11060-11073

INSURANCE CODE
SECTION 11060-11073




11060.  Every society authorized to do business in this State shall
issue to each benefit member a certificate specifying the amount of
benefits provided thereby. The certificate, together with any riders
or endorsements attached thereto, the charter or articles of
incorporation, the constitution and laws of the society, the
application for membership, and declaration of insurability, if any,
signed by the applicant, and all amendments to each thereof, shall
constitute the entire agreement between the society and the member,
and the certificate shall so state. A copy of the application for
membership and of the declaration of insurability, if any, shall be
endorsed upon or attached to the certificate.



11061.  All statements purporting to be made by the member shall, in
the absence of fraud, be representations and not warranties. Any
waiver of this provision shall be void.



11062.  Any changes, additions or amendments to the charter or
articles of incorporation, constitution or laws duly made or enacted
subsequent to the issuance of the certificate, shall bind the member
and the beneficiaries, and shall govern and control the agreement in
all respects the same as though such changes, additions or amendments
had been made prior to and were in force at the time of the
application for membership, but no such changes, additions or
amendments shall have the effect of terminating or reducing the
benefit or benefits payable under any certificate in force at the
time such changes, additions or amendments become effective.




11063.  Copies of any of the documents mentioned in Sections 11060
and 11062, certified by the secretary or corresponding officer of the
society, shall be received in evidence of the terms and conditions
thereof.


11064.  A society shall provide specifically in its certificates
that if its reserves become impaired, its board of directors or
corresponding body may require that the owner pay to the society the
amount of the owner's equitable proportion of the deficiency as
ascertained by its board, and that if the payment be not made it
shall stand as an indebtedness against the certificate and draw
interest not to exceed the rate specified for certificate loans under
the certificate, or if none is specified, 6 percent per annum
compounded annually.


11065.  Every society authorized to do business in this State shall
provide in its constitution or laws that additional payments or
contributions shall be required of members by the action of the board
of directors or corresponding body of the society whenever they deem
it necessary or proper to effectuate the carrying on of the
insurance business of the society.



