California Legislature—2013–14 First Extraordinary Session

Assembly Bill No. 4

Introduced by Assembly Member Wilk

(Coauthor: Assembly Member Conway)

May 16, 2013

An act to amend Sections 1389.1, 1389.2, 1389.4, 1389.5, and 1389.8 of, to add Section 1366.30 to, and to add Chapter 9 (commencing with Section 127670) to Part 2 of Division 107 of, the Health and Safety Code, and to amend Sections 10113.95, 10119.1, 10119.3, 10270.98, 10273.4, 10273.6, and 10291.5 of, to add Section 10128.60 to, and to repeal Section 10270.99 of, the Insurance Code, relating to health care.

LEGISLATIVE COUNSEL’S DIGEST

AB 4, as introduced, Wilk. Health care.

(1) Existing law provides for the regulation of health insurers by the Insurance Commissioner. Existing law prohibits group health insurance policies and individual health insurance policies from canceling or refusing to renew plans and policies, except under specified circumstances, including, but not limited to, nonpayment of the required premiums if the appropriate party has been notified and given at least a 30-day grace period or other period of time as required by the federal Public Health Service Act. The health insurer is required to continue to provide coverage during the grace period.

This bill would require that individuals receiving coverage through the California Health Benefit Exchange and who are receiving a tax credit pursuant to the federal Patient Protection and Affordable Care Act (PPACA) would be subject to the required grace period and provisions of coverage during the grace period, if any, as provided by PPACA.

(2) Existing law authorizes group health insurance policies to provide, among other things, that the benefits payable are subject to reduction if the insured has any other coverage, other than individual policies or contracts, providing hospital, surgical, or medical benefits, resulting in the insured being eligible for more than 100% of the covered expenses. Except as permitted and except in the case of group practice prepayment plan contracts that do not provide for coordination of benefits, to the extent they provide for a reduction of benefits on account of other coverage with respect to emergency services that are not obtained from providers that contract with the plan, a group or individual health insurance policy or service contract issued by nonprofit hospital service plans, operating as provided, is not allowed to limit payment of benefits by reason of the existence of other insurance or service coverage.

This bill would delete the provisions prohibiting a group or individual health insurance policy or service contract issued by nonprofit hospital service plans, operating as provided, from limiting payment of benefits by reason of the existence of other insurance or service coverage. The bill would add individual health insurance policies to those policies authorized to reduce benefits where the insured has other coverage providing hospital, surgical, or medical benefits, resulting in the insured being eligible for more than 100% of the covered expenses. The bill would also make conforming changes.

(3) Existing law, the California Continuation Benefits Replacement Act (Cal-COBRA), provides for a continuation of health care coverage without evidence of insurability for up to 36 months after the date a qualified beneficiary’s benefits would end due to a qualifying event, including the exhaustion of benefits under federal COBRA. Existing law also provides for certain underwriting practices regarding health care service plans and health insurance policies, including, but not limited to, an agent, broker, solicitor, solicitor firm, or representative who assists an applicant in submitting an application to a health care service plan or health insurer being required to attest in writing to the completeness and accuracy of the application to the best of his or her knowledge and that he or she explained to the applicant and was understood regarding the risk of providing inaccurate information.

This bill would make Cal-COBRA and certain underwriting requirements inoperative on January 1, 2014, and, if certain provisions of the federal Patient Protection and Affordable Care Act are repealed or amended, those provisions would become operative as of the date of the repeal or amendment.

(4)  The federal Patient Protection and Affordable Care Act (PPACA) enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, PPACA authorizes the federal Secretary of Health and Human Services to award states with demonstration grants to develop and test alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers and organizations. States interested in receiving a grant are required to develop an alternative to current tort litigation and submit an application to the secretary.

This bill would require the Secretary of California Health and Human Services to submit an application on behalf of the state to the federal Department of Health and Human Services to receive a grant for state demonstration programs to evaluate alternatives to current medical tort litigation, as authorized by PPACA. The bill would require the secretary to write the application to design a program to create health courts based upon a no-fault process to improve the injury resolution of liability. The bill would specify what items a patient would need to prove under the health court demonstration program.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1366.30 is added to the Health and Safety
Code, immediately following Section 1366.29, to read:

1366.30.  

(a) This article shall become inoperative on January
1, 2014.

(b) If Section 5000A of the Internal Revenue Code, as added
by Section 1501 of PPACA, is repealed or amended to no longer
apply to the individual market, as defined in Section 2791 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-4), this
article shall become operative as of the date of the repeal or
amendment.

(c) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

SEC. 2.  

Section 1389.1 of the Health and Safety Code is
amended to read:

1389.1.  

(a) The director shall not approve any plan contract
unless the director finds that the application conforms to both of
the following requirements:

(1) All applications for coverage begin delete which end delete begin insert that end insert include
health-related questions shall contain clear and unambiguous
questions designed to ascertain the health condition or history of
the applicant.

(2) The application questions related to an applicant’s health
shall be based on medical information that is reasonable and
necessary for medical underwriting purposes. The application shall
include a prominently displayed notice that shall read:

“California law prohibits an HIV test from being required or
used by health care service plans as a condition of obtaining
coverage.”

(b) Nothing in this section shall authorize the director to
establish or require a single or standard application form for
application questions.

begin insert

(c) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(d) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 3.  

Section 1389.2 of the Health and Safety Code is
amended to read:

1389.2.  

begin insert (a) end insert begin insert   end insert At the request of the director, a health care service
plan shall provide a written statement of the actuarial basis for any
medical underwriting decision on any application form, or contract
issued or delivered to, or denied a resident of this state.

begin insert

(b) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(c) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 4.  

