IN THE SUPREME COURT OF 

CALIFORNIA

BLAKELY MCHUGH et al.,

Plaintiffs and Appellants,

v.

PROTECTIVE LIFE INSURANCE COMPANY,

Defendant and Respondent.

S259215

Fourth Appellate District, Division One

D072863

San Diego County Superior Court

37-2014-00019212-CU-IC-CTL

August 30, 2021

Justice Cuéllar authored the opinion of the Court, in which 

Chief Justice Cantil-Sakauye and Justices Liu, Kruger, and 

Groban concurred.

Justice Jenkins filed a concurring opinion, in which Justice 

Corrigan concurred.
1

MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

S259215

Opinion of the Court by Cuéllar, J.

Millions of California consumers manage financial risks 

for their families by purchasing life insurance. Through these 

policies, Californians ensure that their families and other 

designated beneficiaries are protected by a financial safety

net — and are able to plan for contingencies — in the event of 

the policy owners’ untimely death. But there’s a cost: In 

exchange for continuing coverage, consumers pay regular 

premiums to their insurers. If consumers fail to do so, insurers 

have the right to end the policies. 

In 2012, the Legislature created certain protections to 

shield consumers from losing life insurance coverage because of 

a missed premium payment. Codified in sections 10113.71 and 

10113.72 of the Insurance Code,

1

these protections went into 

effect on January 1, 2013. Soon thereafter, the defendant

terminated one of the life insurance policies at issue in this case 

because the policy owner had failed to make a payment.

Plaintiffs claim that the defendant had no right to terminate 

these policies without complying with the newly codified

statutory protections against termination. The Court of Appeal 

reasoned that sections 10113.71 and 10113.72 did not apply

because they appeared to affect only policies issued or delivered 

after the sections’ January 1, 2013 effective date, and the policy 

1 All unspecified section references are to the Insurance 

Code.
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

2

at issue here predated the sections. In reaching this 

construction of the statutes, the court cited — among other 

considerations — its deference to Department of Insurance 

(DOI) staff correspondence and electronic instructions for policy 

forms.

We conclude that sections 10113.71 and 10113.72 apply to 

all life insurance policies in force when these two sections went 

into effect, regardless of when the policies were originally 

issued. This interpretation fits the provisions’ language,

legislative history, and uniform notice scheme, and it protects

policy owners — including elderly, hospitalized, or 

incapacitated ones who may be particularly vulnerable to 

missing a premium payment — from losing coverage, consistent 

with the provisions’ purpose. This interpretation does not 

depend on extending deference to DOI staff correspondence or 

electronic instructions, neither of which represent the agency’s 

official interpretation of sections 10113.71 and 10113.72 nor 

otherwise reflect the agency’s carefully considered, longstanding, and consistent interpretive viewpoint on the sections. 

Accordingly, we reverse the judgment of the Court of Appeal and 

remand for proceedings consistent with this opinion.

I.

In March 2005, Chase Life Insurance Company, the 

predecessor in interest to defendant Protective Life Insurance

Company (Protective Life), issued a $1 million term life

insurance policy to William McHugh. The policy named 

McHugh’s daughter, Blakely McHugh, as the designated 

beneficiary and Trysta Henselmeier, Blakely’s mother and 

McHugh’s successor in interest, as a contingent beneficiary. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

3

The policy was for a 60-year term, and it set out a schedule 

of annual premiums to keep the policy in force. For the first 10

years of the policy, the insurance policy set the annual premium 

at $310; after that, the premium steadily increased each year. 

The policy included a provision for a 31-day grace period before 

the policy could be terminated for the failure to pay the 

premium. 

McHugh paid all the yearly premiums through January 

2012. That meant his policy was, by its terms, “in force” until 

February 9, 2013, 31 days after the January 9, 2013 due date for 

that year’s payment. On December 20, 2012, Protective Life

sent McHugh a letter reminding him of the January 9 deadline 

and that nonpayment by February 9 would cause his policy to 

lapse or terminate. McHugh failed to pay the premium by the 

due date. Protective Life sent him a second letter on January 

29, which stated that it had not received his premium payment 

for the year and warned that his policy would lapse if he did not 

make the payment by February 9, the end of the grace period. 

McHugh again failed to make the payment, and the policy 

lapsed. On February 18, Protective Life sent McHugh a letter 

informing him the grace period had expired, but that he could 

reinstate the policy if it received his payment by March 12, 

during his lifetime. McHugh did not pay, and Protective Life

formally terminated his policy. 

At some point close to when Protective Life sent its last 

letter, McHugh suffered a serious fall that left him disabled, 

caused him continuing physical pain, and required surgery. 

McHugh passed away in June 2013. Henselmeier contacted 

Protective Life to inquire about the status of McHugh’s policy 

and whether a claim could be made. Protective Life advised that 

the policy had been terminated. Thereafter, Henselmeier and 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

4

Blakely (plaintiffs) sued Protective Life for breach of contract 

and breach of the implied covenant of good faith and fair dealing. 

Plaintiffs argued that sections 10113.71 and 10113.72, which 

came into effect on January 1, 2013, applied to policies issued 

before this effective date, and that Protective Life failed to 

comply with the statutes’ requirements before it terminated 

McHugh’s policy. 

In various filings, including its motion for a directed 

verdict, Protective Life argued the statutes did not apply to 

policies issued before January 1, 2013. In making this 

argument, Protective Life relied at times on purported agency 

interpretations of the statutes. The trial court rejected

Protective Life’s argument, concluding that the statutes applied 

to McHugh’s policy. Ultimately, the jury found for Protective 

Life. It concluded that: (1) Protective Life and McHugh entered 

into an insurance contract; (2) McHugh failed to do all, or 

substantially all, of what the contract required him to do, but he 

was excused from doing so; (3) all conditions required for 

Protective Life’s performance occurred and were not excused; (4) 

Protective Life did something the contract prohibited; but (5) 

plaintiffs were not harmed by Protective Life’s failure.

Plaintiffs appealed from the special verdict in favor of 

Protective Life and the denial of plaintiffs’ judgment 

notwithstanding the verdict motion. What they argued, among 

other things, is that the trial court erred by declining to decide 

as a matter of law whether Protective Life had complied with 

Insurance Code sections 10113.71 and 10113.72, and instead 

permitting the jury to decide that issue. (McHugh v. Protective 

Life Ins. (2019) 40 Cal.App.5th 1166, 1171, fn. 4 (McHugh).) 

Under Code of Civil Procedure section 906, Protective Life

requested the Court of Appeal affirm the judgment on the 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

5

additional ground that Insurance Code sections 10113.71 and 

10113.72 do not apply retroactively to McHugh’s policy, and the 

trial court erred as a matter of law when it ruled otherwise in 

denying the directed verdict motion. (McHugh, at pp. 1170–

1171.) The Court of Appeal affirmed the judgment on this 

additional ground. (Id. at p. 1171.) In reaching this holding, the 

court first relied on two sets of DOI documents that it held 

indicated that sections 10113.71 and 10113.72 applied only to 

policies issued after January 1, 2013: private correspondence 

between DOI counsel and insurers, and DOI’s System for 

Electronic and Form Filing (SERFF) “ ‘Instructions for 

Complying with [Assembly Bill No.] 1747.’ ” (McHugh, at p. 

1172.) It then determined that the statutes’ language supported 

DOI’s purported interpretation. (Id. at pp. 1175–1177.)

We granted review to resolve whether (1) sections 

10113.71 and 10113.72 apply to all life insurance policies in 

force as of January 1, 2013 — regardless of when those policies 

had originally been issued — or only to policies that went into 

effect after this date; and (2) the Court of Appeal properly 

deferred to DOI guidance in its analysis. 

II.

The grace period and notice requirements governing life 

insurance policies issued before January 1, 2013 depend on 

whether sections 10113.71 and 10113.72 apply to such policies. 

To understand the effects of these provisions, we begin by

surveying the mechanics of life insurance and the broad legal 

framework governing such policies. 

A.

A life insurance policy “is a contract of indemnity under 

which, in exchange for the payment of premiums, the insurer 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

6

promises to pay a sum of money to the designated beneficiary 

upon the death of the named insured.” (Fairbanks v. Superior 

Court (2009) 46 Cal.4th 56, 61.) There are two main categories 

of life insurance. (See Fairbanks v. Farmers New World Life Ins. 

Co. (2011) 197 Cal.App.4th 544, 547–548 & fn. 3 (Fairbanks); 

Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 

Cal.App.4th 830, 834.) Cash value life insurance provides 

“ ‘insurance’ ” in the form of a death benefit for designated 

beneficiaries upon the policy owner’s death, as well as “ ‘cash 

value’ ” savings that accumulate and are available during the 

policy owner’s lifetime. (Kaldenbach, at p. 834.) Term life 

insurance, which McHugh purchased, provides only a death 

benefit, and it does so only for a set duration of years. 

(Fairbanks, at p. 547.) It does not accrue and pay out a cash 

value. (Estate of Logan (1987) 191 Cal.App.3d 319, 324; see also 

Logue, The Current Life Insurance Crisis: How the Law Should

Respond (2002) 32 Cumb. L.Rev. 1, 17 [“A characteristic of term 

life insurance is that if the insured fails to renew or cancels his 

policy, the coverage will cease and any premiums that have been 

paid (and earned) will not be refunded”].) 

