CHAPTER 5. General Regulation of Life Insurers [10430. - 10509.946.]
Chapter 5 enacted by Stats. 1935, Ch. 145.
§§ 10430–10509.946 · 143 sections
ARTICLE 1. Restrictions on Business §§ 10430–10436 · 7 sections
- § 10430 An admitted life insurer shall not issue or deliver in this State, any securities or any special or advisory board or other contracts of any kind promising…
- § 10431 A life insurer which, as an inducement to insurance, issues or permits its agents, officers, or employees to issue any such securities or contracts in this…
- § 10432 A corporation or stock company, acting as agent of a life insurer and its agents, officers, or employees shall not sell, agree or offer to sell, or give or…
- § 10433 Upon proof, after notice and hearing, that any such insurer or agent has violated any of the provisions of sections 10430, 10431, or 10432, the commissioner…
- § 10434 (a) An admitted life insurer shall not pay or contract to pay, directly or indirectly, to any of the parties specified in subdivision (b) any commission or…
- § 10435 Whenever any insurer violates Section 10434, the commissioner may revoke its certificate of authority or refuse to issue a certificate of authority to that…
- § 10436 An admitted life insurer may issue a rider to a policy of life insurance for the purpose of providing coverage for long-term care, if the rider has been…
ARTICLE 1a. Regulation of Internal Affairs of Mutual Insurers §§ 10440–10442 · 3 sections
- § 10440 In any meeting of members of a domestic mutual insurer writing classes of insurance which include life or disability insurance, the presence in person or by…
- § 10441 The provisions of Section 10440 shall not apply to any of the transactions, meetings, or votes described in Sections 1001, 1103, and 1900 of the Corporations…
- § 10442 Except as otherwise provided in this article or in the other provisions of this code, the internal affairs of every domestic mutual insurer writing classes of…
ARTICLE 2. Registration of Life Policies §§ 10450–10463 · 15 sections
- § 10450 Any insurer transacting life insurance in this State on September 30, 1939, may register its policies with the commissioner in the manner and subject to the…
- § 10450.5 An insurer which is not registering its policies pursuant to the provisions of this article on September 30, 1939, shall not thereafter be permitted to…
- § 10450.6 Any insurer registering its policies pursuant to this article on June 30, 1939, which fails prior to September 1, 1941, to file with the commissioner an…
- § 10451 When an insurer elects to register any of its policies, it shall register every policy thereafter issued by it until it discontinues registration.
- § 10452 Such registration shall in each case show the name and age of the insured, number and date of the policy and the kind and amount of insurance.
- § 10454 An insurer registering policies shall maintain a special deposit of securities with the commissioner for the benefit of such registered policies. Such…
- § 10455 The commissioner shall give his receipt for the securities and the State shall be responsible for the custody and safe return of any securities so deposited.
- § 10456 Such deposit shall be maintained in an amount equal to the full net value of all policies registered up to the time of making the deposit, less the amount…
- § 10457 Upon receipt of such securities, the commissioner shall immediately deposit them in the State Treasury in accordance with the provisions of Sections 940 to…
- § 10458 Such insurer may at any time withdraw any excess of such securities above the required amount upon satisfying the commissioner by written proof that such…
- § 10459 If such insurer owns the building in which it has its principal office and the land upon which it stands, or if it owns other real property located in this…
- § 10460 Such mortgage may be deposited in the State treasury as part of the securities required by this article. Such mortgage is withdrawable in like manner with…
- § 10461 The commissioner may release any such mortgage or may foreclose it in case such foreclosure becomes necessary.