Section 1389.4 of the Health and Safety Code is
amended to read:

1389.4.  

(a) A full service health care service plan that issues,
renews, or amends individual health plan contracts shall be subject
to this section.

(b) A health care service plan subject to this section shall have
written policies, procedures, or underwriting guidelines establishing
the criteria and process whereby the plan makes its decision to
provide or to deny coverage to individuals applying for coverage
and sets the rate for that coverage. These guidelines, policies, or
procedures shall assure that the plan rating and underwriting criteria
comply with Sections 1365.5 and 1389.1 and all other applicable
provisions of state and federal law.

(c) On or before June 1, 2006, and annually thereafter, every
health care service plan shall file with the department a general
description of the criteria, policies, procedures, or guidelines the
plan uses for rating and underwriting decisions related to individual
health plan contracts, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage or
severely limit the plan products for which they would be eligible.
A plan may comply with this section by submitting to the
department underwriting materials or resource guides provided to
plan solicitors or solicitor firms, provided that those materials
include the information required to be submitted by this section.

(d) Commencing January 1, 2011, the director shall post on the
department’s Internet Web site, in a manner accessible and
understandable to consumers, general, noncompany specific
information about rating and underwriting criteria and practices
in the individual market and information about the California Major
Risk Medical Insurance Program (Part 6.5 (commencing with
Section 12700) of Division 2 of the Insurance Code) and the federal
temporary high risk pool established pursuant to Part 6.6
(commencing with Section 12739.5) of Division 2 of the Insurance
Code. The director shall develop the information for the Internet
Web site in consultation with the Department of Insurance to
enhance the consistency of information provided to consumers.
Information about individual health coverage shall also include
the following notification:

“Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could
be denied coverage entirely.”

(e) Nothing in this section shall authorize public disclosure of
company specific rating and underwriting criteria and practices
submitted to the director.

(f) This section shall not apply to a closed block of business, as
defined in Section 1367.15.

begin insert

(g) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(h) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 5.  

Section 1389.5 of the Health and Safety Code is
amended to read:

1389.5.  

(a) This section shall apply to a health care service
plan that provides coverage under an individual plan contract that
is issued, amended, delivered, or renewed on or after January 1,
2007.

(b) At least once each year, the health care service plan shall
permit an individual who has been covered for at least 18 months
under an individual plan contract to transfer, without medical
underwriting, to any other individual plan contract offered by that
same health care service plan that provides equal or lesser benefits,
as determined by the plan.

“Without medical underwriting” means that the health care
service plan shall not decline to offer coverage to, or deny
enrollment of, the individual or impose any preexisting condition
exclusion on the individual who transfers to another individual
plan contract pursuant to this section.

(c) The plan shall establish, for the purposes of subdivision (b),
a ranking of the individual plan contracts it offers to individual
purchasers and post the ranking on its Internet Web site or make
the ranking available upon request. The plan shall update the
ranking whenever a new benefit design for individual purchasers
is approved.

(d) The plan shall notify in writing all enrollees of the right to
transfer to another individual plan contract pursuant to this section,
at a minimum, when the plan changes the enrollee’s premium rate.
Posting this information on the plan’s Internet Web site shall not
constitute notice for purposes of this subdivision. The notice shall
adequately inform enrollees of the transfer rights provided under
this section, including information on the process to obtain details
about the individual plan contracts available to that enrollee and
advising that the enrollee may be unable to return to his or her
current individual plan contract if the enrollee transfers to another
individual plan contract.

(e) The requirements of this section shall not apply to the
following:

(1) A federally eligible defined individual, as defined in
subdivision (c) of Section 1399.801, who is enrolled in an
individual health benefit plan contract offered pursuant to Section
1366.35.

(2) An individual offered conversion coverage pursuant to
Section 1373.6.

(3) Individual coverage under a specialized health care service
plan contract.

(4) An individual enrolled in the Medi-Cal program pursuant
to Chapter 7 (commencing with Section 14000) of Division 9 of
Part 3 of the Welfare and Institutions Code.

(5) An individual enrolled in the Access for Infants and Mothers
Program pursuant to Part 6.3 (commencing with Section 12695)
of Division 2 of the Insurance Code.

(6) An individual enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693) of Division
2 of the Insurance Code.

(f) It is the intent of the Legislature that individuals shall have
more choice in their health coverage when health care service plans
guarantee the right of an individual to transfer to another product
based on the plan’s own ranking system. The Legislature does not
intend for the department to review or verify the plan’s ranking
for actuarial or other purposes.

begin insert

(g) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(h) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 6.  

Section 1389.8 of the Health and Safety Code is
amended to read:

1389.8.  

(a) Notwithstanding any other provision of law, an
agent, broker, solicitor, solicitor firm, or representative who assists
an applicant in submitting an application to a health care service
plan has the duty to assist the applicant in providing answers to
health questions accurately and completely.

(b) An agent, broker, solicitor, solicitor firm, or representative
who assists an applicant in submitting an application to a health
care service plan shall attest on the written application to both of
the following:

(1) That to the best of his or her knowledge, the information on
the application is complete and accurate.

(2) That he or she explained to the applicant, in
easy-to-understand language, the risk to the applicant of providing
inaccurate information and that the applicant understood the
explanation.

