California Property & Casualty Broker-AgentCalifornia LawHard
An insurance company operating in California decides to withdraw from transacting a specific line of personal insurance business in the state. According to California Insurance Code, what is the minimum number of days' advance written notice the insurer must provide to the Commissioner of Insurance before withdrawing from a line of business?
- A30 days
- B90 days
- C120 days
- D60 days
Show answer & explanationAnswer & explanation
Correct answer: C. 120 days
California Insurance Code (specifically CIC 1070 et seq.) requires an insurer to provide at least 120 days' advance written notice to the Commissioner of Insurance before withdrawing from a line of business. This extended notice period allows the CDI to manage the impact on policyholders and the market.
Why the other options are wrong
- A. This timeframe is too short for a withdrawal from a line of business.
- B. While a significant period, it is still less than the legally required 120 days.
- D. This timeframe is too short for a withdrawal from a line of business.
Insurer Line of Business Withdrawal Notice
In California, an insurer must provide the Commissioner of Insurance with at least 120 days' advance written notice before withdrawing from a specific line of insurance business.
- Applies to admitted insurers ceasing to write a particular type of policy.
- Allows the CDI to monitor market impact and assist policyholders.
- Distinct from individual policy non-renewals.
Memory trick: One-twenty days, the line of business fades, no surprise raids.