- § 10462 Should any insurer thus registering policies become insolvent, the commissioner may reinsure all or any part of such registered policies, using the securities…
- § 10463 The commissioner shall require in advance, in lawful money of the United States, as a fee for registering each policy as provided by this article, twenty-five…
ARTICLE 3. Valuation of Life Policies §§ 10478–10489 · 13 sections
- § 10478 This article is applicable only to policies and contracts issued prior to the operative date as to such policies or contracts of Article 3a, Chapter 1, Part 2,…
- § 10479 The commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies…
- § 10479.5 When the commissioner has valued the reserve liabilities of an insurer as provided by this article, he or she may upon request of the insurer issue his or her…
- § 10480 On or before the first day of March of each year every domestic incorporated life insurer shall furnish the commissioner the necessary data for determining the…
- § 10481 Every admitted foreign life insurer shall, upon the written demand of the commissioner, furnish him or her, at such time as he designates, the requisite data…
- § 10482 Except as provided in Sections 10484 and 10485, and except as provided in Section 10489.7 for benefits purchased under group annuity and pure endowment…
- § 10483 When the laws of any other State require a valuation of the outstanding policies of a domestic life insurer by any standard of valuation different from that…
- § 10484 In the case of insurance issued by a domestic insurer authorized to do business in a foreign country upon the lives of residents of that country, the…
- § 10485 Any life insurer issuing policies of group life insurance may value such policies on any accepted table of mortality with interest assumption adopted by the…
- § 10486 All policies of group insurance shall be segregated by the insurer into a separate class and the mortality experience kept separate. The number of policies,…
- § 10486.9 (a) As prescribed in subdivision (b), an insurer may maintain reserves on a one year preliminary term basis on a life, term or endowment policy if by its terms…
- § 10488 Reserves for all policies and contracts to which this article applies may be calculated, at the option of the insurer, according to any standards which produce…
- § 10489 Any insurer which at any time shall have adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum…
ARTICLE 3a. Standard Valuation Law §§ 10489.1–10489.992 · 19 sections
- § 10489.1 (a) This article shall be known as the Standard Valuation Law. (b) For the purposes of this article, the following definitions shall apply: (1) “Accident and…
- § 10489.12 (a) For policies and contracts issued prior to the operative date of the valuation manual, both of the following shall be satisfied: (1) The commissioner shall…
- § 10489.15 (a) Each of the following shall apply to actuarial opinions submitted prior to the operative date of the valuation manual: (1) For an actuarial opinion, every…
- § 10489.2 For a computation of minimum standard, except as provided in Sections 10489.3, 10489.4, and 10489.95, the minimum standard for the valuation of policies and…
- § 10489.3 (a) Except as provided in Section 10489.4, the minimum standard of valuation for individual annuity and pure endowment contracts issued on or after the…
- § 10489.4 (a) The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest…
- § 10489.5 (a) Except as otherwise provided in Sections 10489.6, 10489.9, and 10489.95, reserves according to the commissioners reserve valuation method, for the life…
- § 10489.6 (a) This section shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement…
- § 10489.7 (a) A company’s aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, shall not be less than the aggregate…
- § 10489.8 (a) Reserves for any category of policies, contracts, or benefits established by the commissioner may be calculated, at the option of the company, according to…
- § 10489.9 (a) If in any contract year the gross premium charged by any life insurer on any policy or contract is less than the valuation net premium for the policy or…
- § 10489.93 In the case of a plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurance company…
- § 10489.94 (a) The commissioner may issue a bulletin to provide tables of select mortality factors and rules for their use, rules concerning a minimum standard for the…
- § 10489.95 For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is…
- § 10489.96 (a) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of…
- § 10489.97 (a) A company shall establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the…
- § 10489.98 A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual.
