State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 381, which of the following must appear in an insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 381 requires every California insurance policy to specify six items: the parties between whom the contract is made, the subject matter insured, the insurable interest of the insured, the risks insured against, the period during which the insurance is to continue, and the premium (or the basis for calculating it). Everything else is optional or regulated separately.
Why the other options are wrong
- B) Financial ratings are informative but are not one of the six required policy provisions under Section 381.
- C) Adhesion is a legal characteristic of insurance contracts recognized by courts, but the policy does not have to print that characterization.
- D) The producer's commission is an internal compensation matter and is not a required policy provision.
Memory hook
Six items, one sentence: Who (parties), what (subject), why (interest), which (risks), how long (period), how much (premium).