(c) If, in an attestation required by subdivision (b), a declarant
willfully states as true any material fact he or she knows to be
false, that person shall, in addition to any applicable penalties or
remedies available under current law, be subject to a civil penalty
of up to ten thousand dollars ($10,000). Any public prosecutor
may bring a civil action to impose that civil penalty. These
penalties shall be paid to the Managed Care Fund.

(d) A health care service plan application shall include a
statement advising declarants of the civil penalty authorized under
this section.

begin insert

(e) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(f) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 7.  

Chapter 9 (commencing with Section 127670) is added
to Part 2 of Division 107 of the Health and Safety Code, to read:

 

Chapter  9. Health Court Demonstration Program

 

127670.  

The Secretary of California Health and Human
Services shall submit an application on behalf of the state to the
United States Department of Health and Human Services to receive
a grant for the State Demonstration Programs to Evaluate
Alternatives to Current Medical Tort Litigation, as authorized by
Section 10607 of the federal Patient Protection and Affordable
Care Act (PPACA).

127672.  

(a) The secretary shall write the application described
in Section 127670 to design a program to create health courts based
upon a no-fault process to improve the resolution of liability for
medical injury.

(b) In accordance with PPACA, the application shall
demonstrate how the proposed alternative does all of the following:

(1) Makes the medical liability system more reliable by
increasing the availability of prompt and fair resolution of disputes.

(2) Encourages the efficient resolution of disputes.

(3) Encourages the disclosure of health care errors.

(4) Enhances patient safety by detecting, analyzing, and helping
to reduce medical errors and adverse events.

(5) Improves access to liability insurance.

(6) Fully informs patients about the differences in the alternative
and current tort litigation.

(7) Provides patients the ability to opt out of or voluntarily
withdraw from participating in the alternative at any time and to
pursue other options, including litigation, outside the alternative.

(8) Does not conflict with state law at the time of the application
in a way that prohibits the adoption of the alternative to current
tort litigation.

(9) Does not limit or curtail a patient’s existing legal rights,
ability to file a claim in or access the legal system, or otherwise
abrogate a patient’s ability to file a medical malpractice claim.

(10) Does not conflict with the Medical Injury Compensation
Reform Act (MICRA), including, but not limited to, Section 6146
of the Business and Professions Code, Sections 3333.1 and 3333.2
of the Civil Code, and Section 667.7 of the Code of Civil
Procedure.

(11) Does not require any party to participate in the program.

127674.  

(a) Under the health court demonstration program, a
patient shall be required to prove only the following:

(1) He or she suffered an injury.

(2) The injury was caused by medical care.

(3) The injury meets specified severity criteria.

(b) A patient shall not be required to show a third party acted
in a negligent fashion.

SEC. 8.  

Section 10113.95 of the Insurance Code is amended
to read:

10113.95.  

(a) A health insurer that issues, renews, or amends
individual health insurance policies shall be subject to this section.

(b) An insurer subject to this section shall have written policies,
procedures, or underwriting guidelines establishing the criteria
and process whereby the insurer makes its decision to provide or
to deny coverage to individuals applying for coverage and sets the
rate for that coverage. These guidelines, policies, or procedures
shall ensure that the plan rating and underwriting criteria comply
with Sections 10140 and 10291.5 and all other applicable
provisions.

(c) On or before June 1, 2006, and annually thereafter, every
insurer shall file with the commissioner a general description of
the criteria, policies, procedures, or guidelines that the insurer uses
for rating and underwriting decisions related to individual health
insurance policies, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage or
severely limit the health insurance products for which individuals
applying for coverage would be eligible. An insurer may comply
with this section by submitting to the department underwriting
materials or resource guides provided to agents and brokers,
provided that those materials include the information required to
be submitted by this section.

(d) Commencing January 1, 2011, the commissioner shall post
on the department’s Internet Web site, in a manner accessible and
understandable to consumers, general, noncompany specific
information about rating and underwriting criteria and practices
in the individual market and information about the California Major
Risk Medical Insurance Program (Part 6.5 (commencing with
Section 12700)) and the federal temporary high risk pool
established pursuant to Part 6.6 (commencing with Section
12739.5). The commissioner shall develop the information for the
Internet Web site in consultation with the Department of Managed
Health Care to enhance the consistency of information provided
to consumers. Information about individual health insurance shall
also include the following notification:

“Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could
be denied coverage entirely.”

(e) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.

(f) This section shall not apply to a closed block of business, as
defined in Section 10176.10.

begin insert

(g) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(h) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 9.  

Section 10119.1 of the Insurance Code is amended to
read:

10119.1.  

(a) This section shall apply to a health insurer that
covers hospital, medical, or surgical expenses under an individual
health benefit plan, as defined in subdivision (a) of Section
10198.6, that is issued, amended, renewed, or delivered on or after
January 1, 2007.

(b) At least once each year, a health insurer shall permit an
individual who has been covered for at least 18 months under an
individual health benefit plan to transfer, without medical
underwriting, to any other individual health benefit plan offered
by that same health insurer that provides equal or lesser benefits
as determined by the insurer.

“Without medical underwriting” means that the health insurer
shall not decline to offer coverage to, or deny enrollment of, the
individual or impose any preexisting condition exclusion on the
individual who transfers to another individual health benefit plan
pursuant to this section.

(c) The insurer shall establish, for the purposes of subdivision
(b), a ranking of the individual health benefit plans it offers to
individual purchasers and post the ranking on its Internet Web site
or make the ranking available upon request. The insurer shall
update the ranking whenever a new benefit design for individual
purchasers is approved.