Despite the differences between term and cash value life 

insurance, the importance of one aspect of insurance for the 

larger public remains relatively constant across policy types: 

Consumers often find it very difficult and costly to replace a 

policy, including one that has been cancelled because of a missed 

premium payment. They may need to spend money so they can

purchase a new policy; they may be forced to pay more expensive

premiums because they are being insured at an older age and 

possibly after having developed health conditions; they may 

need to pay commission charges and similar fees; they may be 

forced to live with new incontestability or suicide clauses; and 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

7

they may be barred from accessing the cash value in their new 

policy for a considerable time. (See, e.g., In re Prudential Ins. 

Co. of Am. Sales Practice Litig. (3d Cir. 2001) 261 F.3d 355, 359, 

fn. 2; Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 

Cal.App.5th 841, 867, fn. 25; DOI, Life Insurance Guide <http://

www.insurance.ca.gov/01-consumers/105-type/95-guides/07-

life/life-ins-guide.cfm>2[as of Aug. 30, 2021]; cf. Wilner v. Sunset 

Life Ins. Co. (2000) 78 Cal.App.4th 952, 965–967.)

In part because of these consequences, the insurance 

business is a matter of public interest. (Calfarm Ins. Co. v.

Deukmejian (1989) 48 Cal.3d 805, 830 (Calfarm); see also 20th 

Century Ins. Co. v. Superior Court (2001) 90 Cal.App.4th 1247, 

1265 & fn. 9.) So insurance contracts are subject to substantial 

regulation under the state’s police power. (Calfarm, at p. 830.) 

The state regulates insurance contracts primarily through the 

Insurance Code. Policies may be required by the code to include 

certain provisions, and these provisions are deemed to be 

incorporated into every policy to which they pertain. (California 

Fair Plan Assn. v. Garnes (2017) 11 Cal.App.5th 1276, 1305, 

1309.) The laws in effect at the time of a policy’s issuance 

generally govern the policy. (See Interinsurance Exchange of the 

Auto. Club of Southern Calif. v. Ohio Cas. Ins. Co. (1962) 58 

Cal.2d 142, 148 (Interinsurance Exchange); 2 Witkin, Summary

of Cal. Law (11th ed. 2017) Insurance, § 10, p. 44.) This general 

rule promotes certainty in the commercial and legal relationship 

between insurers and insureds. (See Swenson v. File (1970) 3 

Cal.3d 389, 394–395.) Subject to certain constitutional 

2 All Internet citations in this opinion are archived by year, 

docket number, and case name at <http://www.courts.ca.gov/

38324.htm>.
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

8

guardrails, the state may exercise its police power to enact

legislation that affects existing policies. (Calfarm, at pp. 814–

815, 829–831.) 

At the time Protective Life issued McHugh’s policy, the 

Insurance Code provided (and continues to provide) that 

insurers can cancel policies when policy owners fail to pay the 

premium owed. (§ 484.) The code did not require life insurers 

to provide notice when cancelling a policy, including for 

nonpayment of a premium (see Stewart v. Life Ins. Co. of North 

America (E.D. Cal. 2005) 388 F.Supp.2d 1138, 1142), even 

though insurers were responsible for providing notice when

cancelling other forms of insurance (see, e.g., § 662, subd. (a) [for 

automobile policies]; 2 Witkin, Summary of Cal. Law, supra, 

Insurance, § 319, pp. 493–494). But the terms of the policy may 

create a duty for insurers to provide cancellation notices, or

insurers may provide such notices as a general business 

practice, as Protective Life did. (See 16 Williston on Contracts 

(4th ed. 2014) § 49:85, pp. 728–731.) Such notice protects policy

owners from losing coverage due to their neglect (5 Couch on 

Insurance (3d ed. 2012) § 76:23, p. 76-52) or enables them to 

obtain insurance elsewhere before being subject to risk without 

protection (2 Couch on Insurance (3d ed. 2010) § 32:1, p. 32-7). 

Moreover, at the time Protective Life issued McHugh’s 

policy, the Insurance Code did not require life insurers to 

provide a grace period before cancelling a life insurance policy

for premium nonpayment. But life insurers could, as Protective 

Life did, provide a grace period as a contractual provision and

business practice. (See 5 Couch on Insurance, supra, § 76:47, p. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

9

76-90.)3 A grace period offers an obvious benefit to policy

owners: time to pay a missed premium without an interruption 

in coverage. (16 Williston on Contracts, supra, § 49:80, p. 699; 

see Pediatricians, Inc. v. Provident Life & Acc. Ins. Co. (1st Cir. 

1992) 965 F.2d 1164, 1168 (Pediatricians).) Grace periods can 

also provide a business advantage to insurers. Of course, 

insurers depend on the regular, timely payment of premiums in 

order to pay death benefits and cover the cost of administering 

policies. (See New York Life Ins. Co. v. Statham (1876) 93 U.S.

24, 30 [“[I]t must be conceded that promptness of payment is 

essential in the business of life insurance. All the calculations 

of the insurance company are based on the hypothesis of prompt 

payments”]; 16 Williston on Contracts, supra, § 49:75, p. 655.) 

But grace periods decrease the probability that policy owners

will terminate the policy accidentally or because of temporary 

financial difficulties, and thus increase the likelihood that policy

owners will continue the insurance in effect, providing the 

insurer not just with the premium then due but also future 

premiums. (16 Williston on Contracts, supra, § 49:80, pp. 699–

700; Pickens v. State Farm Mut. Auto. Ins. Co. (S.C. 1965) 144 

S.E.2d 68, 71; Pediatricians, at pp. 1168–1169.)

B.

In 2012, the Legislature enacted Assembly Bill No. 1747

(2011–2012 Reg. Sess.), grafting sections 10113.71 and 10113.72

onto the Insurance Code. (Stats. 2012, ch. 315, §§ 1, 2.) These 

3 The 31-day grace period Protective Life provided typifies

the grace periods found in many policies. (16 Williston on 

Contracts, supra, § 49:80, p. 699.) California regulations at the 

time provided for a 31-day grace period. (Cal. Code Regs., tit. 

10, § 2534.3.)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

10

provisions, enacted after Protective Life issued McHugh’s policy 

but before it cancelled the policy, changed the grace period and 

notice requirements for life insurance policies in California. 

Section 10113.71 established a 60-day grace period after a

missed premium. Subdivision (a) states: “Each life insurance 

policy issued or delivered in this state shall contain a provision 

for a grace period of not less than 60 days from the premium due 

date. The 60-day grace period shall not run concurrently with 

the period of paid coverage. The provision shall provide that the 

policy shall remain in force during the grace period.”4 

(§ 10113.71, subd. (a).) The section also requires insurers to 

notify policy owners, as well as persons designated by the policy

owners to receive notice (under section 10113.72), at least 30 

days before terminating a policy due to a payment lapse. 

(§ 10113.71, subd. (b)(1).) Subdivision (b)(1) states: “A notice of 

pending lapse and termination of a life insurance policy shall 

not be effective unless mailed by the insurer to the named policy 

owner, a designee named pursuant to Section 10113.72 for an 

individual life insurance policy, and a known assignee or other 

person having an interest in the individual life insurance policy, 

at least 30 days prior to the effective date of termination if 

termination is for nonpayment of premium.” (Ibid.) And 

subdivision (b)(3) mandates that the “[n]otice shall be given to 

the policy owner and to the designee by first-class United States 

4 As originally enacted, section 10113.71, subdivision (a) 

began with “Every” instead of “Each.” (Stats. 2012, ch. 315, § 1.) 

The Legislature amended the subdivision as part of a code 

maintenance bill making “nonsubstantive changes” to various 

provisions of law. (Legis. Counsel’s Dig., Assem. Bill No. 383 

(2013–2014 Reg. Sess.); see also Stats. 2013, ch. 76, § 137.)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

11

mail within 30 days after a premium is due and unpaid.”

(§ 10113.71, subd. (b)(3).)

Section 10113.72 requires life insurance policies to grant

policy owners the right to designate at least one other person to 

receive a notice of an overdue premium and impending lapse or 

termination of the policy. In subdivision (a), it provides that 

“[a]n individual life insurance policy shall not be issued or 

delivered in this state until the applicant has been given the 

right to designate at least one person, in addition to the 

applicant, to receive notice of lapse or termination of a policy for 

nonpayment of premium.” (§ 10113.72, subd. (a).) It also 

explains that “the insurer shall provide each applicant with a 

form to make the designation,” and that this form must provide 

the applicant with the opportunity “to submit the name, 

address, and telephone number of at least one person, in 

addition to the applicant, who is to receive notice of lapse or 

termination of the policy for nonpayment of premium.” (Ibid.) 

Subdivision (b) provides that insurers “shall notify the policy 

owner annually of the right to change the written designation or 

designate one or more persons,” and that policy owners may 

elect to change the designation more often if they choose to do 

so. (§ 10113.72, subd. (b).) Finally, subdivision (c) prevents an 

insurer from ending a policy for an unpaid premium without 

giving policy owners at least 30 days’ notice. It mandates that 

no policy “shall lapse or be terminated” for an unpaid premium 

“unless the insurer, at least 30 days prior to the effective date of 

the lapse or termination, gives notice to the policy owner and to 

the person or persons designated pursuant to subdivision 

(a) . . . .” (§ 10113.72, subd. (c).)

Both of these sections went into effect on January 1, 2013. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

12

III.

Protective Life maintains that the two new statutes have 

no effect on insurance contracts issued or delivered before 

January 1, 2013. This case turns on whether the appellate court 

was right to embrace that conclusion. To resolve this question, 

we begin by reviewing de novo the Court of Appeal’s 

interpretation of sections 10113.71 and 10113.72. (Kirby v. 

Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1250.) As 

with any question of statutory construction, our core task here

is to determine and give effect to the Legislature’s underlying 

purpose in enacting the statutes at issue. (California Teachers 

Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 

692, 698; Calatayud v. State of California (1998) 18 Cal.4th 

1057, 1065; Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332.) 

We first consider the words of the statutes, as statutory 

language is generally the most reliable indicator of legislation’s 

intended purpose. (In re H.W. (2019) 6 Cal.5th 1068, 1073

(H.W.).) We consider the ordinary meaning of the relevant 

terms, related provisions, terms used in other parts of the 

statute, and the structure of the statutory scheme. (Larkin v. 

Workers’ Comp. Appeals Bd. (2015) 62 Cal.4th 152, 157.) If the 

relevant statutory language is ambiguous, we look to 

appropriate extrinsic sources, including the legislative history, 

for further insights. (H.W., at p. 1073.) We also extend some 

deference to DOI’s interpretations of the Insurance Code, to the 

extent that those interpretations are embodied in quasilegislative regulations or constitute long-standing, consistent, 

and contemporaneous interpretations. (See, e.g., Yamaha Corp. 

of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 12–

13 (Yamaha); Farmers Ins. Exch. v. Superior Court (2006) 137 

Cal.App.4th 842, 859.) 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

13

A.

The Court of Appeal framed its analysis by relying on a

general interpretive principle: the rebuttable presumption that 

a statute does not operate retroactively, and instead operates on 

a prospective basis only. (Myers v. Philip Morris Companies, 

Inc. (2002) 28 Cal.4th 828, 844 (Myers).) The Court of Appeal 

presupposed that applying sections 10113.71 and 10113.72 to 

McHugh’s policy was, in fact, retroactive for purposes of 

applying the presumption against retroactivity. Its only brush 

with this threshold question came toward the end of its analysis, 

where — seeking to tether its statutory analysis to

constitutional principles — the appellate court explained that 

well-settled law dictated that “McHugh’s policy is governed by 

the regulations in effect when it was issued in 2005, and the 

subsequently enacted sections 10113.71 and 10113.72 are not 

incorporated into the policy.” (McHugh, supra, 40 Cal.App.5th 

at p. 1177.) The court’s assumption appears to have been that 

applying the sections here was retroactive because they imposed 

new grace period and notice obligations nowhere found in the 

2005 regulations, which governed already-existing policies and 

lacked these grace period and notice requirements.

Applying the presumption against retroactivity, the court 

emphasized what it took to be the principle’s requirements —

that “ ‘a statute may be applied retroactively only if it contains 

express language of retroactivity or if other sources provide a 

clear and unavoidable implication that the Legislature intended 

retroactive application.’ ” (McHugh, supra, 40 Cal.App.5th at p. 

1174, quoting Myers, supra, 28 Cal.4th at p. 844, italics added 

by Myers.) It then concluded that there was no basis to rebut 

the presumption. (McHugh, at p. 1174.)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

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Protective Life reiterates and expands upon the Court of 

Appeal’s analysis. Regarding whether we face a question of 

“retroactivity”: Protective Life invokes Interinsurance

Exchange, supra, 58 Cal.2d at page 148 to urge that reading the 

grace period and notice protections into McHugh’s policy would 

be a retroactive application, since insurance policies are 

putatively governed by the law in effect when they are issued. 

Because no statutory law pre-2013 created grace period and 

notice requirements related to missed life insurance premiums, 

what Protective Life is arguing, then, is that the absence of 

regulation should be read into McHugh’s policy, and that 

holding otherwise would be to rewrite the policy. 

Plaintiffs argue, however, that this case involves an 

entirely prospective statutory application because they seek no 

more than application of the grace period and notice 

requirements to missed premium payments occurring after

sections 10113.71 and 10113.72 went into effect. In other words, 

plaintiffs argue that this case merely concerns Protective Life’s 

postenactment conduct with respect to policies in force as of 

January 1, 2013. They contend that this statutory application 

is not “retroactive” at all because it does not materially alter the 

contractual agreement memorialized in McHugh’s policy, and 

similarly situated policies, in a way that unfairly undermines 

the parties’ reliance interests. In the alternative, plaintiffs 

argue that this statutory application does not implicate 

principles of retroactivity because any retroactive effect here is 

minimal and will not substantially impair any vested 

contractual rights. 

We find support for both of plaintiffs’ arguments. Our 

previous decisions buttress plaintiffs’ understanding of the 

presumption against retroactivity, and whether it even applies. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

15

We conclude that under either alternative theory, the 

interpretive presumption does not vindicate Protective Life’s 

position.

1.

The presumption against retroactivity is, at core, a canon 

to facilitate interpretation rather than an inexorable command. 

(People v. Superior Ct. (Lara) (2018) 4 Cal.5th 299, 307; see

Medical Board v. Superior Court (2001) 88 Cal.App.4th 1001, 

1013.) In cases where the presumption is potentially implicated, 

we must consider both its overall role — helping guide us in our 

core endeavor of determining and giving full effect to a statute’s 

underlying purpose — and the specific premise for applying it in 

that particular case. (People v. Garcia (2016) 62 Cal.4th 1116, 

1124; see Tapia v. Superior Ct. (1991) 53 Cal.3d 282, 301

(Tapia); Fox v. Alexis (1985) 38 Cal.3d 621, 629.) We apply the 

presumption in the absence of explicit legislative indications of

retroactivity, doing so based on the fundamental fairness 

considerations raised by “ ‘imposing new burdens on persons 

after the fact.’ ” (McClung v. Employment Development Dept.

(2004) 34 Cal.4th 467, 475 (McClung); see id. at p. 476

[“ ‘Requiring clear intent assures that [the legislative body] 

itself has affirmatively considered the potential unfairness of 

retroactive application and determined that it is an acceptable 

price to pay for the countervailing benefits’ ”].) 

These considerations influence the threshold question 

courts must answer before even applying the presumption 

against retroactivity: Is the statutory change in question 

“ ‘retroactive’ ” or “ ‘prospective’ ”? (Californians for Disability 

Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 230 (Mervyn’s).) 

In theory, these concepts are simple; in practice, they often 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

16

prove more elusive. To distinguish between “retroactive” and 

“prospective” statutory applications, we explained the need to 

deploy the following standard: “We must consider ‘ “ ‘the nature 

and extent of the change in the law and the degree of connection 

between the operation of the new rule and a relevant past 

event’ ” ’ ”; “ ‘ “ ‘familiar considerations of fair notice, reasonable 

reliance, and settled expectations offer sound guidance.’ ” ’ ” 

(Quarry v. Doe I (2012) 53 Cal.4th 945, 955 (Quarry).) In 

keeping with these principles, we have generally explained that 

a new law operates “retroactively” when it changes “ ‘ “the legal 

consequences of past conduct by imposing new or different 

liabilities based upon such conduct.” ’ ” (Mervyn’s, at p. 231.)

We have asked whether the new law “ ‘ “substantially affect[s] 

existing rights and obligations.” ’ ” (Ibid., italics added.)

Plaintiffs advance this understanding of retroactivity. Yet some 

of our cases can potentially be read to articulate a broader 

definition of retroactivity, which Protective Life argues we 

should apply. In Myers, for example, we stated that a statute 

operates retroactively when it “ ‘ “affects rights, obligations, 

acts, transactions and conditions which are performed or exist 

prior to the adoption of the statute.” ’ ” (Myers, supra, 28 Cal.4th 

at p. 839, quoting Aetna Cas. & Sur. Co. v. Ind. Acc. Com. (1947) 

30 Cal.2d 388, 391 (Aetna).) This broader definition seems to 

embrace any conceivable statutory impact on the terms of an

existing contract — including an insurance contract — as 

Protective Life urges. 

The two differing conceptions of “retroactivity” at play

underscore why the term and its antonym “are not always easy 

to apply to a given statute.” (Quarry, supra, 53 Cal.4th at p. 

955; see 2 Sutherland, Statutes and Statutory Construction (7th 

ed. 2009) § 41:1, p. 385.) Established precedent nonetheless 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

17

helps us clarify any potential ambiguity and strongly favors

plaintiffs’ retroactivity approach.

Consistent with the presumption’s underlying logic, our 

cases defining “retroactivity” have principally focused on 

whether the statutory change in question significantly alters 

settled expectations: by changing the legal consequences of past 

events, or vitiating substantial rights established by prior law. 

(See, e.g., Quarry, supra, 53 Cal.4th at p. 956; Strauss v. 

Horton (2009) 46 Cal.4th 364, 472; Elsner v. Uveges (2004) 34 

Cal.4th 915, 937; McClung, supra, 34 Cal.4th at p. 472; Tapia,

supra, 53 Cal.3d at p. 290; see also Western Security Bank v. 

Superior Court (1997) 15 Cal.4th 232, 243 (Western) [a 

retroactive statute “substantially changes the legal 

consequences of past events,” and “[a] statute does not operate 

retrospectively simply because its application depends on facts 

or conditions existing before its enactment”]; Landgraf v. USI 

Film Products (1994) 511 U.S. 244, 266, 269–270 (Landgraf)

[similar].) Even Myers, supra, 28 Cal.4th at page 839 followed

up its potentially more expansive articulation of “retroactivity” 

by explaining that, “[p]hrased another way, a statute that 

operates to ‘increase a party’s liability for past conduct’ is 

retroactive.” Leading cases addressing “retroactive” legislation 

have confronted such changes in settled expectations. 

