SECTIONS 10170-10180

10170.  An insurance upon life may be made payable: (a) On the death of the insured. (b) On his surviving a specified period. (c) Periodically as long as he lives. (d) Otherwise contingently on the continuance or determination oflife. (e) Upon such terms and conditions and subject to suchrestrictions as to revocation by the policyholder and control bybeneficiaries as shall have been agreed to in writing by the insurerand the policyholder. If no terms and conditions have been agreed toby the insurer and the policyholder during the insured's lifetimethen upon such terms and conditions and subject to such restrictionsas may be agreed to in writing by the insurer and the beneficiaries.Any such agreement may be rescinded or amended by the parties theretowithout the consent of any beneficiary therein designated unless therights of any such beneficiary have been expressly declared to beirrevocable. No such agreement hereafter made shall vest in theinsurer discretion as to the conditions, time, amount, manner ormethod of payment. The relationship between the insurer and thepolicyholder or beneficiaries under any such agreement shall be thatof debtor and creditor and the insurer shall not be required tosegregate funds so held but shall hold them as a part of its generalcorporate assets.10171.  Any life policy or other agreement relating to the holdingor payment of the proceeds of a life policy may provide that theproceeds thereof or payments thereunder shall not be subject totransfer, anticipation or commutation or encumbrance by anybeneficiary, and shall not be subject to the claims of creditors ofany beneficiary or any legal process against any beneficiary.10172.  Notwithstanding Sections 751 and 1100 of the Family Code andSection 249.5 of the Probate Code, when the proceeds of, or paymentsunder, a life insurance policy become payable and the insurer makespayment thereof in accordance with the terms of the policy, or inaccordance with the terms of any written assignment thereof if thepolicy has been assigned, that payment shall fully discharge theinsurer from all claims under the policy unless, before that paymentis made, the insurer has received, at its home office, written noticeby or on behalf of some other person that the other person claims tobe entitled to that payment or some interest in the policy.10172.5.  (a) Notwithstanding any other provision of law, eachinsurer admitted to transact life insurance, credit life insurance,or accidental death insurance in this state that fails or refuses topay the proceeds of, or payments under, any policy of life insuranceissued by it within 30 days after the date of death of the insuredshall pay interest, at a rate not less than the then current rate ofinterest on death proceeds left on deposit with the insurer computedfrom the date of the insured's death, on any moneys payable andunpaid after the expiration of the 30-day period. This section shallapply only to deaths of insureds which occur on or after January 1,1976. (b) Nothing in this section shall be construed to allow anyinsurer admitted to transact life insurance, credit life insurance,or accidental death insurance in this state to withhold payment ofmoney payable under a life insurance policy to any beneficiary for aperiod longer than reasonably necessary to transmit that payment.Whenever possible payment shall be made within 30 days after the dateof death of the insured. (c) In any case in which interest on the proceeds of, or paymentsunder, any policy of life insurance, credit life insurance, oraccidental death insurance becomes payable pursuant to subdivision(a), the insurer shall notify the named beneficiary or beneficiariesat their last known address that interest will be paid on theproceeds of, or payments under, that policy from the date of death ofthe named insured. That notice shall specify the rate of interest tobe paid. In any case where the notice required by Section 249.5 ofthe Probate Code has been given to a life insurer, that insurer isnot required to provide the notice required by this section untilafter it has been notified that a child has actually been born withintwo years of the death of the decedent. The obligation shall bedeemed satisfied by giving notice to the person who first providesproof to the insurer that the child has been born alive. (d) This section shall not require the payment of interest in anycase in which the beneficiary elects in writing delivered to theinsurer to receive the proceeds of, or payments under, the policy byany means other than a lump-sum payment thereof.10173.  When a policy of life insurance is assigned in writing theinsurer may deal with the assignee in any manner not inconsistentwith the terms of said assignment until the insurer has received atits home office written notice by or on behalf of some other personthat such other person claims to be entitled to some interest in suchpolicy.10173.2.  When a policy of life insurance is, after the effectivedate of this section, assigned in writing as security for anindebtedness, the insurer shall, in any case in which it has receivedwritten notice of the name and address of the assignee, mail to suchassignee a written notice, postage prepaid and addressed to theassignee's address filed with the insurer, not less than 10 daysprior to the final lapse of the policy, each time the insured hasfailed or refused to transmit a premium payment to the insurer beforethe commencement of the policy's grace period or before such noticeis mailed. The insurer shall give such notice to the assignee in theproper case while such assignment remains in effect, unless theassignee has notified the insurer in writing that such notice iswaived. The insurer shall be permitted to charge the insured directlyor against the policy the reasonable cost of complying with thissection, but in no event to exceed two dollars and fifty cents($2.50) for each such notice. As used in this section, "final lapse of the policy" means thedate after which the policy will not be reinstated by the insurerwithout requiring evidence of insurability or written application.10174.  