California Property & Casualty Broker-AgentGeneral InsuranceHard
An insurance company has decided to withdraw from a specific line of business in California. They must submit a plan of withdrawal to the Insurance Commissioner. What is the minimum number of days' notice that the insurer must provide to the Commissioner before the effective date of the withdrawal?
- A30 days
- B90 days
- C60 days
- D180 days
Show answer & explanationAnswer & explanation
Correct answer: D. 180 days
Under California Insurance Code, an insurer must provide at least 180 days' advance notice to the Insurance Commissioner before the effective date of a complete or partial withdrawal from a line of insurance. This allows the Commissioner time to evaluate the impact and ensure consumer protection.
Why the other options are wrong
- A. 30 days is too short for a withdrawal plan; this is often for producer address changes.
- B. 90 days is also too short; the code requires a longer period for market stability.
- C. 60 days is insufficient for such a significant regulatory action.
Insurer Withdrawal Notice (CA)
In California, insurance companies must provide significant advance notice to the Insurance Commissioner when planning to withdraw from a line of business.
- Applies to complete or partial withdrawal.
- Minimum 180 days' prior notice required.
- A plan of withdrawal must be submitted.
Memory trick: In CA, insurers must play fair, especially when leaving with care.