This was true, for example, of the amendments to title VII 

of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) at issue 

in Landgraf, supra, 511 U.S. 244. The changes matched new 

remedies to certain statutory violations. (Ibid.) Courts have 

also turned to drawing the retroactivity-no retroactivity line 

with respect to the new certificate requirement for Chinese 

nationals’ reentry in Chew Heong v. United States (1884) 112 

U.S. 536 (discussed in Landgraf, at pp. 271–272); the new 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

18

liability rule added by Proposition 51 (adopted by voters in June 

1986) in Evangelatos v. Superior Court (1988) 44 Cal.3d 1188; 

the increased worker compensation benefits in Aetna, supra, 30

Cal.2d 388; and, finally, the repeal of statutory tort immunity 

for tobacco companies in Myers, supra, 28 Cal.4th 828. The 

changes wrought by sections 10113.71 and 10113.72, by 

contrast, do not disrupt clearly settled expectations in such 

fashion — so it’s not clear they operate “retroactively” at all. 

To wit: The grace period and notice obligations added by 

sections 10113.71 and 10113.72 do not impact a life insurer’s

liability for past, preenactment defaults. Nothing in these 

sections compels insurers to reinstate any policy cancelled 

preenactment less than 60 days after a missed premium 

payment. Nor do the changes otherwise impinge on a 

contracting party’s substantial rights or unfairly upset the 

bargain memorialized in the insurance policy, for example, by 

requiring an insurer to provide substantially expanded coverage 

without also giving it an opportunity to raise premiums. (Cf. 

Interinsurance Exchange, supra, 58 Cal.2d at p. 148 

[“retroactive” statutory change would have repealed a rule 

requiring a mandatory provision in automobile insurance 

policies covering certain permittees; if applied to previously 

negotiated contracts, this change would have upended the 

bargain struck].) The grace period and notice rules make 

relatively cabined, procedural changes to how insurers 

administer policies routinely subject to public regulation — they 

require insurers to provide policy owners with limited but 

critical safeguards to avoid defaulting. These new rules affect 

contractual relationships in a field pervasively “ ‘affected with a 

public interest,’ ” and thereby already heavily regulated by the 

state. (Calfarm, supra, 48 Cal.3d at p. 830.) And these rules do 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

19

not unfairly “rewrite” existing policies, as Protective Life 

suggests. They instead merely impose additional rules on 

insurers as a condition of doing business in California — rules 

that govern insurers’ conduct postenactment when, in the 

future, one of their policy owners misses a premium payment.

5

The context matters. Where a new law makes only 

moderate, procedural-type adjustments to the rules for conduct

that will apply in the event of some future circumstance, in an 

already highly regulated contractual relationship, the new law’s 

application to existing contracts could be regarded as 

prospective rather than retroactive for purposes of the 

presumption. To say the least, this type of statutory application 

falls well short of the quintessential understanding of 

“retroactivity” — the disruption of settled expectations because 

a statutory change “ ‘imposes a new or additional liability and 

substantially affects existing rights and obligations’ ” — that 

can be reasonably gleaned from leading cases such as Tapia, 

supra, 53 Cal.3d at page 290. The concurrence fails to fully 

grapple with this established body of law. (Conc. opn., post, at 

5 Sections 10113.71, subdivision (b) and 10113.72, 

subdivision (c) frame their notice obligations as requirements 

insurers must observe before terminating policies. Section 

10113.71, subdivision (a) arguably operates differently because 

it mandates that policies include a 60-day grace period 

provision. That particular way to frame the policies, and the 

fact that McHugh’s policy already contained a 31-day grace 

period, may imply to some observers that the subdivision 

operates here by formally altering an existing contract. But 

given that the provision does not operate on already-defaulted 

policies before enactment, it’s not clear that it differs in any 

substantive way from a provision simply requiring all insurers 

to, going forward, observe a pretermination 60-day grace period.
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

20

pp. 8–9 [contending only that the majority fails to identify a 

sufficiently analogous case].)

An analogous case drives home our conclusion. In 

Mervyn’s, supra, 39 Cal.4th 223, we addressed whether 

Proposition 64’s rule, which restricted standing to bring an 

unfair competition law claim to plaintiffs who have suffered an 

injury in fact and have lost money or property, applied to 

pending cases. (Mervyn’s, at pp. 227–228 [law had previously 

authorized any person acting for the general public to sue, and 

Prop. 64, approved by voters in November 2, 2004, deleted this 

language].) We held that applying the proposition to pending

cases “is not to apply [it] ‘retroactively,’ as we have defined that 

term, because the measure does not change the legal 

consequences of past conduct by imposing new or different 

liabilities based on such conduct.” (Mervyn’s, at p. 232; see id. 

at p. 231 [distinguishing Myers, supra, 28 Cal.4th at p. 240, 

where the new law “subjected tobacco sellers to tort liability for 

acts performed at a time when they enjoyed the protection of an 

immunity statute”].)

 So too here. The grace period and notice provisions at 

issue here simply dictate the procedures for terminating policies 

after January 1, 2013. Applying the provisions to policies 

already in effect on that date does not appear to impose new or 

different liabilities based on earlier conduct. (See also Pitts v. 

Perluss (1962) 58 Cal.2d 824, 835 (Pitts) [similar reasoning with 

respect to a regulation preventing substantial adverse selection 

of risks by private insurance companies, as the “regulation looks 

solely to the future; it provides that the future operation of the 

plans comply with the standards. No sanction or penalty 

attaches to any past act of the companies; the companies need 

only discontinue one or more existing noncomplying plans or 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

21

establish complying ones”]; see id. at p. 836 [distinguishing, 

inter alia, Interinsurance Exchange, supra, 58 Cal.2d 142 and 

Aetna, supra, 30 Cal.2d 388, because those cases involved 

attempts “to apply the new law of today to the conduct of 

yesterday”].)

Protective Life contends that some of our cases support a 

different conclusion: that any impact on the terms of an existing 

contract represents a retroactive change for purposes of 

applying the presumption. Our precedent more readily 

establishes a different proposition. The mere fact that a new 

law somehow implicates an existing contract does not, by itself, 

make the law retroactive. (See Western, supra, 15 Cal.4th at p. 

243.) The key is the nature of the new law’s impact — whether 

it works a substantial change in the contracting parties’ rights

or obligations. (See, e.g., Tapia, supra, 53 Cal.3d at p. 290.) It’s

far from clear that any of the effects identified by Protective Life

and industry amici curiae rise to this level.

Protective Life argues simply that applying the grace 

period and notice requirements to McHugh’s policy and others 

like it goes against contractual counterparties’ strong interests 

in avoiding unexpected shifts in their legal relationship. It 

asserts, as a general matter, that “[t]he agreed-to premium 

pricing reflected, among other things, the grace period and 

notice provisions in the policies.” Protective Life’s argument 

ultimately boils down to an assertion of its expectations that 

sections 10113.71 and 10113.72 would not apply to previously 

enacted policies: It expected these policies to be governed by 

“the old rules” and can’t now change premiums to account for 

the new rules. We question the prudence of this expectation, 

since, as we have previously observed, the “highly regulated” 

nature of the insurance industry means that “further 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

22

regulation” on policies by the Legislature “can reasonably be 

anticipated.” (Calfarm, supra, 48 Cal.3d at p. 830.) Even 

setting this aside, though, Protective Life’s argument fails to 

persuade. The insurer’s generalized, amorphous allusion to 

financial impact does not specifically identify any way in which 

the bargain memorialized in the insurance contract would be 

substantially upset by applying the grace period and notice 

provisions to future cancellations of policies issued before 

January 1, 2013. 

Industry amici curiae’s further arguments, though more 

substantiated, also fail to persuade. The Chamber of Commerce 

emphasizes that insurers will have to “devote resources” to 

complying with the notice provisions. But any such resources 

would seem to be minimal. Notice of the designation right need 

only be provided annually and can be sent together with a billing 

statement. As to pretermination notice, it is standard industry 

practice to provide some notice before terminating an insurance 

policy for nonpayment of a premium. (Ante, at p. 8.) Indeed, 

although McHugh’s policy did not require any pretermination 

notice, Protective Life sent McHugh letters reminding him that 

his payment was due, informing him that his payment was late, 

and then informing him that his policy had lapsed but could be 

reinstated. The American Council of Life Insurers points out 

that if the insured dies during the extended grace period, the 

insurer will be required to pay benefits for which it has not 

received a premium. But this burden is at least somewhat 

offset, since the insurer would be entitled to deduct the unpaid 

premium payment from any life insurance benefits it pays out. 

Under the circumstances presented, there appears to be 

only one way an insurer could incur a significant unaccountedfor loss because of sections 10113.71 and 10113.72: If the grace 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

23

period and notice provisions prevent inadvertent defaults that 

the insurer had anticipated and baked into its rates — that, 

after all, is the problem the provisions were designed to address. 

If, however, insurers did not specifically account for a projected 

rate of inadvertent default when setting their rates, then any 

such default would result in a windfall to the insurer. As 

amicus curiae California Advocates for Nursing Home Reform, 

Inc., explains: A windfall, or “ ‘Lapse Profit,’ ” arises when a 

policy owner’s missed premium payment allows the insurers to 

“ ‘pocket’ years of premium[s],” potentially totaling several

thousands of dollars, and “simply walk away from any obligation 

[to] pay anything to [its] ‘former client[].’ ” One additional 

consideration for why a windfall may occur: Premiums in a 

policy’s earlier years exceed the cost of providing coverage.