(d) The insurer shall notify in writing all insureds of the right
to transfer to another individual health benefit plan pursuant to
this section, at a minimum, when the insurer changes the insured’s
premium rate. Posting this information on the insurer’s Internet
Web site shall not constitute notice for purposes of this subdivision.
The notice shall adequately inform insureds of the transfer rights
provided under this section including information on the process
to obtain details about the individual health benefit plans available
to that insured and advising that the insured may be unable to
return to his or her current individual health benefit plan if the
insured transfers to another individual health benefit plan.

(e) The requirements of this section shall not apply to the
following:

(1) A federally eligible defined individual, as defined in
subdivision (e) of Section 10900, who purchases individual
coverage pursuant to Section 10785.

(2) An individual offered conversion coverage pursuant to
Sections 12672 and 12682.1.

(3) An individual enrolled in the Medi-Cal program pursuant
to Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code.

(4) An individual enrolled in the Access for Infants and Mothers
Program, pursuant to Part 6.3 (commencing with Section 12695).

(5) An individual enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693).

(f) It is the intent of the Legislature that individuals shall have
more choice in their health care coverage when health insurers
guarantee the right of an individual to transfer to another product
based on the insurer’s own ranking system. The Legislature does
not intend for the department to review or verify the insurer’s
ranking for actuarial or other purposes.

begin insert

(g) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(h) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 10.  

Section 10119.3 of the Insurance Code is amended
to read:

10119.3.  

(a) Notwithstanding any other provision of law, an
agent or broker who assists an applicant in submitting an
application to a health insurer has the duty to assist the applicant
in providing answers to health questions accurately and completely.

(b) An agent or broker who assists an applicant in submitting
an application to a health insurer shall attest on the written
application to both of the following:

(1) That to the best of his or her knowledge, the information on
the application is complete and accurate.

(2) That he or she explained to the applicant, in
easy-to-understand language, the risk to the applicant of providing
inaccurate information and that the applicant understood the
explanation.

(c) If, in an attestation required by subdivision (b), a declarant
willfully states as true any material fact he or she knows to be
false, that person shall, in addition to any applicable penalties or
remedies available under current law, be subject to a civil penalty
of up to ten thousand dollars ($10,000). Any public prosecutor
may bring a civil action to impose that civil penalty. These
penalties shall be paid to the Insurance Fund.

(d) A health insurance application shall include a statement
advising declarants of the civil penalty authorized under this
section.

begin insert

(e) (1) This section shall become inoperative on January 1,
2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative as of the date of the repeal or amendment.

end insert begin insert

(f) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert

SEC. 11.  

Section 10128.60 is added to the Insurance Code, immediately following Section 10128.59, to read:

10128.60.  

(a) This article shall become inoperative on January
1, 2014.

(b) If Section 5000A of the Internal Revenue Code, as added
by Section 1501 of PPACA, is repealed or amended to no longer
apply to the individual market, as defined in Section 2791 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-4), this
article shall become operative as of the date of the repeal or
amendment.

(c) For the purposes of this section, “PPACA” means the federal
Patient Protection and Affordable Care Act (Public Law 111-148),
as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

SEC. 12.  

Section 10270.98 of the Insurance Code is amended
to read:

10270.98.  

Group begin insert and individual end insert disability policies may provide,
among other things, that the benefits payable thereunder are subject
to reduction if the individual insured has any other coverage begin delete (other
than individual policies or contracts) end delete providing hospital, surgical begin insert , end insert
or medical benefits, whether on an indemnity basis or a provision
of service basis, resulting in begin delete such end delete begin insert the end insert insured being eligible for
more than 100 percent of the covered expenses.

begin delete

Except as permitted by this section and by Section 10323,
10369.5, 10369.6, or 11515.5, and except in the case of group
practice prepayment plan contracts which do not provide for
coordination of benefits, to the extent they provide for a reduction
of benefits on account of other coverage with respect to emergency
services that are not obtained from providers that contract with the
plan, no group or individual disability insurance policy or service
contract issued by nonprofit hospital service plans operating under
Chapter 11A (commencing with Section 11491) of Part 2 of
Division 2 shall limit payment of benefits by reason of the
existence of other insurance or service coverage.

end delete

The policy provisions authorized by this section shall contain a
provision that payments of funds may be made directly between
insurers and other providers of benefits. begin delete Such end delete begin insert Those end insert policy
provisions shall also contain a provision that if benefits are
provided in the form of services rather than cash payments the
reasonable cash value of each service rendered shall be deemed
to be both an allowable expense and a benefit paid. The reasonable
cash value of any contractual benefit provided to the insured in
the form of service rather than cash payment by or through any
hospital service organization or medical service organization or
group-practice prepayment plan shall be deemed an expense
incurred by the insured for begin delete such end delete begin insert that end insert service, whether or not
actually incurred, and the liability of the insurer shall be the same
as if the insured had not been entitled to begin delete any such end delete begin insert that end insert service
begin delete benefit, unless the policy contains a provision authorized by Section
10323, 10369.5 or 10369.6 in the case of an individual disability
policy, or by this section, in the case of a group disability policy end delete
begin insert benefit end insert .

This section shall not be construed to require that benefits
payable under group begin insert and individual end insert disability policies be subject
to reduction by the benefit amounts payable under Chapter 3
(commencing with Section 2800) of Part 2 of Division 1 of the
Unemployment Insurance Code.

