy or during a period of continuous
compensable loss or losses which period commences prior to the end of
such 90 days.
   (iv) Losses other than those specified in clause (i), (ii), or
(iii) of this paragraph which result from accident occurring or
sickness contracted while the policy is in force and which losses
occur within 90 days following the accident or the contraction of the
sickness.
   (5) If by any caption, label, title, or description of contents
the policy states, implies, or infers without reasonable
qualification that it provides loss of time indemnity for lifetime,
or for any period of more than two years, if the loss of time
indemnity is made payable only when house confined or only under
special contingencies not applicable to other total loss of time
indemnity.
   (6) If it contains any benefit for total confining disability
payable only upon condition that the confinement be of an abnormally
restricted nature unless the caption of the part containing any such
benefit is accurately descriptive of the nature of the confinement
required and unless, if the policy has a description of contents,
label, or title, at least one of them contain reference to the nature
of the confinement required.
   (7) (A) If, irrespective of the premium charged therefor, any
benefit of the policy is, or the benefits of the policy as a whole
are, not sufficient to be of real economic value to the insured.
   (B) In determining whether benefits are of real economic value to
the insured, the commissioner shall not differentiate between
insureds of the same or similar economic or occupational classes and
shall give due consideration to all of the following:
   (i) The right of insurers to exercise sound underwriting judgment
in the selection and amounts of risks.
   (ii) Amount of benefit, length of time of benefit, nature or
extent of benefit, or any combination of those factors.
   (iii) The relative value in purchasing power of the benefit or
benefits.
   (iv) Differences in insurance issued on an industrial or other
special basis.
   (C) To be of real economic value, it shall not be necessary that
any benefit or benefits cover the full amount of any loss which might
be suffered by reason of the occurrence of any hazard or event
insured against.
   (8) If it substitutes a specified indemnity upon the occurrence of
accidental death for any benefit of the policy, other than a
specified indemnity for dismemberment, which would accrue prior to
the time of that death or if it contains any provision which has the
effect, other than at the election of the insured exercisable within
not less than 20 days in the case of benefits specifically limited to
the loss by removal of one or more fingers or one or more toes or
within not less than 90 days in all other cases, of doing any of the
following:
   (A) Of substituting, upon the occurrence of the loss of both
hands, both feet, one hand and one foot, the sight of both eyes or
the sight of one eye and the loss of one hand or one foot, some
specified indemnity for any or all benefits under the policy unless
the indemnity so specified is equal to or greater than the total of
the benefit or benefits for which such specified indemnity is
substituted and which, assuming in all cases that the insured would
continue to live, could possibly accrue within four years from the
date of such dismemberment under all other provisions of the policy
applicable to the particular event or events (as distinguished from
character of physical injury or illness) causing the dismemberment.
   (B) Of substituting, upon the occurrence of any other
dismemberment some specified indemnity for any or all benefits under
the policy unless the indemnity so specified is equal to or greater
than one-fourth of the total of the benefit or benefits for which the
specified indemnity is substituted and which, assuming in all cases
that the insured would continue to live, could possibly accrue within
four years from the date of the dismemberment under all other
provisions of the policy applicable to the particular event or events
(as distinguished from character of physical injury or illness)
causing the dismemberment.
   (C) Of substituting a specified indemnity upon the occurrence of
any dismemberment for any benefit of the policy which would accrue
prior to the time of dismemberment.
   As used in this section, loss of a hand shall be severance at or
above the wrist joint, loss of a foot shall be severance at or above
the ankle joint, loss of an eye shall be the irrecoverable loss of
the entire sight thereof, loss of a finger shall mean at least one
entire phalanx thereof and loss of a toe the entire toe.
   (9) If it contains provision, other than as provided in Section
10369.3, reducing any original benefit more than 50 percent on
account of age of the insured.
   (10) If the insuring clause or clauses contain no reference to the
exceptions, limitations, and reductions (if any) or no specific
reference to, or brief statement of, each abnormally restrictive
exception, limitation, or reduction.