(Fairbanks, supra, 197 Cal.App.4th at pp. 547–548.)

6

Here, neither Protective Life nor amici curiae argue that

insurers accounted for a particular rate of inadvertent default

in setting premiums before January 1, 2013. Though they 

generally reference premium pricing and financial projections,

they do not specifically claim to have included in their ratesetting calculations an anticipated percentage of policy owners 

who, due to illness, incapacity, or other factors, would fail to pay 

their premiums and lose coverage, thereby relieving the 

insurers from the obligation to pay out death benefits. In fact, 

Protective Life argued at trial — and the jury accepted — that 

the notices and grace period it actually provided to McHugh 

substantially complied with and largely replicated sections 

6 We recognize that, theoretically, some number of policy 

owners might deliberately allow a policy to lapse rather than 

cancelling it to maintain coverage during the grace period.
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

24

10113.71 and 10113.72. Taken together, the arguments offered 

fall short of clearly showing how the sections’ new protections 

constituted a disruptive contract change of the sort that would 

qualify as “retroactive” under our precedent. 

2.

If it’s far from obvious that applying sections 10113.71 and 

10113.72 to existing life insurance policies is retroactive under 

well-settled case law, it’s also clear that Protective Life’s 

argument about the scope of these two new sections still fails to 

persuade us even if one considered the provisions in question to 

have some retroactive effect. For some observers, the statutory

changes in question might be considered to go beyond nominal 

or trivial alterations to existing contracts. To the extent some 

of our cases can be read to suggest a broader understanding of 

“retroactivity” — one potentially embracing any statutory 

impact on an existing insurance contract (see Myers, supra, 28 

Cal.4th at p. 839) — our precedent nonetheless still supports a 

conclusion in plaintiffs’ favor.

As plaintiffs argue, even if applying sections 10113.71 and 

10113.72 in this case is retroactive, it is retroactive only in a 

relatively narrow sense. True: The sections, if applied to 

preenactment policies, do create new rules for insurers in

administering these policies. Because the grace period and 

notice provisions expand insurers’ pretermination requirements 

beyond the bargained-for policy terms, they technically affect 

“ ‘ “rights, obligations, acts, transactions and conditions” in 

existence “prior to the adoption of the [sections].” ’ ” (Myers, 

supra, 28 Cal.4th at p. 839.) But, for the same reasons that one 

could conclude this case does not present a question of 

retroactivity, we determine that any nominal retroactive effect 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

25

arguably at issue here plainly fails to present the type of concern 

underlying the application of the presumption as we have 

ordinarily understood it. 

The retroactivity presumption is not a “straitjacket.” (In 

re Estrada (1965) 63 Cal.2d 740, 746.) Nothing in our cases calls 

on us to apply the presumption for any conceivable type of 

preenactment impact, however slight. Instead, our case law

calls for application of the presumption where applying the new 

law implicates fundamental fairness concerns, including by 

“foist[ing] upon past conduct new and onerous legal 

consequences.” (Pitts, supra, 58 Cal.2d at pp. 835–836.) In 

Myers, supra, 28 Cal.4th 828, for instance, the retroactive legal 

change in question subjected tobacco sellers to tort liability for 

prior acts performed when they enjoyed the protection of an 

immunity statute. (See also Tapia, supra, 53 Cal.3d at pp. 297–

299 [retroactive legal change subjected persons to increased 

punishment for past criminal conduct, or to punishment for past 

conduct not formerly defined as criminal].) By contrast, the new 

grace period and notice requirements do not thrust new legal 

consequences onto Protective Life’s preenactment policy 

terminations or otherwise appear to cause the insurer to bear 

significant and unanticipated costs for its pre-2013 policies. 

Instead, the new rules simply updated how the regulatory 

system governing life insurance terminations treats all policies 

going forward. Therefore, insofar as these new rules operate 

“retroactively,” that is not the type of retroactivity that warrants 

our usual level of reluctance to construe statutes retroactively. 

In summary, this case may be viewed as not involving

“retroactivity” as our cases have generally defined the term, or 

alternatively as involving retroactivity only in a narrow sense —

one different from the type of preenactment impact at the 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

26

heartland of the presumption’s concerns and at issue in cases 

applying the presumption. We need not choose between the two 

views. Under either, we decline to give the presumption such

weight that it determines the outcome of this case.

B.

Having explored the presumption against retroactivity,

the broader interpretive question remains: whether sections

10113.71 and 10113.72 apply to McHugh’s policy and similarly 

situated ones. We conclude that they do.

Before engaging in our interpretive analysis, we make one 

brief observation: As the concurrence implies, our precedent 

leaves open the possibility of simply assuming that this case 

presents an instance of retroactivity and therefore merits 

application of the presumption against retroactivity. (Conc. 

opn., post, at pp. 6–7.) And if the presumption applies with its 

ordinary weight, the indicia of legislative purpose here could

rebut it. (See, e.g., id. at pp. 3–4 [emphasizing the breadth of 

the statutory language]; id. at pp. 5–6 [highlighting the 

legislative history discussion of problems facing existing 

policyholders]; cf. post, at pp. 33–37.) 

But the most thorough approach, consistent with previous 

cases, is to address a threshold question: whether sections 

10113.71 and 10113.72 even create retroactive changes for 

purposes of the presumption. (Ante, at p. 15.) That way, we 

avoid having to apply the canon in a circumstance where it’s not

necessary, and where our cases do not definitively indicate that 

the presumption has been rebutted. (Compare conc. opn., post,

at pp. 5–6 with McClung, supra, 34 Cal.4th at p. 475

[presumption not rebutted where legislative history lacked 

retroactivity discussion].)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

27

1.

We start with the statutory language. (H.W., supra, 6 

Cal.5th at p. 1073.) 

On the one hand, broadly applicable language found in 

many of the sections’ subdivisions, and the absence of any 

temporal qualifiers in this language, supports plaintiffs’ 

argument that the sections apply to all policies in force as of 

January 1, 2013. On the other hand, different parts of the 

provisions plausibly favor the interpretations urged by both

parties. One provision, section 10113.72, subdivision (a), 

unmistakably applies only to new policies; but some provisions 

likely seem to apply to both new and existing policies, and some 

could be read either way. Because the parties’ linguistic parsing

at times plausibly cut in opposing directions, and because we 

must interpret these provisions as a package, the net effect is 

one of some potential statutory ambiguity. To see why, consider 

each provision in turn.

Section 10113.72, subdivision (a) relates to the right to

designate at least one third party recipient to receive a missed 

premium notice. This provision applies only to new, 

postenactment policies. (McHugh, supra, 40 Cal.App.5th at pp. 

1174–1175.) The language refers repeatedly to the “applicant” 

making a written designation, rather than the “policy owner,” 

clearly indicating it applies only to new policies. (§ 10113.72, 

subd. (a).) Protective Life also persuasively argues that the 

particular phrasing of subdivision (a)’s command — it instructs 

that a policy “shall not be issued or delivered . . . until” an 

applicant has been given the written designation right —

further supports that it applies only to new policies as of 2013, 

since “shall be” commands often signify a statute’s forward-
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

28

looking nature. (Ibid., italics added; cf. Russell v. Superior 

Court (1986) 185 Cal.App.3d 810, 818–819.)

But subdivision (b) of section 10113.72 does not refer to 

“applicant[s],” nor does it use “shall be” language. The 

subdivision requires insurers to annually notify “policy 

owner[s]” for their right to update and change their third party 

notice designation. (§ 10113.72, subd. (b).) It could easily apply 

to both new policies and those already in force as of January 1, 

2013. The subdivision provides an opportunity for the policy

owner on an existing policy with no designation to “designate 

one or more persons” (ibid.) — a right that could apply 

regardless of when the policy was issued. (See Bentley v. United 

of Omaha Life Ins. Co. (C.D. Cal., June 22, 2016, No. CV15-7870-

DMG (AJWx)) 2016 WL 7443189, p. *4 (Bentley).) Indeed, as 

plaintiffs persuasively argue, nothing in this language appears 

to limit this right only to those “policy owners” who purchased 

insurance postenactment. (See ibid.)

Even so, we can’t determine for sure from the isolated 

language of section 10113.72, subdivision (b) that the 

designation right unambiguously applies to all policies. 

Protective Life counters plaintiffs’ plausible reading of 

subdivision (b) with its own potentially tenable interpretation: 

Subdivision (b) does not create a freestanding designation right, 

but instead repeatedly refers back to and builds off its 

immediately preceding provision, subdivision (a) — discussing 

“[t]he insurer,” “the policy owner,” “the right,” “the designation,” 

and “change[s]” to the designation. (§ 10113.72, subd. (b).) In 

other words, subdivision (b) can be read to merely clarify the 

scope of subdivision (a) by requiring that “applicant[s]” who are 

now “policy owner[s]” be advised that they may exercise the 

right to designate by changing or initially naming a designee. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

29

Plaintiffs likely offer the better interpretation, as it gives full 

effect to the several instances where subdivision (b) uses

meaningfully distinct language from subdivision (a). (See, e.g.,

Gomez v. Superior Court (2012) 54 Cal.4th 293, 304; Briggs v. 

Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 

1117.)

7 Yet Protective Life also offers a tenable reading.

Far less ambiguity lurks in the notice provisions. Each

speaks universally, referring to “policy owner[s]” and describing 

its requirement without any apparent limitation on the date of 

issuance. (§§ 10113.71, subd. (b)(1), (3), 10113.72, subd. (c).) 

