State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 10270.5, for a group disability insurance policy to be issued to an association or trust covering its members, the association must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 10270.5(4) permits group disability policies to be issued to an association or trust with a minimum of 100 members, in active existence for at least two years, with a constitution and bylaws requiring regular meetings at least annually, and formed and maintained in good faith for purposes other than obtaining insurance. Members must have voting privileges and representation on the governing boards and committees. These safeguards prevent sham associations created only to buy cheaper coverage.
Why the other options are wrong
- B) The association must be formed for purposes other than obtaining insurance; a group formed solely to buy insurance is not a qualified association.
- C) The statutory minimum is 100 members, not 1,000, and no paid professional staff requirement exists.
- D) Labor-union affiliation is only one of several permitted structures; it is not a general requirement, and no Commissioner approval of the association itself is mandated.
Memory hook
A qualified association is a real club, not a cover story: 100 members, two years old, and built for something other than buying insurance.