State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
When a group disability policy is discontinued and a different carrier begins providing the benefits to the group, the new coverage is referred to under California law as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 10128.1(i) defines replacement coverage as the benefits provided by a succeeding carrier after a group disability policy is discontinued. The discontinuance and replacement rules recognize that an employer may move the group to a new insurer, and they govern the continuity protections for members in that transition. Replacement coverage is provided by the new carrier and is distinct from extension of benefits, which continues the old carrier's benefits for members totally disabled on the discontinuance date.
Why the other options are wrong
- B) Extension of benefits continues the prior carrier's coverage for a totally disabled member; replacement coverage comes from the succeeding carrier.
- C) Conversion allows a member to obtain an individual policy; it is not the term for a succeeding carrier's group coverage.
- D) A stop-loss contract protects a self-funded employer against catastrophic claims; it is not the term for succeeding-carrier group coverage.
Memory hook
New carrier, same group: that's replacement coverage. Extension of benefits is the old carrier still paying the disabled.