   (11) If it contains benefit or benefits for loss or losses from
specified diseases only unless:
   (A) All of the diseases so specified in each provision granting
the benefits fall within some general classification based upon the
following:
   (i) The part or system of the human body principally subject to
all such diseases.
   (ii) The similarity in nature or cause of such diseases.
   (iii) In case of diseases of an unusually serious nature and
protracted course of treatment, the common characteristics of all
such diseases with respect to severity of affliction and cost of
treatment.
   (B) The policy is entitled and each provision granting the
benefits is separately captioned in clearly understandable words so
as to accurately describe the classification of diseases covered and
expressly point out, when that is the case, that not all diseases of
the classification are covered.
   (12) If it does not contain provision for a grace period of at
least the number of days specified below for the payment of each
premium falling due after the first premium, during which grace
period the policy shall continue in force provided, that the grace
period to be included in the policy shall be not less than seven days
for policies providing for weekly payment of premium, not less than
10 days for policies providing for monthly payment of premium and not
less than 31 days for all other policies.
   (13) If it fails to conform in any respect with any law of this
state.
   (c) The commissioner shall not approve any disability policy
covering hospital, medical, or surgical expenses unless the
commissioner finds that the application conforms to both of the
following requirements:
   (1) All applications for disability insurance covering hospital,
medical, or surgical expenses, except that which is guaranteed issue,
which include questions relating to medical conditions, shall
contain clear and unambiguous questions designed to ascertain the
health condition or history of the applicant.
   (2) The application questions designed to ascertain the health
condition or history of the applicant shall be based on medical
information that is reasonable and necessary for medical underwriting
purposes. The application shall include a prominently displayed
notice that states:
   "California law prohibits an HIV test from being required or used
by health insurance companies as a condition of obtaining health
insurance coverage."
   (d) Nothing in this section authorizes the commissioner to
establish or require a single or standard application form for
application questions.
   (e) The commissioner may, from time to time as conditions warrant,
after notice and hearing, promulgate such reasonable rules and
regulations, and amendments and additions thereto, as are necessary
or convenient, to establish, in advance of the submission of
policies, the standard or standards conforming to subdivision (b), by
which he or she shall disapprove or withdraw approval of any
disability policy.
   In promulgating any such rule or regulation the commissioner shall
give consideration to the criteria herein established and to the
desirability of approving for use in policies in this state uniform
provisions, nationwide or otherwise, and is hereby granted the
authority to consult with insurance authorities of any other state
and their representatives individually or by way of convention or
committee, to seek agreement upon those provisions.
   Any such rule or regulation shall be promulgated 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.
   (f) The commissioner may withdraw approval of filing of any policy
or other document or matter required to be approved by the
commissioner, or filed with him or her, by this chapter when the
commissioner would be authorized to disapprove or refuse filing of
the same if originally submitted at the time of the action of
withdrawal.
   Any such withdrawal shall be in writing and shall specify reasons.
An insurer adversely affected by any such withdrawal may, within a
period of 30 days following mailing or delivery of the writing
containing the withdrawal, by written request secure a hearing to
determine whether the withdrawal should be annulled, modified, or
confirmed. Unless, at any time, it is mutually agreed to the
contrary, a hearing shall be granted and commenced within 30 days
following filing of the request and shall proceed with reasonable
dispatch to determination. Unless the commissioner in writing in the
withdrawal, or subsequent thereto, grants an extension, any such
withdrawal shall, in the absence of any such request, be effective,
prospectively and not retroactively, on the 91st day following the
mailing or delivery of the withdrawal, and, if request for the
hearing is filed, on the 91st day following mailing or delivery of
written notice of the commissioner's determination.
   (g) No proceeding under this section is subject to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code.
   (h) Except as provided in subdivision (k), any action taken by the
commissioner under this section is subject to review by the courts
of this state and proceedings on review shall be in accordance with
the Code of Civil Procedure.