11066.  After the effective date of the amendments to this section
made during the 1995-96 Regular Session of the Legislature, no life
insurance benefit certificate may be delivered or issued for delivery
in this state unless a copy of the form, the application therefor,
and any attached endorsements or riders have been filed with the
commissioner in the same manner as policies, contracts, or
certificates of life insurance issued by stock or mutual insurers.
The certificate shall have a title clearly and correctly describing
its form on the face and filing back and shall contain in substance
the standard provisions listed below. However, the commissioner may
approve any form that in his or her opinion contains provisions
relating to any one or more of the following requirements that are
more favorable to insured members than the one or ones required here.
   (a) A provision stating the amount of premiums that are payable
under the certificate, and a provision that the certificate holder
shall be obligated to pay, as a condition of the continuance in force
of the certificate, additional premiums imposed in accordance with
the constitution or laws of the society then in force or thereafter
lawfully enacted.
   (b) A provision that the certificate holder is entitled to a grace
of not less than a full month (or 30 days at the option of the
society) in which the payment of any premium, after the first, may be
made, and that during the grace period, the certificate shall
continue in full force. However, the certificate may provide that in
case a loss occurs during the grace period before the overdue premium
is paid, the amount of the overdue premium or premiums may be
deducted in any settlement under the certificate.
   (c) A provision that the certificate holder shall be entitled to
have the certificate reinstated at any time within three years from
the date of default in payment of premiums, unless the certificate
has been completely terminated through the application of a
nonforfeiture benefit, upon the production of evidence of
insurability and good health satisfactory to the society and the
payment of all overdue premiums and any other indebtedness to the
society upon the certificate, together with interest on the premiums
and indebtedness, if any, at a rate not exceeding 6 percent per annum
compounded annually. However, a society may provide for a minimum
interest payment of not exceeding ten cents ($0.10) for each month's
premium in arrears at the date of reinstatement, if the premiums do
not exceed 12 in number.
   (d) A provision that, in the event of default in payment of any
premium after three full years' premiums have been paid, or after
premiums for a lesser period have been paid if the contract so
provides, the society will grant, upon proper request not later than
60 days after the due date of the premium in default, a nonforfeiture
benefit on the plan stipulated in the certificate, effective as of
the due date, of the value as specified in this chapter. This
subdivision does not apply to pure endowment, annuity or reversionary
annuity contracts, or term certificates of uniform amount, or
renewal thereof, of 15 years or less expiring before age 66, for
which uniform premiums are payable during the entire term of the
certificate, or term certificates of decreasing amount on which the
granting of a nonforfeiture benefit is not required in order to
comply with the minimum values specified in this chapter.
   (e) A provision that one nonforfeiture benefit, as specified in
the certificate, in accordance with the requirements of subdivision
(d) above, shall become effective automatically unless the member
elects another available nonforfeiture benefit or, if society makes
available a cash surrender value, the cash surrender value, not later
than 60 days after the due date of the premium in default.
   (f) A statement of the mortality table and rate of interest used
in determining all nonforfeiture benefits and cash surrender values
available under the certificate. After September 21, 1954, a brief
general statement of the method used in calculating the benefits and
values available under the certificate on any certificate anniversary
beyond the last anniversary for which the benefits and values are
consecutively shown in the certificate. The statement shall be
accompanied by an explanation of the manner in which the benefits and
values are altered by the existence of paid-up additions credited to
the certificate or by any indebtedness to the society on the
certificate.
   (g) A table showing in figures every nonforfeiture benefit and
cash surrender value available under the certificate for each
certificate anniversary either during the first 20 certificate years
or during the term of the certificate, whichever is shorter, the
benefits and values to be calculated upon the assumption that there
are no dividends or paid-up additions credited to the certificate and
that there is no indebtedness to the society on account of or
secured by the certificate.
   (h) A provision that the certificate shall be incontestable after
it has been in force during the lifetime of the insured for a period
of two years from its date of issue except for nonpayment of
premiums, risks limited or not assumed, violation of the provisions
of the certificate relating to military, aviation, or naval service,
or violation of the provisions relating to suspension or expulsion as
substantially set forth in the certificate. At the option of the
society, supplemental provisions relating to benefits in the event of
temporary or permanent disability or hospitalization and provisions
that grant additional insurance specifically against death by
accident or accidental means, may also be excepted. The certificate
shall be incontestable on the ground of suicide after it has been in
force during the lifetime of the insured for a period of two years
from date of issue. The certificate may provide, as to statements
made to procure reinstatement, that the society has the right to
contest a reinstated certificate within a period of two years from
date of reinstatement with the same exceptions as provided here.
   (i) A provision that if it shall be found at any time before final
settlement under the certificate that the age or sex of the insured
(or the age or sex of any other person, if considered in determining
the premium) has been misstated, and the discrepancy and the premium
payment involved have not been adjusted, the amount payable under the
certificate shall be such as the premium would have purchased at the
correct age and sex. However, if the correct age was not an
insurable age under the society's charter, constitution, or bylaws,
only the premiums paid to the society, less any payments previously
made to the member, shall be returned. Alternatively, at the option
of the society, the amount payable under the certificate shall be
that which the premiums would have purchased at the correct age and
sex according to the society's promulgated rates and any extension
thereof based upon actuarial principles.
   (j) A provision or provisions that recite fully, or that set forth
the substance of, all sections of the charter, constitution, laws,
rules or regulations of the society, in force at the time of issuance
of the certificate, the violation of which will result in the
termination of, or in the reduction of, the benefit or benefits
payable under the certificate.
   Any of the foregoing provisions or portions thereof not applicable
by reason of the plan of insurance may, to the extent inapplicable,
be omitted from the certificate. The word "premiums" as used in this
section means premiums, rates, or other required contributions by
whatever name known.



