SECTIONS 10290-10293

10290.  A disability policy shall not be issued or delivered to anyperson in this State until: (a) A copy of the form thereof and, if more than one class ofrisks is written, of the classification of risks, and the premiumrates pertaining thereto are filed with the commissioner. (b) Either: (1) Thirty days expires without notice from the commissioner aftersuch copy is filed, or, (2) The commissioner gives his written approval prior to thattime.10291.  If the commissioner notifies the insurer, in writing, thatthe filed form does not comply with the requirements of law,specifying the reasons for his opinion, it is unlawful thereafter forany such insurer to issue any policy in such form.10291.5.  (a) The purpose of this section is to achieve both of thefollowing: (1) Prevent, in respect to disability insurance, fraud, unfairtrade practices, and insurance economically unsound to the insured. (2) Assure that the language of all insurance policies can bereadily understood and interpreted. (b) The commissioner shall not approve any disability policy forinsurance or delivery in this state in any of the followingcircumstances: (1) If the commissioner finds that it contains any provision, orhas 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 towhom the policy is offered, delivered or issued. (2) If it contains any provision for payment at a rate, or in anamount (other than the product of rate times the periods for whichpayments are promised) for loss caused by particular event or events(as distinguished from character of physical injury or illness of theinsured) more than triple the lowest rate, or amount, promised inthe policy for the same loss caused by any other event or events(loss caused by sickness, loss caused by accident, and differentdegrees of disability each being considered, for the purpose of thisparagraph, a different loss); or if it contains any provision forpayment for any confining loss of time at a rate more than six timesthe least rate payable for any partial loss of time or more thantwice the least rate payable for any nonconfining total loss of time;or if it contains any provision for payment for any nonconfiningtotal loss of time at a rate more than three times the least ratepayable for any partial loss of time. (3) If it contains any provision for payment for disability causedby particular event or events (as distinguished from character ofphysical injury or illness of the insured) payable for a term morethan twice the least term of payment provided by the policy for thesame degree of disability caused by any other event or events; or ifit contains any benefit for total nonconfining disability payable forlifetime or for more than 12 months and any benefit for partialdisability, unless the benefit for partial disability is payable forat least three months; or if it contains any benefit for totalconfining disability payable for lifetime or for more than 12 months,unless it also contains benefit for total nonconfining disabilitycaused by the same event or events payable for at least three months,and, if it also contains any benefit for partial disability, unlessthe benefit for partial disability is payable for at least threemonths. The provisions of this paragraph shall apply separately toaccident benefits and to sickness benefits. (4) If it contains provision or provisions which would have theeffect, upon any termination of the policy, of reducing or ending theliability as the insurer would have, but for the termination, forloss of time resulting from accident occurring while the policy is inforce or for loss of time commencing while the policy is in forceand resulting from sickness contracted while the policy is in forceor for other losses resulting from accident occurring or sicknesscontracted while the policy is in force, and also contains provisionor provisions reserving to the insurer the right to cancel or refuseto renew the policy, unless it also contains other provision orprovisions the effect of which is that termination of the policy asthe result of the exercise by the insurer of any such right shall notreduce or end the liability in respect to the hereinafter specifiedlosses as the insurer would have had under the policy, including itsother limitations, conditions, reductions, and restrictions, had thepolicy 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 andresults from sickness contracted while the policy is in force. (ii) Loss of time which commences within 20 days following andresults from accident occurring while the policy is in force. (iii) Losses which result from accident occurring or sicknesscontracted while the policy is in force and arise out of the care ortreatment of illness or injury and which occur within 90 days fromthe termination of the policy or during a period of continuouscompensable loss or losses which period commences prior to the end ofsuch 90 days. (iv) Losses other than those specified in clause (i), (ii), or(iii) of this paragraph which result from accident occurring orsickness contracted while the policy is in force and which lossesoccur within 90 days following the accident or the contraction of thesickness. (5) If by any caption, label, title, or description of contentsthe policy states, implies, or infers without reasonablequalification that it provides loss of time indemnity for lifetime,or for any period of more than two years, if the loss of timeindemnity is made payable only when house confined or only underspecial contingencies not applicable to other total loss of timeindemnity. (6) If it contains any benefit for total confining disabilitypayable only upon condition that the confinement be of an abnormallyrestricted nature unless the caption of the part containing any suchbenefit is accurately descriptive of the nature of the confinementrequired and unless, if the policy has a description of contents,label, or title, at least one of them contain reference to the natureof the confinement required. (7) (A) If, irrespective of the premium charged therefor, anybenefit of the policy is, or the benefits of the policy as a wholeare, not sufficient to be of real economic value to the insured. (B) In determining whether benefits are of real economic value tothe insured, the commissioner shall not differentiate betweeninsureds of the same or similar economic or occupational classes andshall give due consideration to all of the following: (i) The right of insurers to exercise sound underwriting judgmentin the selection and amounts of