Section 10113.71, subdivision (b)(1) states broadly that notice of 

pending lapse and termination “shall not be effective unless 

mailed by the insurer” to the policy owner, a designee, and a 

known assignee “at least 30 days prior to the effective date of 

termination.” Section 10113.71, subdivision (b)(3) also sweeps 

broadly, requiring insurers to provide policy owners and 

designees with notice “within 30 days after a premium is due 

and unpaid.” Section 10113.72, subdivision (c) similarly 

provides that “[n]o individual life insurance policy shall lapse or 

be terminated for nonpayment of premium unless the insurer” 

gives the requisite 30-day-minimum notice, and that “[n]otice 

7 Section 10113.72, subdivision (b) differs from its precedent 

subdivision in three ways: It (1) applies to a different 

rightsholder (i.e., a policy owner, versus an applicant); (2) 

describes the exercise of designation at a different point in time 

(i.e., after the policy owner’s initial application, a timing which 

permits both pre- and postenactment policy owners to exercise 

their designation); and (3) creates a different obligation for 

insurers (i.e., to notify policy owners annually regarding their 

designation right, as opposed to providing applicants with a 

designation form). (§ 10113.72, subds. (a), (b).)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

30

shall be given . . . within 30 days after a premium is due and 

unpaid.”

As Protective Life observes, however, the notice provisions 

do include references to the designee for notice under section 

10113.72, which suggests the two sets of provisions are meant 

to work together. That introduces some ambiguity into our 

reading of the notice provisions insofar as the designee 

provisions can be considered ambiguous. If all of section 

10113.72 were read to apply only to new contracts, that would 

be some indication that the notice provisions apply only to new 

contracts as well. But if the more likely reading is that 

designations can also be made under existing contracts under 

section 10113.72, subdivision (b), then we have little reason to 

think that the notice provisions would be restricted to new 

contracts. (We say little reason, rather than no reason, because 

section 10113.72, subdivision (c)’s specific cross-reference to 

subdivision (a) of the same section, and the absence of such a 

specific cross-reference in section 10113.71, subdivision (b), does 

slightly muddy the waters.) In any event, if no notice recipient 

has yet been designated for a policy — which could, of course, 

happen even in the case of a new policy — then the provisions 

requiring notice to the designee are simply ineffective.

Finally, section 10113.71, subdivision (a) addresses the 

grace period provision. Here too, we find support in its language 

for both parties’ arguments. 

Protective Life identifies language in section 10113.71,

subdivision (a) that appears future-oriented: The phrases “shall 

contain” (each policy “shall contain a provision for a grace 

period”) and “shall provide” (“The provision shall provide that 

the policy shall remain in force during the grace period”) in 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

31

subdivision (a) suggest reference to a requirement for policies 

yet to be issued. (See People v. Allied Architects’ Assn. (1927) 

201 Cal. 428, 437.)

Plaintiffs reasonably respond, however, that “shall” in 

10113.71, subdivision (a) represents a mandatory directive for 

all policies (i.e., each policy must be read to contain a grace 

period), rather than a temporal limitation on the policies to 

which the grace period applies. (Evangelatos v. Superior Court, 

supra, 44 Cal.3d at p. 1209, fn. 3; see People v. Ledesma (1997) 

16 Cal.4th 90, 95 [“ ‘shall’ ” can be construed as either 

mandatory or directory as well as denote future operation].) 

Moreover, they persuasively analyze the past participle “issued 

or delivered.” As used here in the phrase “[e]ach life insurance 

policy issued or delivered in this state,” the reference to what’s 

“issued or delivered” can simultaneously refer to past as well as 

future events. (See Bernal v. NRA Grp. LLC (7th Cir. 2019) 930 

F.3d 891, 895.)8 

Considering section 10113.71, subdivision (a) in context 

supports plaintiffs’ interpretation. (See People v. Garcia (2017) 

2 Cal.5th 792, 805 (Garcia).) As Protective Life itself observes,

the grace period provision has an “intertwined” relationship 

with the notice provisions. The Legislature evidently designed 

8 The Court of Appeal relied on Ball v. California State 

Auto. Assn. Inter-Ins. Bureau (1962) 201 Cal.App.2d 85, 87, to 

read “ ‘issued or delivered’ ” as “customar[il]y” embracing only 

postenactment policies. (McHugh, supra, 40 Cal.App.5th at p. 

1176; see id. at p. 1175.) But nothing in our case law suggests 

that Ball, which concerned a statute impacting automobile 

liability policies, provides the type of “definitive judicial 

construction” of the phrase “issued or delivered” that we can 

presume the Legislature knew of and sought to adopt here. 

(Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 675.)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

32

the grace period to work in conjunction with the notice 

provisions, which ensure policy owners and their designees

receive notification of a pending lapse and termination at least 

30 days before the 60-day grace period has expired. (See Assem. 

Com. on Insurance, Background Information Sheet for Assem. 

Bill No. 1747 (2011–2012 Reg. Sess.) Feb. 27, 2012, p. 2.)

Indeed, it appears intentional that the two 30-day windows

provided by the notice provisions operate within and can add up 

to the 60-day grace period: The insurer has up to 30 days after 

a missed premium payment to give notice (§§ 10113.71, subd. 

(b)(3), 10113.72, subd. (c)), and a separate 30 days that must 

follow before a mailed notice becomes effective to terminate a 

policy for nonpayment (see §§ 10113.71, subd. (b)(1), 10113.72, 

subd. (c)). Given this relationship, it certainly seems sensible 

that the grace period would, as the notice provisions appear to 

do, apply universally.

Admittedly, the notice provisions can perhaps be capable 

of operating independently of the grace period provision — the 

former applying to all policies, the latter to new policies only. 

The notice provisions themselves effectively establish a grace 

period of 30 to 60 days. But it seems unlikely that the 

Legislature meant for the notice provisions to drive the scope of 

protections conferred for nonpayment in the class of cases 

involving existing contracts, particularly since it did not draw 

any express distinctions in any of the provisions on the basis of 

policy issue date. It seems more reasonable to construe the 

statutory provisions as a package, as either all applying to 

existing contracts or not. That the provisions work together —

the notice provisions require sending notice to the policy owner 

and an individual designated under the new designation 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

33

procedures, within the time frame established by the new graceperiod provision — reinforces our conclusion. 

In view of how these provisions interact, the broadly 

applicable language found in most of the relevant statutory 

passages tends to cut in favor of plaintiffs’ interpretation. (Cf. 

conc. opn., post, at pp. 3–4.) That said, Protective Life does 

identify some language cutting in favor of its narrower 

interpretation — and the statutory sections at issue stop short 

of conclusively establishing precisely how the provisions work. 

To resolve any potential ambiguity in the language, we must 

look to other sources to determine whether, as plaintiffs argue, 

the provisions’ intended purpose entails applying them to 

existing contracts. (H.W., supra, 6 Cal.5th at p. 1073.)

2.

Other indicia of purpose, gleaned from context, resolve any 

latent ambiguity in the language of sections 10113.71 and 

10113.72. They indicate that the sections apply to all policies in 

force as of January 1, 2013.

To begin with, the statutory sections appear to create a 

single, unified pretermination notice scheme. This scheme

appears to include three components: (1) New and existing 

policy owners must have the opportunity to designate additional 

people to receive a notice of termination (§ 10113.72, subds. (a), 

(b)); (2) policy owners and any designees must receive notice 

within 30 days of a missed premium payment, and any 

termination for nonpayment will not be effective unless insurers 

send notice to these parties at least 30 days prior (§§ 10113.71, 

subd. (b)(1), (3), 10113.72, subd. (c)); and (3) each policy has a 

60-day grace period, which lines up with the two 30-day notice 

windows (§ 10113.71, subd. (a)). In light of these new, detailed 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

34

statutory notice requirements, it seems doubtful the Legislature 

contemplated that insurance companies would, going forward, 

simultaneously implement two vastly different notice schemes: 

one applying to pre-2013 policies that requires only 31-day 

notices before termination and no right to designations, and a 

post-2013 scheme as described. It thus seemed largely assumed 

that insurance companies would implement the single, new 

notice scheme, which would have the effect of benefitting both 

new and existing policy owners. 

The legislative history supports this conclusion. Those 

involved in the legislative process seemed to take for granted a 

single, standardized notice scheme. (See, e.g., Assem. Com. on 

Insurance, 3d reading analysis of Assem. Bill No. 1747 (2011–

2012 Reg. Sess.) as amended May 9, 2012, p. 2.)

Moreover, the legislative history provides several 

indications that the Legislature enacted the grace period and 

notice protections in part to protect existing policy owners from 

losing the important life insurance coverage they had spent 

years paying for. The Assembly and Senate materials on 

Assembly Bill No. 1747 (2011–2012 Reg. Sess.) include purpose 

and supporting argument statements like the following: 

“According to the author, the bill provides consumer safeguards 

from which people who have purchased life insurance coverage, 

especially seniors, would benefit. Under existing law, 

individuals can easily lose the critical protection of life 

insurance if a single premium is accidentally missed (even if 

they have been paying premiums on time for many years). If an 

insured individual loses coverage and wants it reinstated, he or 

she may have to undergo a new physical exam and be 

underwritten again, risking a significantly more expensive, 

possibly unaffordable premium if his or her health has changed 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

35

in the years since purchasing the policy. Therefore, the 

protections provided by [Assembly Bill No.] 1747 are intended 

to make sure that policy owners have sufficient warning that 

their premium may lapse due to nonpayment.” (Assem. Com. on 

Insurance, Analysis of Assem. Bill No. 1747 (2011–2012 Reg. 

