State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
A prospective insured reviews a life policy and notices it does not contain the insurer's financial rating from a rating agency. Under California Insurance Code Section 381, this omission means the policy is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 381 lists the six required provisions of a California policy — parties, subject matter, interest, risks, period, and premium or its basis — and a financial rating is not among them. Rating-agency grades are marketing and comparison information, not statutory policy content. Their absence does not affect the policy's validity, so an insurer need not include a rating in the policy document.
Why the other options are wrong
- B) No California statute requires the insurer's financial rating to appear in the policy.
- C) Financial ratings are private agency opinions; neither federal law nor the Insurance Code makes them a required provision.
- D) A policy is not suspended for omitting an optional element; it is simply complete without it.
Memory hook
Ratings are for brochures, not for the policy's statutory six-pack.