State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
For an association or trust to qualify for a group disability policy under Section 10270.5(a)(4), the association must, at the outset, have:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under California Insurance Code Section 10270.5(a)(4), an association or trust seeking a group disability policy must have a minimum membership of 100 persons, be organized and maintained in good faith for purposes other than obtaining insurance, have been in active existence for at least two years, and have a constitution and bylaws requiring meetings at least annually. Members must have voting rights and representation on the governing board. These requirements guard against groups assembled only to obtain coverage.
Why the other options are wrong
- A) The statutory thresholds are 100 members and two years, not 500 members and five years.
- C) The 25 percent figure appears elsewhere in Section 10270.5 as a participation requirement for certain association policies, not as a membership minimum of 25 persons.
- D) Licensed insurance agents are a separate eligible class under Section 10270.5(a)(2); there is no such composition requirement for associations or trusts.
Memory hook
100 members, 2 years, annual meetings, real purpose. That is the association trust's entrance ticket under 10270.5.