   Notwithstanding any other provision of law to the contrary,
petition for any such review may be filed at any time before the
effective date of the action taken by the commissioner. No action of
the commissioner shall become effective before the expiration of 20
days after written notice and a copy thereof are mailed or delivered
to the person adversely affected, and any action so submitted for
review shall not become effective for a further period of 15 days
after the filing of the petition in court. The court may stay the
effectiveness thereof for a longer period.
   (i) This section shall be liberally construed to effectuate the
purpose and intentions herein stated; but shall not be construed to
grant the commissioner power to fix or regulate rates for disability
insurance or prescribe a standard form of disability policy, except
that the commissioner shall prescribe a standard supplementary
disclosure form for presentation with all disability insurance
policies, pursuant to Section 10603.
   (j) This section shall be effective on and after July 1, 1950, as
to all policies thereafter submitted and on and after January 1,
1951, the commissioner may withdraw approval pursuant to subdivision
(d) of any policy thereafter issued or delivered in this state
irrespective of when its form may have been submitted or approved,
and prior to those dates the provisions of law in effect on January
1, 1949, shall apply to those policies.
   (k) Any such policy issued by an insurer to an insured on a form
approved by the commissioner, and in accordance with the conditions,
if any, contained in the approval, at a time when that approval is
outstanding shall, as between the insurer and the insured, or any
person claiming under the policy, be conclusively presumed to comply
with, and conform to, this section.



10291.6.  Insofar as the reduction of any original benefit on
account of age of the insured is concerned, a noncancellable policy
may be approved if such reduction does not exceed that permitted by
Section 10291.5(b)(9), or if the only such reduction is one having
the effect of reducing the limit of the period for which benefits for
loss of time resulting from total disability will be paid to a
period ending on the date on which the insured's right to continue
the policy in force expires and if the policy also provides that such
limit shall not in any case be less than 12 months.



10292.  A supplemental contract of the kind mentioned in Section
10271 shall not be delivered or issued for delivery to any person in
this State until a copy of the form thereof is submitted to and
approved by the commissioner. If such supplemental contract is an
integral part of a contract of life insurance, the entire contract
shall be submitted to the commissioner but his power of approval or
disapproval is limited to the supplemental portion described in such
section and such other portions as relate to such supplemental
portion. The commissioner may make reasonable rules and regulations
concerning the provisions in such contracts and their submission to
and approval by him as are necessary, advisable or convenient to
enforce the standards set forth in this chapter found by him to be
applicable to any such supplemental contract; provided, however, that
none of the standards set forth in Section 10291.5 except those in
subsections (a) and (b)(1) thereof, shall be deemed applicable to
such supplemental contract.


10293.  (a) The commissioner shall, after notice and hearing,
withdraw approval of an individual or mass-marketed policy of
disability insurance if after consideration of all relevant factors
the commissioner finds that the benefits provided under the policy
are unreasonable in relation to the premium charged. The commissioner
shall, from time to time as conditions warrant, after notice and
hearing, promulgate such reasonable rules and regulations, and
amendments and additions thereto, as are necessary to establish the
standard or standards by which the commissioner shall withdraw
approval of any such policy. Any such rule or regulation shall be
promulgated 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, and shall be effective 90 days after adoption
by the commissioner.
   (b) Unless the commissioner specifies otherwise in writing in the
withdrawals, or subsequent thereto, grants an extension, any such
withdrawal shall be effective prospectively and not retroactively on
the 91st day following the mailing or delivery of the withdrawal.
   (c) As used in this section:
   (1) "Mass-marketed policy" means any group or blanket disability
insurance policy which is offered by means of direct response
solicitation through a sponsoring organization, or through the mails
or other mass communications media and under which a person insured
pays all or substantially all of the cost of his or her insurance.
   (2) "Direct response solicitation" means any offer by an insurer
to persons in this state, either directly or through a third party,
to effect health insurance coverage which enables the individual to
apply or enroll for the insurance on the basis of the offer. It shall
not include solicitation for insurance through an employer benefit
plan which is defined in Public Law 93-406, nor shall it include such
a solicitation through the individual's creditor with respect to
credit health insurance.