The provisions of this section, and all regulations adopted
pursuant thereto pertaining to coordination of benefits with other
group begin insert and individual end insert disability benefits, shall apply to all
employers, labor-management trustee plans, union welfare plans
(including those established in conformity with 29 U.S.C. Sec.
186), employer organization begin delete plans or end delete begin insert plans, end insert employee benefit
organization plans, begin insert or end insert health care service plan contracts, pursuant
to regulations adopted by the Director of the Department of
Managed Health Care begin delete which end delete begin insert that end insert shall be uniform with those issued
under this section for those plans that elect to coordinate benefits,
group practice, individual practice, any other prepayment coverage
for medical or dental care or treatment, and administrators, within
the meaning of Section 1759 not otherwise subject to the provisions
of this section whenever begin delete such end delete begin insert that end insert plan, contract begin insert , end insert or practice
provides or administers hospital, surgical, medical begin insert , end insert or dental
benefits to employees or agents who are also covered under one
or more additional group disability policies begin delete which end delete begin insert that end insert are subject
to this section or health care service plans.

SEC. 13.  

Section 10270.99 of the Insurance Code is repealed.

begin delete

10270.99.  

The term “individual policies or contracts,” as used
in the first paragraph of Section 10270.98, does not include selected
group disability policies or contracts, unless those policies or
contracts are noncancelable or guaranteed renewable and solely
provide hospital confinement indemnity or specified disease
coverage.

end delete

SEC. 14.  

Section 10273.4 of the Insurance Code is amended
to read:

10273.4.  

All disability insurers writing, issuing, or
administering group health benefit plans shall make all of these
health benefit plans renewable with respect to the policyholder,
contractholder, or employer except in case of the following:

(a) (1) Nonpayment of the required premiums by the
policyholder, contractholder, or employer if the policyholder,
contractholder, or employer has been duly notified and billed for
the premium and at least a 30-day grace period has elapsed since
the date of notification or, if longer, the period of time required
for notice and any other requirements pursuant to Section 2703,
2712, or 2742 of the federal Public Health Service Act (42 U.S.C.
Secs. 300gg-2, 300gg-12, and 300gg-42) and any subsequent rules
or regulations has elapsed.

(2) Pursuant to paragraph (1), the disability insurer shall continue
to provide coverage as required by the policyholder’s, certificate
holder’s, or other insured’s policy during the period described in
paragraph (1).

begin insert

(3) Notwithstanding paragraphs (1) and (2), the required grace
period and provisions of coverage during a grace period, if any,
for individuals receiving coverage through the Exchange, and who
are receiving a tax credit pursuant to PPACA, shall be subject to
and shall be governed by the requirements of PPACA, and any
related rules and regulations.

end insert

(b) The insurer demonstrates fraud or an intentional
misrepresentation of material fact under the terms of the policy by
the policyholder, contractholder, or employer.

(c) Violation of a material contract provision relating to
employer or other group contribution or group participation rates
by the contractholder or employer.

(d) The insurer ceases to provide or arrange for the provision
of health care services for new group health benefit plans in this
state, provided that the following conditions are satisfied:

(1) Notice of the decision to cease writing, issuing, or
administering new or existing group health benefit plans in this
state is provided to the commissioner and to either the policyholder,
contractholder, or employer at least 180 days prior to
discontinuation of that coverage.

(2) Group health benefit plans shall not be canceled for 180
days after the date of the notice required under paragraph (1) and
for that business of a plan that remains in force, any disability
insurer that ceases to write, issue, or administer new group health
benefit plans shall continue to be governed by this section with
respect to business conducted under this section.

(3) Except as provided under subdivision (h) of Section 10705,
or unless the commissioner had made a determination pursuant to
Section 10712, a disability insurer that ceases to write, issue, or
administer new group health benefit plans in this state after the
effective date of this section shall be prohibited from writing,
issuing, or administering new group health benefit plans to
employers in this state for a period of five years from the date of
notice to the commissioner.

(e) The disability insurer withdraws a group health benefit plan
from the market; provided, that the plan notifies all affected
contractholders, policyholders, or employers and the commissioner
at least 90 days prior to the discontinuation of the health benefit
plans, and that the insurer makes available to the contractholder,
policyholder, or employer all health benefit plans that it makes
available to new employer business without regard to the claims
experience of health-related factors of insureds or individuals who
may become eligible for the coverage.

(f) If the coverage is offered through a network plan, there is
no longer any covered individual in connection with the plan who
lives, resides, or works in the service area of the disability insurer.

(g) If coverage is made available in the individual market
through a bona fide association, the membership of the individual
in the association on the basis of which the coverage is provided,
ceases, but only if that coverage is terminated under this
subdivision uniformly without regard to any health status-related
factor of covered individuals.

(h) For the purposes of this section, “health benefit plan” shall
have the same meaning as in subdivision (a) of Section 10198.6
and Section 10198.61.

(i) For the purposes of this section, “eligible employee” shall
have the same meaning as in Section 10700, except that it applies
to all health benefit plans issued to employer groups of two or
more employees.

begin insert

(j) For the purposes of this section, the following definitions
shall apply:

end insert begin insert

(1) “PPACA” means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), and any rules, regulations, or guidance
issued pursuant to that law.

end insert begin insert

(2) “Exchange” means the California Health Benefit Exchange
created by Section 100500 of the Government Code.

end insert

SEC. 15.  

Section 10273.6 of the Insurance Code is amended
to read:

10273.6.  

All individual health benefit plans, except for
short-term limited duration insurance, shall be renewable with
respect to all eligible individuals or dependents at the option of
the individual except as follows:

(a) (1) For nonpayment of the required premiums by the
individual if the individual has been duly notified and billed for
the premium and at least a 30-day grace period has elapsed since
the date of notification or, if longer, the period of time required
for notice and any other requirements pursuant to Section 2703,
2712, or 2742 of the federal Public Health Service Act (42 U.S.C.
Secs. 300gg-2, 300gg-12, and 300gg-42) and any subsequent rules
or regulations has elapsed.

