State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An agent tells a client, 'Your life insurance coverage is in effect based on our conversation alone; the written policy will arrive later.' Under California Insurance Code Section 380, is the oral conversation itself a valid insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 380 defines the policy as the written instrument in which the contract of insurance is set forth. An oral conversation is not a policy, and for life and disability insurance, binders that would extend coverage orally are generally not permitted. The written policy document is the formal evidence of the contract, which is why delivery and the policy provisions matter.
Why the other options are wrong
- B) An agent's oral assurance cannot substitute for the written policy, particularly for life insurance, where no oral binder is allowed.
- C) Section 380 requires a written instrument; a conversation is not a written instrument.
- D) Policies are issued by insurers, not created by the Commissioner; the issue is that this coverage was never reduced to writing.
Memory hook
Talk is not a policy. Section 380: written instrument = policy. If it isn't written, it isn't the contract.