Under California Insurance Code Section 10270.5, group disability insurance is issued under a master policy to...
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 10270.5 defines group disability insurance in California: the policy is written under a master policy issued to a federal or state government, a corporation or individual employer, a union, an association of employers, or a trustee, and it must cover all employees (or a class determined by employment conditions) with no fewer than two employees, using a plan that precludes individual selection of the amount of coverage. The insureds receive certificates under the master contract rather than individual policies. This eligibility framework is a distinctly California rule and is anchored to the CIC, so the question is marked as a California-specific item.
Why the other options are wrong
- B) Group coverage requires a qualifying master policyholder relationship; an unrelated individual cannot hold a group policy.
- C) HMOs are delivery systems, not the sole permissible master policyholders under Section 10270.5.
- D) The statute requires a bona fide employment or association relationship, not any organization.
Memory hook
A master policy needs a true group — employer, government, association, trustee — and two lives.