Policies of disability insurance, as defined in Section 106,that provide for death benefits, shall, as to those death benefits,be subject to Sections 10172, 10172.5, and 10173.10175.  Nothing contained in Sections 10172, 10173 or 10174 shallaffect any claim or right to any policy or the proceeds thereof, orpayments thereunder, as between all persons other than the insurer.10175.5.  (a) No disability insurance contract with a physician andsurgeon, physician and surgeon group, or other licensed health carepractitioner shall contain any incentive plan that includes specificpayment made in any type or form, to a physician and surgeon,physician and surgeon group, or other licensed health carepractitioner as an inducement to deny, reduce, limit, or delayspecific, medically necessary, and appropriate services provided withrespect to specific insureds or groups of insureds with similarmedical conditions. (b) Nothing in this section shall be construed to prohibit paymentarrangements that are not tied to specific medical decisionsinvolving specific insureds or group of insureds with similar medicalconditions.10176.  In disability insurance, the policy may provide for paymentof medical, surgical, chiropractic, physical therapy, speechpathology, audiology, acupuncture, professional mental health,dental, hospital, or optometric expenses upon a reimbursement basis,or for the exclusion of any of those services, and provision may bemade therein for payment of all or a portion of the amount of chargefor these services without requiring that the insured first pay theexpenses. The policy shall not prohibit the insured from selectingany psychologist or other person who is the holder of a certificateor license under Section 1000, 1634, 2050, 2472, 2553, 2630, 2948,3055, or 4938 of the Business and Professions Code, to perform theparticular services covered under the terms of the policy, thecertificate holder or licensee being expressly authorized by law toperform those services. If the insured selects any person who is a holder of a certificateunder Section 4938 of the Business and Professions Code, adisability insurer or nonprofit hospital service plan shall pay thebona fide claim of an acupuncturist holding a certificate pursuant toSection 4938 of the Business and Professions Code for the treatmentof an insured person only if the insured's policy or contractexpressly includes acupuncture as a benefit and includes coverage forthe injury or illness treated. Unless the policy or contractexpressly includes acupuncture as a benefit, no person who is theholder of any license or certificate set forth in this section shallbe paid or reimbursed under the policy for acupuncture. Nor shall the policy prohibit the insured, upon referral by aphysician and surgeon licensed under Section 2050 of the Business andProfessions Code, from selecting any licensed clinical social workerwho is the holder of a license issued under Section 4996 of theBusiness and Professions Code or any occupational therapist asspecified in Section 2570.2 of the Business and Professions Code, orany marriage and family therapist who is the holder of a licenseunder Section 4980.50 of the Business and Professions Code, toperform the particular services covered under the terms of thepolicy, or from selecting any speech-language pathologist oraudiologist licensed under Section 2532 of the Business andProfessions Code or any registered nurse licensed pursuant to Chapter6 (commencing with Section 2700) of Division 2 of the Business andProfessions Code, who possesses a master's degree inpsychiatric-mental health nursing and is listed as apsychiatric-mental health nurse by the Board of Registered Nursing orany advanced practice registered nurse certified as a clinical nursespecialist pursuant to Article 9 (commencing with Section 2838) ofChapter 6 of Division 2 of the Business and Professions Code whoparticipates in expert clinical practice in the specialty ofpsychiatric-mental health nursing, or any respiratory carepractitioner certified pursuant to Chapter 8.3 (commencing withSection 3700) of Division 2 of the Business and Professions Code toperform services deemed necessary by the referring physician, thatcertificate holder, licensee or otherwise regulated person, beingexpressly authorized by law to perform the services. Nothing in this section shall be construed to allow anycertificate holder or licensee enumerated in this section to performprofessional mental health services beyond his or her field or fieldsof competence as established by his or her education, training, andexperience. For the purposes of this section, "marriage and familytherapist" means a licensed marriage and family therapist who hasreceived specific instruction in assessment, diagnosis, prognosis,and counseling, and psychotherapeutic treatment of premarital,marriage, family, and child relationship dysfunctions that isequivalent to the instruction required for licensure on January 1,1981. An individual disability insurance policy, which is issued,renewed, or amended on or after January 1, 1988, which includesmental health services coverage may not include a lifetime waiver forthat coverage with respect to any applicant. The lifetime waiver ofcoverage provision shall be deemed unenforceable.10176.1.  As of the effective date of the amendments to this sectionenacted at the 1969 Regular Session of the Legislature alldisability policies shall be construed to be in compliance withSection 10176, and any provision in such policies in conflicttherewith shall be of no effect.10176.2.  As an alternative to the exclusion permitted by Section10176, a disability insurance policy may provide that services of alicensed physical therapist, licensed pursuant to Section 2630 of theBusiness and Professions Code, will be paid only if renderedpursuant to a method of treatment prescribed by a person holding aphysician's and surgeon's certificate issued by the Medical Board ofCalifornia.10176.25.  (a) As an alternative to an exclusion permitted bySection 10176, a disability insurance policy may provide thatservices of a registered dietitian or other nutrition professionalmeeting the qualifications prescribed by subdivision (a) or (e) ofSection 2585 of the Business and Professions Code will be paid onlyif rendered pursuant to a method of treatment prescribed by a personholding a physician's and surgeon's certificate issued by the MedicalBoard of California. (b) Nothing in this section requires disability insurers toautomatically pay for services provided by a registered dietitian orother nutrition professional.10176.3.  The amendments to Section 10176 and the addition ofSection 10176.2 enacted at the 1971 Regular Session of theLegislature shall be applicable only to those policies issued oramended on or after the effective date of such amendments andaddition.10176.4.  For purposes of establishing the fact of disability incredit disability insurance, disability insurance or life insurance,chiropractors' certifications of disability when made within thescope of their license shall be accepted by insurers as equally validas physicians and surgeons' certifications of disability when madewithin the scope of their license.10176.5.  Disability insurance which is written or issued fordelivery outside California in a state the laws of which requirerecognition of psychologists licensed in such state for servicesperformed within the scope of psychological practice shall not bedeemed to prohibit the insured from selecting a psychologist licensedin California to perform services in California which are coveredunder the terms of the policy even though such psychologist is notlicensed in the state in which the insurance is written or issued fordelivery.10176.6.  On and after January 1, 1982, every policy of disabilityinsurance which is issued, amended, delivered, or renewed that covershospital, medical, or surgical expenses on a group basis shall offercoverage for diabetic daycare self-management education programs,under such terms and conditions as may be agreed upon between theinsurer and the group policyholder, subject to utilization controls. Coverage shall only apply to programs directed and supervised by alicensed physician who is board certified in internal medicine orpediatrics. Diabetic daycare self-management and education programsshall be provided by health care professionals including, but notlimited to, physicians, registered nurses, registered pharmacists,and registered dieticians who are knowledgeable about the diseaseprocess of diabetes and the treatment of diabetic patients. As used in this section, diabetic daycare self-managementeducation programs means instruction which will enable diabeticpatients and their families to gain an understanding of the diabeticdisease process, and the daily management of diabetic therapy therebyavoiding frequent hospitalizations and complications. Nothing in this section shall be construed to require the offeringof programs whose sole or primary purpose is weight reduction.10176.61.  (a) Every insurer issuing, amending, delivering, orrenewing a disability insurance policy on or after January 1, 2000,that covers hospital, medical, or surgical expenses shall includecoverage for the following equipment and supplies for the managementand treatment of insulin-using diabetes, non-insulin-using diabetes,and gestational diabetes as medically necessary, even if the itemsare available without a prescription: (1) Blood glucose monitors and blood glucose testing strips. (2) Blood glucose monitors designed to assist the visuallyimpaired. (3) Insulin pumps and all related necessary supplies. (4) Ketone urine testing strips. (5) Lancets and lancet puncture devices. (6) Pen delivery systems for the administration of insulin. (7) Podiatric devices to prevent or treat diabetes-relatedcomplications. (8) Insulin syringes. (9) Visual aids, excluding eyewear, to assist the visuallyimpaired with proper dosing of insulin. (b) Every insurer issuing, amending, delivering, or renewing adisability insurance policy on or after January 1, 2000, that coversprescription benefits shall include coverage for the followingprescription items if the items are determined to be medicallynecessary: (1) Insulin. (2) Prescriptive medications for the treatment of diabetes. (3) Glucagon. (c) The coinsurances and deductibles for the benefits specified insubdivisions (a) and (b) shall not exceed those established forsimilar benefits within the given policy. (d) Every insurer shall provide coverage for diabetes outpatientself-management training, education, and medical nutrition therapynecessary to enable an insured to properly use the equipment,supplies, and medications set forth in subdivisions (a) and (b) andadditional diabetes outpatient self-management training, education,and medical nutrition therapy upon the direction or prescription ofthose services by the insured's participating physician. If aninsurer delegates outpatient self-management training to contractingproviders, the insurer shall require contracting providers to ensurethat diabetes outpatient self-management training, education, andmedical nutrition therapy are provided by appropriately licensed orregistered health care professionals. (e) The diabetes outpatient self-management training, education,and medical nutrition therapy services identified in subdivision (d)shall be provided by appropriately licensed or registered health careprofessionals as prescribed by a health care professional legallyauthorized to prescribe the services. (f) The coinsurances and deductibles for the benefits specified insubdivision (d) shall not exceed those established for physicianoffice visits by the insurer. (g) Every disability insurer governed by this section shalldisclose the benefits covered pursuant to this section in the insurer's evidence of coverage and disclosure forms. (h) An insurer may not reduce or eliminate coverage as a result ofthe requirements of this section. (i) This section does not apply to vision-only, dental-only,accident-only, specified disease, hospital indemnity, Medicaresupplement, long-term care, or disability income insurance, exceptthat for accident-only, specified disease, and hospital indemnityinsurance coverage, benefits under this section only apply to theextent that the benefits are covered under the general terms andconditions that apply to all other benefits under the policy. Nothingin this section may be construed as imposing a new benefit mandateon accident-only, specified disease, or hospital indemnity insurance.10176.7.  