- § 10489.99 (a) For purposes of this section, “confidential information” means: (1) A memorandum in support of an opinion submitted pursuant to Section 10489.15 and any…
- § 10489.992 (a) (1) The commissioner may hire and assign department staff, and retain nondepartment actuaries and other consultants, to assist the commissioner with…
ARTICLE 4. Qualifications and Exemptions §§ 10490–10505.1 · 22 sections
- § 10490 This article is applicable only to life and disability insurance. Except as otherwise expressly permitted by this code or when transacted pursuant to or…
- § 10490.1 Any nonprofit incorporated or unincorporated mutual benefit association in existence prior to January 1, 1945, which confines its membership to officers and…
- § 10490.2 If an association described in Section 10490.1 has operated pursuant thereto since January 1, 1945, it may procure a certificate of exemption from the…
- § 10491 Persons possessing a valid and unrevoked certificate of authority to transact life or disability or life and disability insurance issued by the commissioner…
- § 10492 Any incorporated or unincorporated benefit and relief association organized on or after January 15, 1951, of either nonprofit or charitable character may, if…
- § 10493 An incorporated or unincorporated benefit and relief association organized before January 15, 1951, may procure a certificate of exemption from the…
- § 10494 Such a benefit and relief association shall not provide for payment of a death benefit of more than two thousand dollars ($2,000) or for disability benefits of…
- § 10494.2 Any incorporated or unincorporated benefit and relief association, the membership and insurance in which are restricted to the ministers, priests, rabbis,…
- § 10494.5 Any employer maintaining a plan for furnishing disability insurance benefits to his employees for nonindustrial and nonoccupational injuries or sickness, under…
- § 10494.6 Any employer who qualifies for a certificate of exemption under Section 10494.5 by virtue of which certificate he or she maintains a plan for furnishing…
- § 10494.7 With respect to the supplemental plan described in Section 10494.6, the commissioner may, in addition to the regulations permitted by Section 10498.6,…
- § 10495 A certificate of exemption may be procured from the commissioner by filing with him or her certified copies of the articles of incorporation, association,…
- § 10496 Any person transacting life or disability insurance without a certificate of authority so to do issued by the commissioner shall not give, allow, or promise to…
- § 10497 If the commissioner finds that an applicant for a certificate of exemption meets the applicable requirements of this article and those requirements of this…
- § 10498 An applicant for a certificate of exemption must comply with, and the possessor of a certificate of exemption is subject to, the following provisions of this…
- § 10498.5 If a holder of a certificate of exemption receives or maintains funds for any purpose other than administering and providing the benefits that make it subject…
- § 10498.6 The commissioner may from time to time issue regulations which shall govern persons holding certificates of exemption under this article, setting forth…
- § 10499 The commissioner may at any time notify any person possessing a certificate of exemption that the commissioner has grounds to believe that it is violating any…
- § 10500 Every person not expressly exempted by the provisions of this code that transacts life or disability insurance without a valid and unrevoked certificate of…
- § 10501 Any person subject to this article who upon January 1, 1943, was paying, allowing, or promising to pay benefits in the event of death or disability, or…
- § 10505 (a) A labor union having all of the following characteristics is exempt from the provisions of this code relating to life and disability insurance in respect…
- § 10505.1 (a) (1) Any nonprofit cooperative assessment association, the membership and insurance in which are restricted to members of a labor union, is exempt from the…
ARTICLE 5. Pension Funds, Separate Accounts §§ 10506–10506.5 · 6 sections
- § 10506 (a) Any domestic life insurance company may, after adoption of a resolution by its board of directors, allocate to one or more separate accounts, in accordance…
- § 10506.1 The commissioner shall require the payment of two thousand eight hundred twenty-three dollars ($2,823), as a fee for the determination of qualification…
- § 10506.2 (a) The commissioner shall require the payment in advance of two thousand eight hundred twenty-three dollars ($2,823), as a fee for the examination and…
- § 10506.3 (a) The commissioner shall adopt appropriate administrative regulations governing modified guaranteed annuities. Modified guaranteed annuities shall be subject…
- § 10506.4 (a) An admitted life insurer that is financially qualified pursuant to subdivision (b) and complies with the provisions of this section and those of Section…
- § 10506.5 (a) For the purposes of this section, “guaranteed living benefit” means a benefit in a variable annuity or a variable life insurance contract providing that…
