State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
For a group life insurance plan to be valid under California's eligible-group rules, the group must be formed primarily for a purpose other than:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
To qualify as an eligible group under California law, Sections 10202.5, 10270.505, 10270.55, and 10270.57, a group must have been formed for a purpose other than obtaining insurance, typically an employer-employee relationship or an association with a genuine organizational purpose. If a group is formed merely to purchase insurance, it invites adverse selection and does not qualify for group rates. The group must be a legitimate entity whose members belong for reasons unrelated to insurance.
Why the other options are wrong
- B) Providing employee benefits is a legitimate incidental purpose of an employer group.
- C) Conducting legitimate business is exactly the qualifying purpose required.
- D) Sharing a common workplace reflects the employer-employee relationship that qualifies a group.
Memory hook
A valid group exists for business first and insurance second; insurance-only clubs do not qualify.