Disability insurance where the insurer is licensed to dobusiness in this state and which provides coverage under a contractof insurance which includes California residents but which may bewritten or issued for delivery outside of California where benefitsare provided within the scope of practice of a licensed clinicalsocial worker, a registered nurse licensed pursuant to Chapter 6(commencing with Section 2700) of Division 2 of the Business andProfessions Code who possesses a master's degree inpsychiatric-mental health nursing and two years of supervisedexperience in psychiatric-mental health nursing, a marriage andfamily therapist who is the holder of a license under Section 17805of the Business and Professions Code, or a respiratory carepractitioner certified pursuant to Chapter 8.3 (commencing withSection 3700) of Division 2 of the Business and Professions Codeshall not be deemed to prohibit persons covered under the contractfrom selecting those licensees in California to perform the servicesin California which are within the terms of the contract even thoughthe licensees are not licensed in the state where the contract iswritten or issued for delivery. It is the intent of the Legislature in amending this section inthe 1984 portion of the 1983-84 Legislative Session that personscovered by the insurance and those providers of health care specifiedin this section who are licensed in California should be entitled tothe benefits provided by the insurance for services of thoseproviders rendered to those persons.10176.8.  A disability insurance policy may provide that services ofa respiratory care practitioner certified pursuant to Chapter 8.3(commencing with Section 3700) of the Division 2 of the Business andProfessions Code, will be paid for pulmonary rehabilitation andrespiratory home care only if rendered pursuant to a method oftreatment prescribed by a physician and surgeon.10176.9.  No policy, contract, or agreement coming within theprovisions of this article, issued, entered into or renewed on orafter July 1, 1984, shall be deemed to contain any provisionrestricting the liability of the insurer or plan with respect toexpenses solely because the expenses were incurred while the personinsured was in a state hospital, if the policy, contract, oragreement would have paid for the services but for the fact that theywere provided in a state hospital. Nothing in this section shall bedeemed to require an insurer or plan to pay a state hospital forcovered expenses incurred by an insured or covered individual at arate or charge higher than the insurer or plan would pay for suchservices to a hospital with which the insurer or plan has entered acontract providing for alternative rates of payment or limitingpayments for services secured by insureds or covered individuals.10176.10.  (a) On or after January 1, 1994, no disability insurerissuing policies covering hospital, surgical, or medical expensesdelivered or renewed in this state or certificates of groupdisability insurance delivered or renewed in this state pursuant to amaster group policy delivered or renewed in another state, toindividuals, or to employer groups with fewer than two eligibleemployees, as defined in subdivision (g) of Section 10700, shallclose a block of business without complying with this section. (b) As used in this section, "block of business" means individual,group, or blanket disability insurance contracts covering hospital,medical, or surgical expenses of a particular policy form that hasdistinct benefits or marketing methods. "Closed block of business"means a block of business for which an insurer ceases to activelymarket and sell new contracts under a particular policy form in thisstate. (c) Notwithstanding subdivision (b), a block of business shall bepresumed closed if either of the following applies: (1) There has been an overall reduction of 12 percent in thenumber of in force policies of a particular form for a period of 12months. (2) The block has less than 2,000 insured nationally or 1,000insureds in California. This presumption shall not apply to a blockof business initiated within the previous 24 months, but notificationof that block shall be provided to the commissioner. Thenotification shall not be subject to the approval required bysubdivision (d). An insurer may present evidence for consideration by thecommissioner that the presumption in the particular case isincorrect. Should the determination be made that the block is closed,the insurer shall be given those remedy options contained insubdivision (d). The fact that a block of business does not meet oneof the presumptions set forth in this subdivision shall not precludea determination that it is closed as defined in subdivision (b). (d) An insurer shall notify the commissioner within 30 days of itsdecision to close a block or, in the absence of an actual decisionto close a block of business, within 30 days of its determinationthat the block is within the presumptions set forth in subdivision(c). The commissioner may notify an insurer that he or she hasdetermined that the presumptions contained in subdivision (c) applyto a block. No insurer providing disability insurance coveringhospital, medical, or surgical expenses shall close a policy form orgroup certificate without notification to the commissioner. Thatnotification shall include a plan to permit an insured to move to anyopen block, providing comparable benefits with no additionalunderwriting requirement or, alternatively, the insurer shall berequired to pool the closed block's experience with all appropriateopen forms for purposes of renewal rate determination, with no ratepenalty or surcharge, beyond that which reflects the experience ofthe combined pool. When the insurer chooses to pool, the notice shallinclude the insurer's plan for pooling the closed block'sexperience. The insurer may implement the pooling plan if 30 daysexpire after the submission is filed without written notice from thecommissioner specifying the reasons for his or her opinion that thepooling plan does not comply with the requirements of this section,or, prior to