ARTICLE 6. Investment Return Assurance §§ 10507–10507.4 · 5 sections
- § 10507 (a) Any life insurance company authorized to do business in this state shall be permitted to issue and deliver individual policies in connection with the…
- § 10507.1 The commissioner shall require the payment of three hundred seventy-four dollars ($374), as a fee for the determination of qualification required by Section…
- § 10507.2 An investment return assurance policy evidencing such insurance, shall not be issued or delivered in this state until a copy of the form thereof is filed with…
- § 10507.3 No policy of investment return assurance shall be delivered or issued for delivery to any person in this state unless each such policy does all of the…
- § 10507.4 In furtherance of the purpose of this article, the commissioner may make reasonable rules and regulations. The rules and regulations shall be adopted, amended,…
ARTICLE 6.5. Portfolio Indexing § 10507.5 · 1 section
- § 10507.5 (a) An insurer may deliver or issue for delivery one or more policies, contracts, or agreements that establish the insurer’s obligations under the policies,…
ARTICLE 7. Records §§ 10508–10508.8 · 5 sections
- § 10508 (a) It is the obligation of every insurer admitted in this state to transact life or disability insurance, or both, to maintain certain records specified in…
- § 10508.5 It shall be the obligation of each life, life and disability, and disability insurance agent and any other agent and insurer to preserve and maintain all…
- § 10508.6 (a) The Legislature finds and declares that there is no statutory authority for the commissioner to gather information or data on life insurance, annuity, or…
- § 10508.7 A person subject to the requirements of Section 10508.6 who submits any false information in connection with a request for information or data pursuant to that…
- § 10508.8 The commissioner shall ensure, to the furthest extent possible, that any data call issued by him or her does not conflict with any similar data call or data…
ARTICLE 8. Requirements for Replacement of Life Insurance and Annuity Policies §§ 10509–10509.9 · 10 sections
- § 10509 The purpose of this article is the following: (a) To regulate the activities of insurers and agents with respect to the replacement of existing life insurance…
- § 10509.1 This article is applicable to all individual life insurance and annuity policies.
- § 10509.2 (a) “Replacement” means any transaction in which new life insurance or a new annuity is to be purchased, and it is known or should be known to the proposing…
- § 10509.3 (a) Unless otherwise specifically included, this article does not apply to the following: (1) Credit life insurance. (2) Group life insurance or group…
- § 10509.4 (a) Each agent who accepts an application shall submit to the insurer with which an application for life insurance or annuity is presented, or as part of each…
- § 10509.5 Every life insurer shall do the following: (a) Inform its field representatives or other personnel responsible for compliance with this article of the…
- § 10509.6 Every life insurer that uses an agent in a life insurance or annuity sale shall do the following: (a) Require with or as part of each completed application for…
- § 10509.7 (a) If in the solicitation of a direct response sale, an insurer does not propose the replacement, and a replacement is involved, the insurer shall send to the…
- § 10509.8 (a) A violation of this article shall occur if an agent or insurer recommends the replacement or conservation of an existing policy by use of a materially…
- § 10509.9 (a) Any agent or other person or entity engaged in the business of insurance, other than an insurer, who violates this article is liable for an administrative…
ARTICLE 9. Suitability Requirements for Annuity Transactions before January 1, 2025 §§ 10509.910–10509.919 · 10 sections
- § 10509.910 The purpose of this article is to require insurers to establish a system to supervise recommendations and to set forth standards and procedures for…
- § 10509.911 (a) This article shall apply to any recommendation to purchase, exchange, or replace an annuity made to a consumer that results in the purchase, exchange, or…
- § 10509.912 Unless otherwise specifically included, this article shall not apply to transactions involving any of the following: (a) Direct response solicitations where…
- § 10509.913 (a) “Annuity” means an annuity that is an insurance product under California law that is individually solicited, regardless of whether or not the product is…
- § 10509.914 (a) In recommending to a consumer the purchase of an annuity or the exchange of an annuity that results in another insurance transaction or series of insurance…
- § 10509.915 (a) A producer shall not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the…
- § 10509.916 (a) An insurer is responsible for compliance with this article. If a violation occurs, either because of the action or inaction of the insurer or its insurance…
- § 10509.917 (a) Insurers and insurance producers shall maintain or be able to make available to the commissioner records of the information collected from the consumer and…
