State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A California insurer issues a policy that names the insured but fails to identify itself as the insurer. Under CIC Section 381, this policy is defective because it omits which required element?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Section 381 requires the policy to specify the parties, meaning both the insurer and the insured. If the issuing insurer is not identified, the contract lacks an essential term because it is impossible to know which company is obligated to pay benefits. Each of the Section 381 elements is mandatory, and the parties are first among them, so the omission makes the policy defective from the outset.
Why the other options are wrong
- A) The insured's interest concerns what stake the insured has in the coverage; here the omitted element is the identity of the insurer as a party.
- B) The premium computation basis concerns how the price is derived, which is a different Section 381 element.
- C) The risks insured against define what losses are covered, another distinct required element.
Memory hook
A contract needs both names, the insurer and the insured.