that time, if the commissioner provides the insurerwritten notice that the pooling plan complies with the requirementsof this section. The approval shall be based upon consideration of the accumulativerecent and expected future experience of the closed form and thosewith which the closed form is to be combined. (e) No insurer shall offer or sell any form nor provide misleadinginformation about the active or closed status of its business forthe purpose of evading this section. (f) An insurer shall bring any blocks of business closed prior tothe effective date of this section into compliance with the terms ofthis section no later than December 31, 1994. (g) This section shall not apply to small employer carriersproviding small employer health insurance to individuals or employergroups with fewer than two eligible employees if that coverage isprovided pursuant to Chapter 14 (commencing with Section 10700) ofPart 2 of Division 2, and with specific reference to coverage forindividuals or employer groups with fewer than two eligibleemployees, is approved by the commissioner pursuant to Section 10705,provided a carrier electing to sell coverage pursuant to thissubdivision shall continue to do so until such time as the carrierceases to market coverage to small employers and complies withsubdivision (c) of Section 10713. (h) This section shall not apply to accident only coverage,coverage of Medicare services pursuant to contracts with the UnitedStates government, Medicare supplement coverage, long-term careinsurance, dental, vision, or conversion coverage, coverage issued asa supplement to liability insurance, or automobile medical paymentinsurance.10177.  A self-insured employee welfare benefit plan may provide forpayment of professional mental health expenses upon a reimbursementbasis, or for the exclusion of those services, and provision may bemade therein for payment of all or a portion of the amount of chargefor those services without requiring that the employee first paythose expenses. The plan shall not prohibit the employee fromselecting any psychologist who is the holder of a certificate issuedunder Section 2948 of the Business and Professions Code or, uponreferral by a physician and surgeon licensed under Section 2135 ofthe Business and Professions Code, any licensed clinical socialworker who is the holder of a license issued under Section 4996 ofthe Business and Professions Code or any marriage and familytherapist who is the holder of a certificate or license under Section4980.50 of the Business and Professions Code, or any registerednurse licensed pursuant to Chapter 6 (commencing with Section 2700)of Division 2 of the Business and Professions Code, who possesses amaster's degree in psychiatric-mental health nursing and is listed asa psychiatric-mental health nurse by the Board of Registered Nursingor any advanced practice registered nurse certified as a clinicalnurse specialist pursuant to Article 9 (commencing with Section 2838)of Chapter 6 of Division 2 of the Business and Professions Code whoparticipates in expert clinical practice in the specialty ofpsychiatric-mental health nursing, to perform the particular servicescovered under the terms of the plan, the certificate or licenseholder being expressly authorized by law to perform these services. Nothing in this section shall be construed to allow anycertificate holder or licensee enumerated in this section to performprofessional services beyond his or her field or fields of competenceas established by his or her education, training, and experience.For the purposes of this section, "marriage and family therapist"shall mean a licensed marriage and family therapist who has receivedspecific instruction in assessment, diagnosis, prognosis, andcounseling, and psychotherapeutic treatment of premarital, marriage,family, and child relationship dysfunctions which is equivalent tothe instruction required for licensure on January 1, 1981. A self-insured employee welfare benefit plan, which is issued,renewed, or amended on or after January 1, 1988, that includes mentalhealth services coverage in nongroup contracts may not include alifetime waiver for that coverage with respect to any employee. Thelifetime waiver of coverage provision shall be deemed unenforceable.10177.5.  A self-insured employee welfare benefit plan which iswritten or issued for delivery outside California in a state the lawsof which require recognition of psychologists licensed in such statefor services performed within the scope of psychological practiceshall not be deemed to prohibit the insured from selecting apsychologist licensed in California to perform services in Californiawhich are covered under the terms of the policy even though suchpsychologist is not licensed in the state in which the insurance iswritten or issued for delivery.10177.6.  On and after the effective date of this section, aself-insured employee welfare benefit plan shall not prohibit theinsured from selecting any person who is the holder of a certificateor license under Section 3055 of the Business and Professions Code toperform the particular services covered under the terms of the plan,such certificate holder or licensee being expressly authorized bylaw to perform such services. This section shall not apply to any plan governed by federal lawwhich expressly preempts state regulation.10177.7.  On and after January 1, 1982, every self-insured employeewelfare benefit plan which is issued, amended, delivered, or renewedthat covers hospital, medical, or surgical expenses on a group basisshall offer coverage for diabetic daycare self-management educationprograms, under such terms and conditions as may be agreed uponbetween the plan and the group policyholder, subject to utilizationcontrols. Coverage shall only apply to programs directed and supervised by alicensed physician who is board certified in internal medicine orpediatrics. Covered diabetic daycare self-managment and educationprograms shall be provided by health care professionals including,but not limited to, physicians, registered nurses, registeredpharmacists, and registered dietitians who are knowledgeable aboutthe disease process of diabetes and the treatment of diabeticpatients. As used in this section, diabetic daycare self-managementeducation programs means instruction which will enable diabeticpatients and their families to gain an understanding of the diabeticdisease process, and the daily management of diabetic therapy therebyavoiding frequent hospitalizations and complications. Nothing in this section shall be construed to require the offeringof programs whose sole or primary purpose is weight reduction.10177.8.  