risks. (ii) Amount of benefit, length of time of benefit, nature orextent of benefit, or any combination of those factors. (iii) The relative value in purchasing power of the benefit orbenefits. (iv) Differences in insurance issued on an industrial or otherspecial basis. (C) To be of real economic value, it shall not be necessary thatany benefit or benefits cover the full amount of any loss which mightbe suffered by reason of the occurrence of any hazard or eventinsured against. (8) If it substitutes a specified indemnity upon the occurrence ofaccidental death for any benefit of the policy, other than aspecified indemnity for dismemberment, which would accrue prior tothe time of that death or if it contains any provision which has theeffect, other than at the election of the insured exercisable withinnot less than 20 days in the case of benefits specifically limited tothe loss by removal of one or more fingers or one or more toes orwithin not less than 90 days in all other cases, of doing any of thefollowing: (A) Of substituting, upon the occurrence of the loss of bothhands, both feet, one hand and one foot, the sight of both eyes orthe sight of one eye and the loss of one hand or one foot, somespecified indemnity for any or all benefits under the policy unlessthe indemnity so specified is equal to or greater than the total ofthe benefit or benefits for which such specified indemnity issubstituted and which, assuming in all cases that the insured wouldcontinue to live, could possibly accrue within four years from thedate of such dismemberment under all other provisions of the policyapplicable to the particular event or events (as distinguished fromcharacter of physical injury or illness) causing the dismemberment. (B) Of substituting, upon the occurrence of any otherdismemberment some specified indemnity for any or all benefits underthe policy unless the indemnity so specified is equal to or greaterthan one-fourth of the total of the benefit or benefits for which thespecified indemnity is substituted and which, assuming in all casesthat the insured would continue to live, could possibly accrue withinfour years from the date of the dismemberment under all otherprovisions 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 ofany dismemberment for any benefit of the policy which would accrueprior to the time of dismemberment. As used in this section, loss of a hand shall be severance at orabove the wrist joint, loss of a foot shall be severance at or abovethe ankle joint, loss of an eye shall be the irrecoverable loss ofthe entire sight thereof, loss of a finger shall mean at least oneentire phalanx thereof and loss of a toe the entire toe. (9) If it contains provision, other than as provided in Section10369.3, reducing any original benefit more than 50 percent onaccount of age of the insured. (10) If the insuring clause or clauses contain no reference to theexceptions, limitations, and reductions (if any) or no specificreference to, or brief statement of, each abnormally restrictiveexception, limitation, or reduction. (11) If it contains benefit or benefits for loss or losses fromspecified diseases only unless: (A) All of the diseases so specified in each provision grantingthe benefits fall within some general classification based upon thefollowing: (i) The part or system of the human body principally subject toall such diseases. (ii) The similarity in nature or cause of such diseases. (iii) In case of diseases of an unusually serious nature andprotracted course of treatment, the common characteristics of allsuch diseases with respect to severity of affliction and cost oftreatment. (B) The policy is entitled and each provision granting thebenefits is separately captioned in clearly understandable words soas to accurately describe the classification of diseases covered andexpressly point out, when that is the case, that not all diseases ofthe classification are covered. (12) If it does not contain provision for a grace period of atleast the number of days specified below for the payment of eachpremium falling due after the first premium, during which graceperiod the policy shall continue in force provided, that the graceperiod to be included in the policy shall be not less than seven daysfor policies providing for weekly payment of premium, not less than10 days for policies providing for monthly payment of premium and notless than 31 days for all other policies. (13) If it fails to conform in any respect with any law of thisstate. (c) The commissioner shall not approve any disability policycovering hospital, medical, or surgical expenses unless thecommissioner finds that the application conforms to both of thefollowing 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, shallcontain clear and unambiguous questions designed to ascertain thehealth condition or history of the applicant. (2) The application questions designed to ascertain the healthcondition or history of the applicant shall be based on medicalinformation that is reasonable and necessary for medical underwritingpurposes. The application shall include a prominently displayednotice that states: "California law prohibits an HIV test from being required or usedby health insurance companies as a condition of obtaining healthinsurance coverage." (d) Nothing in this section authorizes the commissioner toestablish or require a single or standard application form forapplication questions. (e) The commissioner may, from time to time as conditions warrant,after notice and hearing, promulgate such reasonable rules andregulations, and amendments and additions thereto, as are necessaryor convenient, to establish, in advance of the submission ofpolicies, the standard or standards conforming to subdivision (b), bywhich he or she shall disapprove or withdraw approval of anydisability policy. In promulgating any such rule or regulation the commissioner shallgive consideration to the criteria herein established and to thedesirability of approving for use in policies in this state uniformprovisions, nationwide or otherwise, and is hereby granted theauthority to consult with insurance authorities of any other stateand their representatives individually or by way of convention orcommittee, to seek agreement upon those provisions. Any such rule or regulation shall be promulgated in accordancewith the procedure provided in Chapter 3.5 (commencing with Section11340) of Part 1 of Division 3 of Title 2 of the Government Code. (f) The commissioner may withdraw approval of filing