Sess.) as amended Apr. 26, 2012, pp. 1–2, italics added

(hereafter Assem. Com. on Insurance Analysis); see also Sen.

Com. on Insurance, Analysis of Assem. Bill No. 1747 (2011–2012 

Reg. Sess.) as amended June 7, 2012, p. 3 [longtime policy

owners may miss a payment “because they were being 

hospitalized when the bill came, in others, as a result of a mail 

mix-up or forgetfulness, etc.”].) Where, as here, the author’s 

statements are part of committee materials — and are therefore 

relayed not merely as personal views, but instead as part of the 

Legislature’s consideration of the bill — they can serve as 

salient reflections of legislative purpose. (See Carter v. 

California Dept. of Veterans Affairs (2006) 38 Cal.4th 914, 928.)

Protective Life argues that the legislative history does not 

clarify the statutory language, but we are not persuaded. True: 

The materials do not explicitly consider the reach of the broadly 

worded, but less than crystal clear, grace period and notice 

provisions; and their references to protecting “seniors” could be 

to the people whom the Legislature anticipated would benefit 

from the new law down the line. But the insurer ignores the 

clear guidance the materials do provide. At the very least, they

reflect lawmakers’ (a) awareness that consumers tend to hold 

life insurance policies for long periods and to pay premiums for 

many years; and (b) concern that policy owners, “especially 

seniors” (Assem. Com. on Insurance Analysis, supra, at p. 1),

may lose the benefits of these extended payments by failing to 

pay a single annual premium on time, and thereafter face
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

36

hardship to regain coverage. It would certainly be consistent 

with the Legislature’s awareness and concern for it to seek to

protect all policy owners from losing coverage. (Cf. Calfarm, 

supra, 48 Cal.3d at p. 827; conc. opn., post, at pp. 5–6.)

The consequences of Protective Life’s interpretation 

strongly suggest, given the legislative history, that it wasn’t in 

the ambit of the Legislature’s purpose for the statute to operate 

as the insurer describes. (See Copley Press, Inc. v. Superior 

Court (2006) 39 Cal.4th 1272, 1291 (Copley).) Indeed, the 

insurer’s interpretation would produce results seemingly

incongruous with the legislation’s broader aims of preventing 

forfeiture and its specific motivating concerns. As the 

Legislature identified, policy owners may fail to make a 

payment on time for a host of understandable reasons, including 

some related to their age or health. But the very consumers the 

Legislature identified as needing protection the most against 

this risk — seniors and other longtime, potentially infirm or 

incapacitated policy owners — would not presently be entitled 

to the safeguards to help them maintain coverage they and their 

beneficiaries depend on. They would face a host of adverse 

financial consequences to resume coverage. (Ante, at p. 6.)

Meanwhile, those who arguably need protection the least —

younger policy owners, who recently purchased life insurance, 

are less likely to miss a payment due to infirmity or 

deteriorating health, and face a lower loss of past premium 

investment and an easier time regaining coverage — are 

protected, and with measures that will be likely consequential 

to them only when they become “seniors” years down the line. If 

a paradigmatic beneficiary of the new legislation was, say, a 70-

year-old life insurance policy owner who had paid premiums for 

30 years before missing an annual payment, a new-policy-only 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

37

construction would mean that a person in this situation 

wouldn’t garner protection from the new laws before 2043. Even 

for a forward-thinking Legislature, this seems like a stretch.

(Cf. Bentley, supra, 2016 WL 7443189, at p. *4 [declining to give 

effect to the “absurd result[s]” of Protective Life’s 

interpretation].)

Assembly Bill No. 1747 (2011–2012 Reg. Sess.) also cuts 

in favor of reading sections 10113.71 and 10113.72 broadly. The 

bill not only added these sections to the Insurance Code, but also 

amended section 10173.2, which concerns when life insurance 

policies are assigned as security for a debt and the notice that 

the insurer must give the assignee when the policy owner fails 

to pay a premium. (§ 10173.2, as amended by Stats. 2012, ch. 

315, § 3.) The Legislature amended section 10173.2 by changing 

some deadlines and revising nonsubstantive language. More 

notable is what section 10173.2 already said prior to 

amendment: “When a policy of life insurance is, after the 

effective date of this section, assigned in writing as security for 

an indebtedness . . . .” (§ 10173.2, italics added.) The italicized 

language by its terms cabins the statute’s application to 

assignments after section 10173.2’s effective date. (Estate of 

Coate (1979) 98 Cal.App.3d 982, 986–987; see also Mardirosian 

v. Lincoln Nat. Life Ins. Co. (9th Cir. 1984) 739 F.2d 474, 477.) 

In other words, when the Legislature added sections 10113.71 

and 10113.72 to the Insurance Code, it knew that another 

statute — indeed, a statute it amended in the very same bill —

used expressly future-oriented language. Despite this, the 

Legislature did not add similar language to sections 10113.71 

and 10113.72. This circumstance provides additional, if modest,

support for the conclusion that the grace period and notice 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

38

provisions apply universally. (Cf. Calfarm, supra, 48 Cal.3d at 

p. 827 [similar]; conc. opn., post, at pp. 4–5.)

The various contextual arguments raised by Protective 

Life and industry amici curiae fail to persuade.

First, Protective Life fails to substantiate its argument 

that construing sections 10113.71 and 10113.72 to apply only to 

postenactment policies gives effect to a key legislative 

compromise. It’s well established that “compromises necessary 

to [a statute’s] enactment may require adopting means other 

than those that would most effectively pursue the main goal.” 

(Landgraf, supra, 511 U.S. at p. 286.) But this general 

proposition doesn’t mean we can strike a bargain the 

Legislature never struck. (Cf. State Dept. of Public Health v. 

Superior Court (2015) 60 Cal.4th 940, 956.) Here, Protective 

Life identifies no indicia of compromise in the legislative history 

or statutory language; instead, it simply invokes the 

presumption against retroactivity, which we have determined 

carries little if any weight in this case. (Ante, at pp. 25–26.)9

Protective Life also contends that the Legislature had 

“good reasons” to restrict the application of sections 10113.71 

and 10113.72 to postenactment policies: to avoid unfairly 

altering the bargained-for grace period and notice rules, which 

the agreed-to premium pricing had taken into account. 

Similarly, amicus curiae Chamber of Commerce claims that 

applying the new grace period to preenactment policies 

“undermines insurers’ ability to prudently manage their 

9 For this reason, we have no occasion to entertain another 

of Protective Life’s arguments: that the Legislature’s failure to 

enact the sections as part of urgency legislation cuts against 

rebutting the presumption against retroactivity. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

39

resources” and could leave insurers with “inadequate funds to 

pay valid claims” statewide. Yet without evidence that 

Protective Life or other insurers anticipated and accounted for 

a projected rate of inadvertent defaults when setting their 

premiums (ante, at p. 23), we have no basis to determine either 

that (a) the new protections will create a significant financial 

impact for insurers, or (b) the Legislature would have sought to 

avoid such a policy outcome. 

Moreover, we note that plaintiffs and supporting amici

curiae offer their own “good reasons” why the Legislature would 

apply pretermination procedures to all policies: The procedures 

(1) promote continuity in the insuring arrangement (cf. Bittinger 

v. New York Life Ins. Co. (1941) 17 Cal.2d 834, 840 [“forfeitures 

generally are not favored”]; People v. United Nat. Life Ins. Co.

(1967) 66 Cal.2d 577, 600 [“The insurance industry is regulated

primarily for the benefit of” insureds]); (2) place the burden on 

the party who stands to gain financially from an early 

termination; (3) create standardized rules governing policies; 

and (4) help prevent payment disputes, which typically arise 

after policy owners have died. We take into account these 

considerations insofar as they plausibly counter the policy 

arguments raised by Protective Life and industry amici curiae, 

and they help us determine that plaintiffs’ construction “ ‘leads 

to the more reasonable result.’ ” (Copley, supra, 39 Cal.4th at p. 

1291.)

Finally, Protective Life briefly raises a constitutional 

avoidance argument. (Garcia, supra, 2 Cal.5th at p. 804.) It 

contends that the Legislature’s decision to restrict sections 

10113.71 and 10113.72 to postenactment policies represented 

an “especially sound” decision in light of contracts clause

concerns that would have flowed from altering the terms of 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

40

existing policies. (U.S. Const., art. I, § 10; see Cal. Const., art. 

I, § 9.) What we conclude instead — relying on similar logic that 

applies in our separate analysis of the presumption of 

retroactivity (see Myers, supra, 28 Cal.4th at p. 841 [explaining 

the presumption is rooted in constitutional principles]) — is that 

requiring insurers to observe a 60-day grace period and give 30 

days’ notice of impending lapse does not substantially impair 

Protective Life’s contractual rights under an existing policy. 

Calfarm, supra, 48 Cal.3d at pages 830–831 supports our 

conclusion.

C.

The Court of Appeal held that insurance policies already 

in effect when the Legislature reformed grace period and notice 

requirements were not affected by sections 10113.71 and 

10113.72. In reaching this conclusion, the appellate court cited 

DOI guidance about these sections and claimed it had an 

obligation to defer to these agency interpretations. We find 

otherwise. 