A self-insured employee welfare benefit plan doingbusiness in this state and providing coverage that includesCalifornia residents but that may be written or issued for deliveryoutside of California where benefits are provided within the scope ofpractice of a licensed clinical social worker, a registered nurselicensed pursuant to Chapter 6 (commencing with Section 2700) ofDivision 2 of the Business and Professions Code who possesses amaster's degree in psychiatric-mental health nursing and two years ofsupervised experience in psychiatric-mental health nursing, or amarriage and family therapist who is the holder of a license underSection 17805 of the Business and Professions Code, shall not bedeemed to prohibit persons covered under the plan from selectingthose licensees in California to perform the services in Californiathat are within the terms of the contract even though the licenseesare not licensed in the state where the contract is written orissued. It is the intent of the Legislature in amending this section inthe 1984 portion of the 1983-84 Legislative Session that personscovered by the plan and those providers of health care specified inthis section who are licensed in California should be entitled to thebenefits provided by the plan for services of those providersrendered to those persons.10177.9.  (a) It is the intent of the Legislature that all personslicensed in this state to engage in the practice of dentistry shallbe accorded equal professional status and privileges, without regardto the degree earned. (b) Notwithstanding any other provision of law, no nonprofithospital service plan or self-insured employee welfare benefit planshall discriminate, with respect to employment, staff privileges, orthe provision of, or contracts for, professional services, against alicensed dentist solely on the basis of the educational degree heldby the dentist.10178.  No admitted insurer, union trust fund which administershealth, medical, or surgical insurance, or employer which has aninsurance company administering its health services program, shalldeny, for the reason that the insured incurred no expense, a claimfor hospital, medical or surgical services rendered by anongovernmental charitable research hospital in this state whichmakes no charge for its services in the absence of insurance. Noexpense-incurred, group hospital, medical or surgical policy orcertificate or union trust fund which administers health, medical, orsurgical insurance, or employer which has an insurance companyadministering its health services program, shall except, limit orreduce benefits for services rendered by a nongovernmental charitableresearch hospital because it does not charge for its services in theabsence of insurance. No expense-incurred individual hospital,medical or surgical policy or certificate or union trust fund whichadministers health, medical, or surgical insurance, or employer whichhas an insurance company administering its health services program,shall except, limit, or reduce benefits for services rendered by anongovernmental charitable research hospital because it does notcharge for its services in the absence of insurance. This section shall apply to every group policy or certificate ofexpense-incurred hospital, medical, or surgical insurance covering ordelivered to a covered individual in this state, notwithstanding thesitus of the group master policy pursuant to which the coverage isprovided. As used in this section, charitable research hospital means ahospital that meets all the following criteria: (1) Is internationally recognized as devoting itself primarily tomedical research. (2) Expends not less than 10 percent of its operating budget ineach fiscal year exclusively on medical research activities which arenot directly related to the provision of services to patients. (3) Derives not less than one-third of its gross revenues in eachfiscal year from contributions, donations, grants, gifts, or othergratuitous forms from individuals, groups, persons, or entitiesunrelated to the hospital. Contributions, donations, grants, gifts orother gratuitous sources of revenue received as compensation formedical services provided patients shall not be considered forpurposes of this subdivision. (4) Accepts patients without regard to the patient's ability topay for medical services. (5) Not less than two-thirds of the patients admitted have aprimary diagnosis or suspected disease or condition directly relatedto the specific area or areas in which the hospital conductsresearch. Patients admitted because of an emergent life-threateningcondition who could not be safely transported to another hospitalshall not be considered as patients for purposes of this section.10178.3.  (a) In order to prevent the improper selling, leasing, ortransferring of a health care provider's contract, it is the intentof the Legislature that every arrangement that results in a payorpaying a health care provider a reduced rate for health care servicesbased on the health care provider's participation in a network orpanel shall be disclosed to the provider in advance and that thepayor shall actively encourage beneficiaries to use the network,unless the health care provider agrees to provide discounts withoutthat active encouragement. (b) Beginning July 1, 2000, every contracting agent that sells,leases, assigns, transfers, or conveys its list of contracted healthcare providers and their contracted reimbursement rates to a payor,as defined in subparagraph (A) of paragraph (3) of subdivision (d),or another contracting agent shall, upon entering or renewing aprovider contract, do all of the following: (1) Disclose whether the list of contracted providers may be sold,leased, transferred, or conveyed to other