State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under CIC Section 10128.1, discontinuance of a group disability policy means:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 10128.1(c) defines discontinuance as the termination of a policy or the termination of coverage between an entire employer unit under a group disability policy, group hospital service contract, or self-insured welfare benefit plan. It expressly does not refer to the termination of an agreement between any individual member and the insurer. This distinction matters because the discontinuance rules, including extension of benefits and replacement coverage, are triggered by employer-unit terminations, not by individual events.
Why the other options are wrong
- B) An individual stopping premium payments is a personal lapse, not the employer-unit termination the statute calls discontinuance.
- C) Cancellation of a single member's certificate is excluded from the statutory definition.
- D) A change of occupation is a rating or eligibility event, not a discontinuance under Section 10128.1.
Memory hook
Discontinuance = the whole employer unit is out. One member quitting or lapsing doesn't count.