of any policyor other document or matter required to be approved by thecommissioner, or filed with him or her, by this chapter when thecommissioner would be authorized to disapprove or refuse filing ofthe same if originally submitted at the time of the action ofwithdrawal. Any such withdrawal shall be in writing and shall specify reasons.An insurer adversely affected by any such withdrawal may, within aperiod of 30 days following mailing or delivery of the writingcontaining the withdrawal, by written request secure a hearing todetermine whether the withdrawal should be annulled, modified, orconfirmed. Unless, at any time, it is mutually agreed to thecontrary, a hearing shall be granted and commenced within 30 daysfollowing filing of the request and shall proceed with reasonabledispatch to determination. Unless the commissioner in writing in thewithdrawal, or subsequent thereto, grants an extension, any suchwithdrawal shall, in the absence of any such request, be effective,prospectively and not retroactively, on the 91st day following themailing or delivery of the withdrawal, and, if request for thehearing is filed, on the 91st day following mailing or delivery ofwritten 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 ofthe Government Code. (h) Except as provided in subdivision (k), any action taken by thecommissioner under this section is subject to review by the courtsof this state and proceedings on review shall be in accordance withthe 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 theeffective date of the action taken by the commissioner. No action ofthe commissioner shall become effective before the expiration of 20days after written notice and a copy thereof are mailed or deliveredto the person adversely affected, and any action so submitted forreview shall not become effective for a further period of 15 daysafter the filing of the petition in court. The court may stay theeffectiveness thereof for a longer period. (i) This section shall be liberally construed to effectuate thepurpose and intentions herein stated; but shall not be construed togrant the commissioner power to fix or regulate rates for disabilityinsurance or prescribe a standard form of disability policy, exceptthat the commissioner shall prescribe a standard supplementarydisclosure form for presentation with all disability insurancepolicies, pursuant to Section 10603. (j) This section shall be effective on and after July 1, 1950, asto 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 stateirrespective of when its form may have been submitted or approved,and prior to those dates the provisions of law in effect on January1, 1949, shall apply to those policies. (k) Any such policy issued by an insurer to an insured on a formapproved by the commissioner, and in accordance with the conditions,if any, contained in the approval, at a time when that approval isoutstanding shall, as between the insurer and the insured, or anyperson claiming under the policy, be conclusively presumed to complywith, and conform to, this section.10291.6.  Insofar as the reduction of any original benefit onaccount of age of the insured is concerned, a noncancellable policymay be approved if such reduction does not exceed that permitted bySection 10291.5(b)(9), or if the only such reduction is one havingthe effect of reducing the limit of the period for which benefits forloss of time resulting from total disability will be paid to aperiod ending on the date on which the insured's right to continuethe policy in force expires and if the policy also provides that suchlimit shall not in any case be less than 12 months.10292.  A supplemental contract of the kind mentioned in Section10271 shall not be delivered or issued for delivery to any person inthis State until a copy of the form thereof is submitted to andapproved by the commissioner. If such supplemental contract is anintegral part of a contract of life insurance, the entire contractshall be submitted to the commissioner but his power of approval ordisapproval is limited to the supplemental portion described in suchsection and such other portions as relate to such supplementalportion. The commissioner may make reasonable rules and regulationsconcerning the provisions in such contracts and their submission toand approval by him as are necessary, advisable or convenient toenforce the standards set forth in this chapter found by him to beapplicable to any such supplemental contract; provided, however, thatnone of the standards set forth in Section 10291.5 except those insubsections (a) and (b)(1) thereof, shall be deemed applicable tosuch supplemental contract.10293.  (a) The commissioner shall, after notice and hearing,withdraw approval of an individual or mass-marketed policy ofdisability insurance if after consideration of all relevant factorsthe commissioner finds that the benefits provided under the policyare unreasonable in relation to the premium charged. The commissionershall, from time to time as conditions warrant, after notice andhearing, promulgate such reasonable rules and regulations, andamendments and additions thereto, as are necessary to establish thestandard or standards by which the commissioner shall withdrawapproval of any such policy. Any such rule or regulation shall bepromulgated in accordance with the procedure provided in Chapter 3.5(commencing with Section 11340) of Part 1 of Division 3 of Title 2 ofthe Government Code, and shall be effective 90 days after adoptionby the commissioner. (b) Unless the commissioner specifies otherwise in writing in thewithdrawals, or subsequent thereto, grants an extension, any suchwithdrawal shall be effective prospectively and not retroactively onthe 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 disabilityinsurance policy which is offered by means of direct responsesolicitation through a sponsoring organization, or through the mailsor other mass communications media and under which a person insuredpays all or substantially all of the cost of his or her insurance. (2) "Direct response solicitation" means any offer by an insurerto persons in this state, either directly or through a third party,to effect health insurance coverage which enables the individual toapply or enroll for the insurance on the basis of the offer. It shallnot include solicitation for insurance through an employer benefitplan which is defined in Public Law 93-406, nor shall it include sucha solicitation through the individual's creditor with respect tocredit health insurance.