(2) Pursuant to paragraph (1), the disability insurer shall continue
to provide coverage as required by the policyholder’s, certificate
holder’s, or other insured’s policy during the period described in
paragraph (1).

begin insert

(3) Notwithstanding paragraphs (1) and (2), the required grace
period and provisions of coverage during a grace period, if any,
for individuals receiving coverage through the Exchange, and who
are receiving a tax credit pursuant to PPACA, shall be subject to
and shall be governed by the requirements of PPACA, and any
related rules and regulations.

end insert

(b) The insurer demonstrates fraud or intentional
misrepresentation of material fact under the terms of the policy by
the individual.

(c) Movement of the individual contractholder outside the
service area but only if coverage is terminated uniformly without
regard to any health status-related factor of covered individuals.

(d) If the disability insurer ceases to provide or arrange for the
provision of health care services for new individual health benefit
plans in this state; provided, however, that the following conditions
are satisfied:

(1) Notice of the decision to cease new or existing individual
health benefit plans in this state is provided to the commissioner
and to the individual policy or contractholder at least 180 days
prior to discontinuation of that coverage.

(2) Individual health benefit plans shall not be canceled for 180
days after the date of the notice required under paragraph (1) and
for that business of a disability insurer that remains in force, any
disability insurer that ceases to offer for sale new individual health
benefit plans shall continue to be governed by this section with
respect to business conducted under this section.

(3) A disability insurer that ceases to write new individual health
benefit plans in this state after the effective date of this section
shall be prohibited from offering for sale individual health benefit
plans in this state for a period of five years from the date of notice
to the commissioner.

(e) If the disability insurer withdraws an individual health benefit
plan from the market; provided, that the disability insurer notifies
all affected individuals and the commissioner at least 90 days prior
to the discontinuation of these plans, and that the disability insurer
makes available to the individual all health benefit plans that it
makes available to new individual businesses without regard to a
health status-related factor of enrolled individuals or individuals
who may become eligible for the coverage.

(f) If coverage is made available in the individual market through
a bona fide association, the membership of the individual in the
association on the basis of which the coverage is provided, ceases,
but only if that coverage is terminated under this subdivision
uniformly without regard to any health status-related factor of
covered individuals.

begin insert

(g) For the purposes of this section, the following definitions
shall apply:

end insert begin insert

(1) “PPACA” means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), and any rules, regulations, or guidance
issued pursuant to that law.

end insert begin insert

(2) “Exchange” means the California Health Benefit Exchange
created by Section 100500 of the Government Code.

end insert

SEC. 16.  

Section 10291.5 of the Insurance Code is amended
to read:

10291.5.  

(a) The purpose of this section is to achieve both of
the following:

(1) Prevent, in respect to disability insurance, fraud, unfair trade
practices, and insurance economically unsound to the insured.

(2) Assure that the language of all insurance policies can be
readily understood and interpreted.

(b) The commissioner shall not approve any disability policy
for insurance or delivery in this state in any of the following
circumstances:

(1) If the commissioner finds that it contains any provision, or
has any label, description of its contents, title, heading, backing,
or other indication of its provisions begin delete which end delete begin insert that end insert is unintelligible,
uncertain, ambiguous, or abstruse, or likely to mislead a person to
whom the policy is offered, delivered or issued.

(2) If it contains any provision for payment at a rate, or in an
amount (other than the product of rate times the periods for which
payments are promised) for loss caused by particular event or
events (as distinguished from character of physical injury or illness
of the insured) more than triple the lowest rate, or amount,
promised in the policy for the same loss caused by any other event
or events (loss caused by sickness, loss caused by accident, and
different degrees of disability each being considered, for the
purpose of this paragraph, a different loss); or if it contains any
provision for payment for any confining loss of time at a rate more
than six times the least rate payable for any partial loss of time or
more than twice the least rate payable for any nonconfining total
loss of time; or if it contains any provision for payment for any
nonconfining total loss of time at a rate more than three times the
least rate payable for any partial loss of time.

(3) If it contains any provision for payment for disability caused
by particular event or events (as distinguished from character of
physical injury or illness of the insured) payable for a term more
than twice the least term of payment provided by the policy for
the same degree of disability caused by any other event or events;
or if it contains any benefit for total nonconfining disability payable
for lifetime or for more than 12 months and any benefit for partial
disability, unless the benefit for partial disability is payable for at
least three months; or if it contains any benefit for total confining
disability payable for lifetime or for more than 12 months, unless
it also contains benefit for total nonconfining disability caused by
the same event or events payable for at least three months, and, if
it also contains any benefit for partial disability, unless the benefit
for partial disability is payable for at least three months. The
provisions of this paragraph shall apply separately to accident
benefits and to sickness benefits.

(4) If it contains begin insert a end insert provision or provisions begin delete which end delete begin insert that end insert would
have the effect, upon any termination of the policy, of reducing or
ending the liability as the insurer would have, but for the
termination, for loss of time resulting from accident occurring
while the policy is in force or for loss of time commencing while
the policy is in force and resulting from sickness contracted while
the policy is in force or for other losses resulting from accident
occurring or sickness contracted while the policy is in force, and
also contains provision or provisions reserving to the insurer the
right to cancel or refuse to renew the policy, unless it also contains
other provision or provisions the effect of which is that termination
of the policy as the result of the exercise by the insurer of begin delete any such end delete
begin insert that end insert right shall not reduce or end the liability in respect to the
hereinafter specified losses as the insurer would have had under
the policy, including its other limitations, conditions, reductions,
and restrictions, had the policy not been so terminated.