11067.  After September 21, 1952, no life insurance benefit
certificate shall be delivered or issued for delivery in this State
containing in substance any of the following provisions:
   (a) Any provision limiting the time within which any action at law
or in equity may be commenced to less than 18 months after the cause
of action shall accrue.
   (b) Any provision by which the certificate shall purport to be
issued or take effect more than six months before the original
application for the certificate was made, except in case of transfer
from one form of certificate to another in connection with which the
member is to receive credit for any reserve accumulation under the
form of certificate from which the transfer is made.
   (c) Any provision for forfeiture of the certificate for failure to
repay any loan thereon or to pay interest on such loan while the
total indebtedness, including interest, is less than the loan value
of the certificate.
   (d) Any provision whereby the suspension or expulsion of the
member, or change of occupation, or any other violation of the terms
and conditions of the contract shall result in the loss or reduction
of the cash surrender value or other withdrawal equity, if any,
available by the terms of such certificate.



11068.  After September 21, 1954, no life insurance benefit
certificate shall be delivered or issued for delivery in this State
containing in substance any provision limiting the time within which
any action at law or in equity may be commenced to less than two
years after the cause of action shall accrue.



11069.  No domestic, foreign or alien society authorized to do
business in this State shall issue or deliver in this State any
certificate or other evidence of any contract for temporary or
permanent disability benefits as a result of disease or accident, or
for hospital, medical or nursing benefits, unless and until the form
thereof, together with the form of application and all riders or
endorsements for use in connection therewith, shall have been filed
with the commissioner and approved by him as conforming to reasonable
rules and regulations from time to time made by him and as not
inconsistent with any other provisions of law applicable thereto. The
commissioner shall, within a reasonable time after the filing of any
such form, notify the society filing the same either of his approval
or of his disapproval of such form. The commissioner may approve any
such form which in his opinion contains provisions on any one or
more of the several requirements made by him which are more favorable
to the insured members than the one or ones so required. The action
of the commissioner in disapproving any such form shall be subject to
judicial review. Pursuant to the foregoing provisions, the
commissioner shall have power, from time to time, to make, alter and
supersede reasonable regulations prescribing the required, optional
and prohibited provisions in such contracts, and such regulations
shall conform, as far as practicable, to the provisions of this code
relating to similar contracts issued by other insurers. Where the
commissioner deems inapplicable, either in part or in their entirety,
the provisions of this code relating to similar contracts issued by
other insurers, he may prescribe the portions or summary thereof of
the contract to be printed on the certificate issued to the member.
All rules and regulations made, altered or superseded by the
commissioner pursuant to the authority granted in this section shall
be in accordance with Chapter 4 of Part 1, Division 3, Title 2 of the
Government Code.



11070.  After September 21, 1954, no action at law or in equity
shall be had or maintained on any certificate or contract issued by a
society unless commenced within two years after the cause of action
shall accrue.


11071.  The constitution and laws of the society may provide that no
subordinate body, nor any of its subordinate officers or members
shall have the power or authority to waive any of the provisions of
the laws and constitution of the society. Such provision shall be
binding on the society and every member and beneficiary of a member.




11072.  A domestic society may, by a reinsurance agreement, cede any
individual risk or risks in whole or in part to an insurer having
the power to make such reinsurance and authorized to do business in
this State, or if not so authorized, one which is approved by the
commissioner; but no such society may reinsure substantially all of
its insurance in force without the written permission of the
commissioner. It may take credit for the reserves on such ceded risks
to the extent reinsured, but no credit shall be allowed as an
admitted asset or as a deduction from liability, to a ceding society
for reinsurance made, ceded, renewed, or otherwise becoming effective
after the effective date of this chapter, unless the reinsurance is
payable by the assuming insurer on the basis of the liability of the
ceding society under the contract or contracts reinsured without
diminution because of the insolvency of the ceding society.



11073.  If the contract of a society entered into, amended, or
renewed in this state on or after the effective date of this section
provides in any manner for coverage for an employee and a covered
spouse dependent upon such employee, the contract shall not provide
for coverage under conditions less favorable for employees than
coverage provided for covered spouses dependent upon the employees.