State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 381, which of the following is a required provision that every insurance policy must contain?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Section 381 requires every California policy to specify six items: the parties between whom the contract is made, the property or life insured, the interest of the insured (if not the absolute owner), the risks insured against, the period during which the insurance is to continue, and the premium (or the basis for calculating it). The insurer's financial rating is NOT among them — ratings are marketing information, not a statutory policy requirement.
Why the other options are wrong
- A) Financial ratings are published by rating agencies as marketing data; no California statute requires them to appear in the policy.
- C) A guaranteed cash value table is required in permanent life policies by other provisions, but it is not one of the universal Section 381 requirements.
- D) Dividends are payable only in participating policies and are never a required policy provision.
Memory hook
Section 381's six-pack: parties, property, interest, risks, period, premium. Ratings and dividends are extras, not requirements.