The specified losses referred to in the preceding paragraph are:

(i) Loss of time begin delete which end delete begin insert that end insert commences while the policy is in
force and results from sickness contracted while the policy is in
force.

(ii) Loss of time begin delete which end delete begin insert that end insert commences within 20 days
following and results from accident occurring while the policy is
in force.

(iii) Losses begin delete which end delete begin insert that end insert result from accident occurring or sickness
contracted while the policy is in force and arise out of the care or
treatment of illness or injury and begin delete which end delete begin insert that end insert occur within 90 days
from the termination of the policy or during a period of continuous
compensable loss or losses begin delete which end delete begin insert that end insert period commences prior to
the end of begin delete such end delete begin insert that end insert 90 days.

(iv) Losses other than those specified in clause (i), (ii), or (iii)
of this paragraph begin delete which end delete begin insert that end insert result from accident occurring or
sickness contracted while the policy is in force and begin delete which end delete begin insert that end insert
losses occur within 90 days following the accident or the
contraction of the sickness.

(5) If by any caption, label, title, or description of contents the
policy states, implies, or infers without reasonable qualification
that it provides loss of time indemnity for lifetime, or for any period
of more than two years, if the loss of time indemnity is made
payable only when house confined or only under special
contingencies not applicable to other total loss of time indemnity.

(6) If it contains any benefit for total confining disability payable
only upon condition that the confinement be of an abnormally
restricted nature unless the caption of the part containing begin delete any such end delete
begin insert that end insert benefit is accurately descriptive of the nature of the
confinement required and unless, if the policy has a description of
contents, label, or title, at least one of them contain reference to
the nature of the confinement required.

(7) (A) If, irrespective of the premium charged therefor, any
benefit of the policy is, or the benefits of the policy as a whole are,
not sufficient to be of real economic value to the insured.

(B) In determining whether benefits are of real economic value
to the insured, the commissioner shall not differentiate between
insureds of the same or similar economic or occupational classes
and shall give due consideration to all of the following:

(i) The right of insurers to exercise sound underwriting judgment
in the selection and amounts of risks.

(ii) Amount of benefit, length of time of benefit, nature or extent
of benefit, or any combination of those factors.

(iii) The relative value in purchasing power of the benefit or
benefits.

(iv) Differences in insurance issued on an industrial or other
special basis.

(C) To be of real economic value, it shall not be necessary that
any benefit or benefits cover the full amount of any loss begin delete which end delete
begin insert that end insert might be suffered by reason of the occurrence of any hazard
or event insured against.

(8) If it substitutes a specified indemnity upon the occurrence
of accidental death for any benefit of the policy, other than a
specified indemnity for dismemberment, which would accrue prior
to the time of that death or if it contains any provision begin delete which end delete begin insert that end insert
has the effect, other than at the election of the insured exercisable
within not less than 20 days in the case of benefits specifically
limited to the loss by removal of one or more fingers or one or
more toes or within not less than 90 days in all other cases, of
doing any of the following:

(A) Of substituting, upon the occurrence of the loss of both
hands, both feet, one hand and one foot, the sight of both eyes or
the sight of one eye and the loss of one hand or one foot, some
specified indemnity for any or all benefits under the policy unless
the indemnity so specified is equal to or greater than the total of
the benefit or benefits for which begin delete such end delete begin insert the end insert specified indemnity is
substituted and begin delete which, end delete begin insert that, end insert assuming in all cases that the insured
would continue to live, could possibly accrue within four years
from the date of begin delete such end delete begin insert the end insert dismemberment under all other provisions
of the policy applicable to the particular event or events (as
distinguished from character of physical injury or illness) causing
the dismemberment.

(B) Of substituting, upon the occurrence of any other
dismemberment some specified indemnity for any or all benefits
under the policy unless the indemnity so specified is equal to or
greater than one-fourth of the total of the benefit or benefits for
which the specified indemnity is substituted and begin delete which, end delete begin insert that end insert
assuming in all cases that the insured would continue to live, could
possibly accrue within four years from the date of the
dismemberment under all other provisions 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
of any dismemberment for any benefit of the policy begin delete which end delete begin insert that end insert
would accrue prior to the time of dismemberment.

As used in this section, loss of a hand shall be severance at or
above the wrist joint, loss of a foot shall be severance at or above
the ankle joint, loss of an eye shall be the irrecoverable loss of the
entire sight thereof, loss of a finger shall mean at least one entire
phalanx thereof and loss of a toe the entire toe.

(9) If it contains provision, other than as provided in Section
10369.3, reducing any original benefit more than 50 percent on
account of age of the insured.

(10) If the insuring clause or clauses contain no reference to the
exceptions, limitations, and reductions (if any) or no specific
reference to, or brief statement of, each abnormally restrictive
exception, limitation, or reduction.

(11) If it contains benefit or benefits for loss or losses from
specified diseases only unless:

(A) All of the diseases so specified in each provision granting
the benefits fall within some general classification based upon the
following:

(i) The part or system of the human body principally subject to
all begin delete such end delete begin insert those end insert diseases.

(ii) The similarity in nature or cause of begin delete such end delete begin insert those end insert diseases.

(iii) In case of diseases of an unusually serious nature and
protracted course of treatment, the common characteristics of all
begin delete such end delete begin insert those end insert diseases with respect to severity of affliction and cost
of treatment.

