Under California Insurance Code Section 10270.5, before a group disability policy may be issued to an association or to a trust established for association members, the association must have been in active existence for at least:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Section 10270.5(a)(4) requires that an association, or a trust established for the benefit of members of one or more associations, have a minimum membership of 100 persons, be organized and maintained in good faith for purposes other than obtaining insurance, and have been in active existence for at least two years before a group disability policy is issued to it. The association must also have a constitution and bylaws requiring regular meetings at least annually, with voting privileges and representation for members. This two-year existence requirement is part of the eligible-group rules tested under AH-III.B.1a, and it prevents shell organizations from forming solely to obtain insurance.
Why the other options are wrong
- A) One year is too short; the statutory minimum active existence period for an association or trust is two years.
- C) Three years overstates the California requirement, which was enacted as a two-year active existence standard.
- D) Five years is not the statutory standard; two years of active existence satisfies the code.
Memory hook
Associations need a two-year track record before group insurance.