- § 10509.918 The commissioner shall, from time to time as conditions warrant, after notice and hearing, adopt reasonable rules and regulations, and amendments and additions…
- § 10509.919 This article shall apply to both of the following: (a) A recommendation of an annuity made before January 1, 2025, that results in the purchase, exchange, or…
ARTICLE 9.5. Suitability Requirements for Annuity Transactions on or after January 1, 2025 §§ 10509.9200–10509.9210 · 11 sections
- § 10509.9200 The purpose of this article is to require producers, as defined in Section 10509.9203, to act in the best interest of the consumer when making a recommendation…
- § 10509.9201 (a) This article shall apply to any sale of, or recommendation made to a consumer to purchase, exchange, or replace, as defined in paragraph (14) of…
- § 10509.9202 Unless otherwise specifically included, this article shall not apply to transactions involving any of the following: (a) Direct response solicitations where…
- § 10509.9203 (a) For purposes of this article: (1) “Annuity” means an annuity that is an insurance product under California law that is individually solicited, whether the…
- § 10509.9204 Insurers and producers have the following duties to ensure that annuities that are recommended are in the consumer’s best interest: (a) Best Interest…
- § 10509.9205 (a) A producer shall not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the…
- § 10509.9206 (a) An insurer is responsible for compliance with this article. If a violation occurs, either because of the action or inaction of the insurer or its producer,…
- § 10509.9207 (a) Insurers, general agents, independent agencies, and producers shall maintain or be able to make available to the commissioner records of the information…
- § 10509.9208 The commissioner shall, from time to time as conditions warrant, after notice and hearing, adopt reasonable rules and regulations, and amendments and additions…
- § 10509.9209 (a) A life insurer shall provide to all consumers who purchase an annuity a buyer’s guide that shall be delivered as a stand-alone document with the annuity or…
- § 10509.9210 This article shall apply only to sales or recommendations of annuities made on or after January 1, 2025.
ARTICLE 11. Life Insurance Proceeds Disclosure Act of 2011 §§ 10509.930–10509.938 · 9 sections
- § 10509.930 This act shall be known and may be cited as the Life Insurance Proceeds Disclosure Act of 2011.
- § 10509.931 The Legislature finds and declares all of the following: (a) The occasion of the death of a spouse, parent, child, partner, or other loved one is a difficult…
- § 10509.932 The purpose of this act is to establish disclosure standards regarding the payment of life insurance benefits to a beneficiary by means of a retained asset…
- § 10509.933 For the purposes of this article, the following terms have the following definitions: (a) “Insurer” means an insurance company that delivers or issues for…
- § 10509.934 The insurer shall provide the beneficiary of life insurance proceeds, at the time a claim is made, written information describing the settlement options…
- § 10509.935 If the insurer settles life insurance benefits through a retained asset account, the insurer shall provide the beneficiary with a supplemental contract that…
- § 10509.936 If the life insurance benefits are placed in a retained asset account, the insurer shall send the beneficiary at least one statement per quarter, and a…
- § 10509.937 The insurer shall provide the following written disclosures to the beneficiary before the retained asset account is established, unless the insurer has already…
- § 10509.938 An insurer that fails to conform to the requirements provided under this article shall be subject to Article 6.5 (commencing with Section 790) of Chapter 1 of…
ARTICLE 12. Unclaimed Life Insurance and Annuities Act §§ 10509.940–10509.946 · 7 sections
- § 10509.940 This act shall be known and may be cited as the Unclaimed Life Insurance and Annuities Act.
- § 10509.941 The purpose of this article is to provide standards for: (a) Identifying a deceased individual whose death may require an insurer to pay benefits or proceeds…
- § 10509.942 For purposes of this article: (a) “Annuity contract” does not include an annuity used to fund an employment-based retirement plan or program if either of the…
- § 10509.943 (a) This article applies to an in-force policy, annuity contract, or retained asset account, a policy or annuity contract effective on or after July 1, 2020,…
- § 10509.944 (a) An insurer shall comply with the following requirements for performing a comparison of a policy, annuity contract, or retained asset account against the…
- § 10509.945 (a) Failure to meet a requirement of this article knowingly or with such frequency as to constitute a general practice is an unfair and deceptive act pursuant…
- § 10509.946 The provisions of this article are severable. If any provision of this article or its application is held invalid, that invalidity shall not affect other…