payors or othercontracting agents, and specify whether those payors or contractingagents include workers' compensation insurers or automobile insurers. (2) Disclose what specific practices, if any, payors utilize toactively encourage a payor's beneficiaries to use the list ofcontracted providers when obtaining medical care that entitles apayor to claim a contracted rate. For purposes of this paragraph, apayor is deemed to have actively encouraged its beneficiaries to usethe list of contracted providers if one of the following occurs: (A) The payor's contract with subscribers or insureds offersbeneficiaries direct financial incentives to use the list ofcontracted providers when obtaining medical care. "Financialincentives" means reduced copayments, reduced deductibles, premiumdiscounts directly attributable to the use of a provider panel, orfinancial penalties directly attributable to the nonuse of a providerpanel. (B) The payor provides information to its beneficiaries, who areparties to the contract, or, in the case of workers' compensationinsurance, the employer, advising them of the existence of the listof contracted providers through the use of a variety of advertisingor marketing approaches that supply the names, addresses, andtelephone numbers of contracted providers to beneficiaries in advanceof their selection of a health care provider, which approaches mayinclude, but are not limited to, the use of provider directories, orthe use of toll-free telephone numbers or Internet Web site addressessupplied directly to every beneficiary. However, Internet Web siteaddresses alone shall not be deemed to satisfy the requirements ofthis subparagraph. Nothing in this subparagraph shall preventcontracting agents or payors from providing only listings ofproviders located within a reasonable geographic range of abeneficiary. (3) Disclose whether payors to which the list of contractedproviders may be sold, leased, transferred, or conveyed may bepermitted to pay a provider's contracted rate without activelyencouraging the payors' beneficiaries to use the list of contractedproviders when obtaining medical care. Nothing in this subdivisionshall be construed to require a payor to actively encourage the payor's beneficiaries to use the list of contracted providers whenobtaining medical care in the case of an emergency. (4) Disclose, upon the initial signing of a contract, and within30 calendar days of receipt of a written request from a provider orprovider panel, a payor summary of all payors currently eligible toclaim a provider's contracted rate due to the provider's and payor'srespective written agreements with any contracting agent. (5) Allow providers, upon the initial signing, renewal, oramendment of a provider contract, to decline to be included in anylist of contracted providers that is sold, leased, transferred, orconveyed to payors that do not actively encourage the payors'beneficiaries to use the list of contracted providers when obtainingmedical care as described in paragraph (2). Each provider's electionunder this paragraph shall be binding on the contracting agent withwhich the provider has a contract and any other contracting agentthat buys, leases, or otherwise obtains the list of contractedproviders. A provider shall not be excluded from any list ofcontracted providers that is sold, leased, transferred, or conveyedto payors that actively encourage the payors' beneficiaries to usethe list of contracted providers when obtaining medical care, basedupon the provider's refusal to be included on any list of contractedproviders that is sold, leased, transferred, or conveyed to payorsthat do not actively encourage the payors' beneficiaries to use thelist of contracted providers when obtaining medical care. (6) Nothing in this subdivision shall be construed to imposerequirements or regulations upon payors, as defined in subparagraph(A) of paragraph (3) of subdivision (d). (c) Beginning July 1, 2000, a payor, as defined in subparagraph(B) of paragraph (3) of subdivision (d), shall do all of thefollowing: (1) Provide an explanation of benefits or explanation of reviewthat identifies the name of the network that has a written agreementsigned by the provider whereby the payor is entitled, directly orindirectly, to pay a preferred rate for the services rendered. (2) Demonstrate that it is entitled to pay a contracted ratewithin 30 business days of receipt of a written request from aprovider who has received a claim payment from the payor. The failureof a payor to make the demonstration within 30 business days shallrender the payor responsible for the amount that the payor would havebeen required to pay pursuant to the beneficiary's policy with thepayor, which amount shall be due and payable within 10 business daysof receipt of written notice from the provider, and shall bar thepayor from taking any future discounts from that provider without theprovider's express written consent until the payor can demonstrateto the provider that it is entitled to pay a contracted rate asprovided in this subdivision. A payor shall be deemed to havedemonstrated that it is entitled to pay a contracted rate if itcomplies with either of the following: (A) Discloses the name of the network that has a written agreementwith the provider whereby the provider agrees to accept discountedrates, and describes the specific practices the payor utilizes tocomply with paragraph (2) of subdivision (b). (B) Identifies the provider's written agreement with a contractingagent whereby the provider agrees to be included on lists ofcontracted providers sold, leased, transferred, or conveyed to payorsthat do not actively encourage beneficiaries to use the list ofcontracted providers pursuant to paragraph (5) of subdivision (b). (d) For the purposes of this section, the following terms have thefollowing meanings: (1) "Beneficiary" means: (A) For automobile insurance, those persons covered under themedical payments portion of the insurance contract. (B) For group or individual health services covered through ahealth care service plan contract, including a specialized healthcare service plan contract, or a policy of disability insurance thatcovers hospital, medical, or