(B) The policy is entitled and each provision granting the
benefits is separately captioned in clearly understandable words
so as to accurately describe the classification of diseases covered
and expressly point out, when that is the case, that not all diseases
of the classification are covered.

(12) If it does not contain provision for a grace period of at least
the number of days specified below for the payment of each
premium falling due after the first premium, during which grace
period the policy shall continue in force provided, that the grace
period to be included in the policy shall be not less than seven days
for policies providing for weekly payment of premium, not less
than 10 days for policies providing for monthly payment of
premium and not less than 31 days for all other policies.

(13) If it fails to conform in any respect with any law of this
state.

(c) The commissioner shall not approve any disability policy
covering hospital, medical, or surgical expenses unless the
commissioner finds that the application conforms to both of the
following requirements:

(1) All applications for disability insurance covering hospital,
medical, or surgical expenses, except that which is guaranteed
issue, begin delete which end delete begin insert that end insert include questions relating to medical conditions,
shall contain clear and unambiguous questions designed to ascertain
the health condition or history of the applicant.

(2) The application questions designed to ascertain the health
condition or history of the applicant shall be based on medical
information that is reasonable and necessary for medical
underwriting purposes. The application shall include a prominently
displayed notice that states:

“California law prohibits an HIV test from being required or
used by health insurance companies as a condition of obtaining
health insurance coverage.”

(d) Nothing in this section authorizes the commissioner to
establish or require a single or standard application form for
application questions.

(e) The commissioner may, from time to time as conditions
warrant, after notice and hearing, promulgate begin delete such end delete reasonable rules
and regulations, and amendments and additions thereto, as are
necessary or convenient, to establish, in advance of the submission
of policies, the standard or standards conforming to subdivision
(b), by which he or she shall disapprove or withdraw approval of
any disability policy.

In promulgating begin delete any such end delete begin insert a end insert rule or begin delete regulation end delete begin insert regulation, end insert the
commissioner shall give consideration to the criteria herein
established and to the desirability of approving for use in policies
in this state uniform provisions, nationwide or otherwise, and is
hereby granted the authority to consult with insurance authorities
of any other state and their representatives individually or by way
of convention or committee, to seek agreement upon those
provisions.

begin delete

Any such

end delete

begin insert That end insert rule or regulation shall be promulgated in accordance with
the procedure provided in Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(f) The commissioner may withdraw approval of filing of any
policy or other document or matter required to be approved by the
commissioner, or filed with him or her, by this chapter when the
commissioner would be authorized to disapprove or refuse filing
of the same if originally submitted at the time of the action of
withdrawal.

begin delete

Any such

end delete

begin insert That end insert withdrawal shall be in writing and shall specify reasons.
An insurer adversely affected by begin delete any such end delete begin insert that end insert withdrawal may,
within a period of 30 days following mailing or delivery of the
writing containing the withdrawal, by written request secure a
hearing to determine whether the withdrawal should be annulled,
modified, or confirmed. Unless, at any time, it is mutually agreed
to the contrary, a hearing shall be granted and commenced within
30 days following filing of the request and shall proceed with
reasonable dispatch to determination. Unless the commissioner in
writing in the withdrawal, or subsequent thereto, grants an
extension, begin delete any such end delete begin insert that end insert withdrawal shall, in the absence of begin delete any
such end delete begin insert that end insert request, be effective, prospectively and not retroactively,
on the 91st day following the mailing or delivery of the withdrawal,
and, if request for the hearing is filed, on the 91st day following
mailing or delivery of written 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 of the Government Code.

(h) Except as provided in subdivision (k), any action taken by
the commissioner under this section is subject to review by the
courts of this state and proceedings on review shall be in
accordance with the Code of Civil Procedure.

Notwithstanding any other provision of law to the contrary,
petition for begin delete any such end delete begin insert that end insert review may be filed at any time before
the effective date of the action taken by the commissioner. No
action of the commissioner shall become effective before the
expiration of 20 days after written notice and a copy thereof are
mailed or delivered to the person adversely affected, and any action
so submitted for review shall not become effective for a further
period of 15 days after the filing of the petition in court. The court
may stay the effectiveness thereof for a longer period.

(i) This section shall be liberally construed to effectuate the
purpose and intentions herein stated; but shall not be construed to
grant the commissioner power to fix or regulate rates for disability
insurance or prescribe a standard form of disability policy, except
that the commissioner shall prescribe a standard supplementary
disclosure form for presentation with all disability insurance
policies, pursuant to Section 10603.

(j) This section shall be effective on and after July 1, 1950, as
to 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
state irrespective of when its form may have been submitted or
approved, and prior to those dates the provisions of law in effect
on January 1, 1949, shall apply to those policies.

(k)  begin delete Any such end delete begin insert A end insert policy issued by an insurer to an insured on a
form approved by the commissioner, and in accordance with the
conditions, if any, contained in the approval, at a time when that
approval is outstanding shall, as between the insurer and the
insured, or any person claiming under the policy, be conclusively
presumed to comply with, and conform to, this section.

begin insert

(l) (1) Subdivisions (c) and (d) shall become inoperative on
January 1, 2014.

end insert begin insert

(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply
to the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-4), subdivisions
(c) and (d) shall become operative as of the date of the repeal or
amendment.

end insert begin insert

(3) For the purposes of this subdivision, “PPACA” means the
federal Patient Protection and Affordable Care Act (Public Law
111-148), as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152), and any rules,
regulations, or guidance issued pursuant to that law.

end insert