Notes From The CDI's Workshop On The Meaning Of "Group" Under Section 1861.12


The California Department of Insurance (“CDI”) held a workshop last Friday to discuss issues relating to its consideration of promulgating regulations re: “group plans” under Section 1861.12 of the California Insurance Code. The Notice of Workshop explained the purpose of this workshop:

California Insurance Code (CIC) 1861.12 is part of Proposition 103 and authorizes insurers to issue property and casualty 'insurance coverage on a group plan.' Insurers may issue such group insurance 'without restriction as to the purpose of the group, occupation or type of group.' Under 1861.12 the rates for group insurance are not 'considered to be unfairly discriminatory, if they are averaged broadly among persons insured under the group plan.' However, the statute does not define the term 'group' and does not specify conditions as to when insurance may be issued on a group plan. Further, the statute provides no guidance with regard to the validity of groups that exist solely for the purposes of purchasing insurance, or groups that are simply acknowledge by an insurer based on shared characteristics or status, such as everyone who has purchased a particular product from a particular vendor."

On behalf of the CDI were Dan Goodell, Joel Laucher, Pam O’Connell, Stan Bair and Betty Mohr. Doug Heller and Todd Foreman appeared on behalf of the Consumer Watchdog ("CW"). From the industry trade organizations (at least as far as I was able to identify) were Jeff Fuller (ACIC) and Kim Dellinger (PIFC). Finally, 20-25 company reps and attorneys from law firms, including myself, were present.

The CDI noted that the forum was intended to be open and invited a frank discussion of all points of view. The following is a summary of general comments made at the workshop by the CDI and CW.

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