Under California Insurance Code Section 381, which of the following is NOT among the items a policy must specify?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 381 lists the items every policy must specify: the parties, the property or life insured, the insured's interest in property if not the absolute owner, the risks insured against, the period of insurance, and the premium or the basis and rates for determining the final premium. A financial strength rating assigned by an independent rating agency is NOT a required specification. Ratings are published by entities such as AM Best and Standard and Poor's, but they are not part of the mandatory statutory contents of a California insurance policy.
Why the other options are wrong
- B) The parties between whom the contract is made are a required specification under Section 381(a).
- C) The risks insured against must be specified under Section 381(d); the insuring clause identifies them.
- D) The period during which the insurance continues must be stated under Section 381(e).
Memory hook
Six statutory specs, no rating agency opinion: parties, property or life, interest, risks, period, premium.