surgical benefits, a subscriber, anenrollee, a policyholder, or an insured. (C) For workers' compensation insurance, an employee seekinghealth care services for a work-related injury. (2) "Contracting agent" means an insurer licensed under this codeto provide disability insurance that covers hospital, medical, orsurgical benefits, automobile insurance, or workers' compensationinsurance, while engaged, for monetary or other consideration, in theact of selling, leasing, transferring, assigning, or conveying aprovider or provider panel to provide health care services tobeneficiaries. (3) (A) For the purposes of subdivision (b), "payor" means ahealth care service plan, including a specialized health care serviceplan, an insurer licensed under this code to provide disabilityinsurance that covers hospital, medical, or surgical benefits,automobile insurance, or workers' compensation insurance, or aself-insured employer that is responsible to pay for health careservices provided to beneficiaries. (B) For the purposes of subdivision (c), "payor" means only aninsurer licensed under this code to provide disability insurance thatcovers hospital, medical, or surgical benefits, or automobileinsurance, if that insurer is responsible to pay for health careservices provided to beneficiaries. (4) "Payor summary" means a written summary that includes thepayor's name and the type of plan, including, but not limited to, agroup health plan, an automobile insurance plan, and a workers'compensation insurance plan. (5) "Provider" means any of the following: (A) Any person licensed or certified pursuant to Division 2(commencing with Section 500) of the Business and Professions Code. (B) Any person licensed pursuant to the Chiropractic InitiativeAct or the Osteopathic Initiative Act. (C) Any person licensed pursuant to Chapter 2.5 (commencing withSection 1440) of Division 2 of the Health and Safety Code. (D) A clinic, health dispensary, or health facility licensedpursuant to Division 2 (commencing with Section 1200) of the Healthand Safety Code. (E) Any entity exempt from licensure pursuant to Section 1206 ofthe Health and Safety Code. (e) This section shall become operative on July 1, 2000.10178.4.  (a) When a contracting agent sells, leases, or transfers ahealth provider's contract to a payor, the rights and obligations ofthe provider shall be governed by the underlying contract betweenthe health care provider and the contracting agent. (b) For purposes of this section, the following terms shall havethe following meanings: (1) "Contracting agent" has the meaning set forth in paragraph (2)of subdivision (d) of Section 10178.3. (2) "Payor" has the meaning set forth in paragraph (3) ofsubdivision (d) of Section 10178.3.10178.5.  (a) Every self-insured employee welfare benefit planissued, amended, or renewed on and after January 1, 1987, that offerscoverage for medical transportation services, shall contain aprovision providing for direct reimbursement to any provider ofcovered medical transportation services if the provider has notreceived payment for those services from any other source. (b) Subdivision (a) shall not apply to any transaction between aprovider of medical transportation services and a self-insuredemployee welfare benefit plan if the parties have entered into acontract providing for direct payment. (c) For purposes of this subdivision, "direct reimbursement" meansthe following: The insured shall file a claim for the medical transportationservice with the plan; the plan shall pay the medical transportationprovider directly; and the medical transportation provider shall notdemand payment from the insured until having received payment fromthe plan, at which time the medical transportation provider maydemand payment from the insured for any unpaid portion of theprovider's fee.10179.  A disability insurer that offers or provides coverage forany services that are legally within the scope of the practice ofpodiatric medicine, as defined in Section 2472 of the Business andProfessions Code, as a specific plan benefit or otherwise, shall notrefuse to give reasonable consideration to negotiating contracts withor affiliation with podiatrists for the provision of service solelyon the basis that they are podiatrists.10180.  (a) A disability insurer which negotiates and enters into acontract with professional providers to provide services atalternative rates of payment pursuant to Section 10133 of theInsurance Code, shall give reasonable consideration to timely writtenproposals for contracting by licensed or certified professionalproviders. (b) For the purposes of this section, the following definitionsare applicable: (1) "Reasonable consideration" means consideration in good faithof the terms of proposals for contracting prior to the time thatcontracts for alternative rates of payment are entered into orrenewed. An insurer may specify the terms and conditions ofcontracting to assure cost efficiency, qualification of providers,appropriate utilization of services, accessibility, convenience topersons who would receive the provider's services, and consistencywith its basic method of operation, but shall not exclude providersbecause of their category of license. (2) "Professional provider" means a holder of a certificate orlicense under Division 2 (commencing with Section 500) of theBusiness and Professions Code, or any initiative act referred totherein, except for those certified or licensed pursuant to Article 3of Chapter 5 (commencing with Section 2050) or Chapter 11(commencing with Section 4800), who may, within the scope of theirlicenses, perform the services of a specific benefit defined in theinsurer's policy. (c) An insurer which has a contract with an institutional provideror with professional providers is not required by this section togive consideration to contracting with professional providers whohold the same category of license or certificate and propose to servea geographic area served adequately by the contracting providersthat provide their professional services as employees or agents ofthat institutional or professional provider, or contract with thatinstitutional or professional provider to provide professionalservices.