According to the Court of Appeal, two sources of DOI

guidance established the agency’s position that the sections

apply only to policies issued after January 1, 2013. First, the 

court pointed to SERFF. (McHugh, supra, 40 Cal.App.5th at p. 

1172.) SERFF is an internet-based system for insurers to 

submit rate and form filings to the DOI for review and approval. 

(Ibid.) According to the Court of Appeal, DOI “mandates the use 

of SERFF and provides regulatory guidance to insurers through 

SERFF, including guidance for compliance with the statutes.” 

(Ibid.) As the court explained, DOI provided its determination 

that sections 10113.71 and 10113.72 apply only to 

postenactment policies with its SERFF “ ‘Instructions for 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

41

Complying with [Assembly Bill No.] 1747,’ ” which stated: “ ‘All 

life insurance policies issued or delivered in California on or 

after [January 1, 2013] must contain a grace period of at least 

60 days.’ ” (McHugh, at p. 1172.) Second, the Court of Appeal 

observed that senior DOI personnel consistently communicated

in written responses to inquiries from insurance industry 

representatives that the requirements in Assembly Bill No.

1747 (2011–2012 Reg. Sess.) applied only prospectively. 

(McHugh, at p. 1172.) 

The Insurance Commissioner takes a different position in 

his amicus curiae letter, arguing that the Court of Appeal erred 

on both fronts. We agree. Neither the SERFF instruction nor 

the correspondence represented official guidance on the agency’s 

construction of sections 10113.71 and 10113.72, and as a result

neither merited any measure of presumptive deference (see 

Yamaha, supra, 19 Cal.4th at pp. 7–8, 11); and Protective Life 

offers no other good reason why we should defer (see id. at pp. 

12–13 [contextual factors such as the agency’s expertise and 

technical knowledge of the issue, and whether the agency’s 

interpretation represents its carefully considered, longstanding, and contemporaneous view, determine what level of 

deference to give]).

In fact, the SERFF instruction does not appear to even 

constitute an interpretation of sections 10113.71 or 10113.72. 

The document simply instructs that policies issued on or after 

January 1, 2013 must contain the 60-day grace period. That 

instruction enables new, yet-to-be issued policy forms to align 

with current law, in line with the electronic system’s function. 

Contrary to the Court of Appeal’s view, the instruction provides 

no view on whether the grace period or the other requirements 

in sections 10113.71 and 10113.72 apply to existing policies. As 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

42

the Insurance Commissioner helpfully explains, SERFF is 

simply a voluntary system for form and rate submissions, and 

SERFF instructions like the one here “may include a brief 

description of the relevant statutes,” but are “not intended to 

serve as a formal legal opinion of the [DOI].”

Although agency correspondence may express an 

interpretive view, it does not merit deference here. Although 

courts should certainly consider the interpretations of an agency 

advanced in litigation even if these are not associated with 

formal administrative actions, we agree with the Insurance 

Commissioner that ordinary agency correspondence provides us 

with little assistance in our interpretive inquiry. As we

explained in Heckart v. A-1 Self Storage, Inc. (2018) 4 Cal.5th 

749, 769, footnote 9, these types of private communications offer 

poor guides because (a) they don’t appear to be the product of 

“ ‘ “careful consideration” ’ ” of the legal issue, but instead reflect 

interpretations prepared in ad hoc advice letters by individual

staff members; (b) the views expressed in them do not represent 

“a quasi-legislative rule, promulgated pursuant to delegated 

lawmaking power” (ibid.); and (c) they were “not disseminated 

as an annotation by the [DOI] to be considered by anyone other 

than the recipient, and there is no information regarding how 

carefully the issue was considered” (ibid., applying Yamaha,

supra, 19 Cal.4th at pp. 11–16). For the same reasons, we give 

no weight to the identical, as well as additional, correspondence 

that we judicially notice at Protective Life’s request.

10

10 Plaintiffs argue that applying sections 10113.71 and 

10113.72 to the facts here requires us to conclude they are

entitled to recover the policy benefits from Protective Life. But 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

43

IV.

When the Legislature enacted changes to the Insurance 

Code protecting people who hold life insurance policies from 

inadvertently losing them, it established limited protections 

that kept such policies from being revoked when policy owners 

lapsed in paying premiums. Those provisions clearly establish 

that life insurance policies must have a 60-day grace period 

before they can be terminated for a premium lapse, and that 

insurers cannot terminate policies for a premium lapse until 

they give at least 30-day mailed notice to the policy owners and 

to any additional designated individuals. What they don’t 

explicitly establish is whether these protections apply to people 

holding life insurance policies issued or delivered before these 

amendments went into effect. 

These sections are nonetheless best read to extend 

protections to policies issued before these sections went into 

effect. Key passages in sections 10113.71 and 10113.72 are 

written in universal terms, best understood to modify policies 

whether they come into effect after reforms were enacted or 

were already in effect at the time. Other indicia of purpose 

resolve any ambiguity that remains from the language. The 

grace period and notice protections apply to all policies in effect 

as of the sections’ effective date — and in this case, nothing in 

the presumption against retroactive application of legislation as 

ordinarily applied compels another result. The Legislature 

this argument would require us to address the correctness of the 

jury’s verdict. We decline to do so, as plaintiffs did not petition 

for our review on this issue and it is not squarely before us.

(Nationwide Biweekly Administration, Inc. v. Superior Court.

(2020) 9 Cal.5th 279, 334, fn. 25.)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Opinion of the Court by Cuéllar, J.

44

enacted the sections not only to provide protections to people in 

the future, but also to ensure that existing policy owners don’t 

lose the life insurance coverage that they may have spent years 

paying for and on which their loved ones depend. Accordingly, 

we reverse the judgment of the Court of Appeal and remand for 

proceedings consistent with this opinion.

CUÉLLAR, J.

We Concur:

CANTIL-SAKAUYE, C. J.

LIU, J.

KRUGER, J.

GROBAN, J.
1

MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

S259215

Concurring Opinion by Justice Jenkins

I agree with the majority that sections 10113.71 and 

10113.72 of the Insurance Code1“apply to all life insurance 

policies in force when these two sections went into effect, 

regardless of when the policies were originally issued.” (Maj. 

opn., ante, at p. 2.) I reach this conclusion by a different 

analytical path. Even if, as defendant Protective Life Insurance 

Company (Protective Life) argues, this conclusion constitutes 

retroactive application of the statutes — such that the 

presumption against retroactivity applies — the relevant 

statutory language and legislative history are, in my view, 

“sufficiently clear to compel the inference that the [Legislature] 

did intend the provisions” to apply retroactively. (Californians 

for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 229 

(Mervyn’s).) Indeed, the majority acknowledges that “if the 

presumption applies with its ordinary weight, the indicia of 

legislative purpose here could rebut it.” (Maj. opn., ante, at p. 

26.) 

However, I do not endorse the majority’s conclusion that 

applying the statutes to the policy at issue in this case does not 

trigger the presumption — or, alternatively, that the 

presumption applies but with something less than “its ordinary 

weight” (maj. opn., ante, at p. 26) — because (a) the impact of 

1 All unspecified section references are to the Insurance 

Code.
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

2

doing so on Protective Life’s contractual rights and obligations 

is insufficiently “substantial” to constitute a retroactive legal 

change (maj. opn., ante, at p. 18), and/or (b) “any nominal 

retroactive effect . . . plainly fails to present the type of concern 

underlying the application of the presumption as we have 

ordinarily understood it” (maj. opn., ante, at pp. 24–25). I 

therefore concur only in the judgment.

I.

The insurance policy here at issue includes a 31-day “grace 

period” for payment of the yearly premium, which provides in 

relevant part: “A grace period of 31 days will be allowed for 

payment of each premium after the first. This policy will 

continue in force during the grace period. If the premium 

remains unpaid at the end of the grace period, coverage will 

cease.” 

As the majority notes, the length of this contractual grace 

period complied with applicable administrative regulations, 

which then expressly required at least “a 31-day grace period.” 

(Maj. opn., ante, at p. 9, fn. 3.) William McHugh, who purchased 

the policy, failed to pay the premium that was due on January 

9, 2013, by the end of the grace period. He died in June 2013. 

Protective Life advised his named beneficiaries that the policy 

terminated before his death for nonpayment of the premium. 

The beneficiaries — plaintiffs Blakely McHugh and Trysta 

Henselmeier — sued Protective Life for breach of contract and 

breach of the implied covenant of good faith and fair dealing, 

arguing that Protective Life improperly terminated the policy 

without following the requirements of sections 10113.71 and 

10113.72. Protective Life asserts that sections 10113.71 and 

10113.72 do not apply in this case because they took effect on 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

3

January 1, 2013, long after McHugh’s policy was issued in 2005. 

A contrary conclusion, it argues, would constitute a retroactive 

application of the statutes — by extending the policy’s stated 

grace period and imposing new notice requirements — and there 

is insufficient evidence to “overcome” the “presumption ‘that 

legislation operates prospectively rather than retroactively.’ ” 

II.

Even if Protective Life is correct that applying the statutes 

to the policy at issue here triggers the presumption against 

retroactivity, Protective Life’s argument ultimately fails 

because the presumption has been overcome. As the majority 

notes, “[t]he retroactivity presumption is not a ‘straitjacket.’ ” 

(Maj. opn., ante, at p. 25.) “Even without an express declaration, 

a statute may apply retroactively if there is ‘ “a clear and 

compelling implication” ’ that the Legislature intended such a 

result.” (People v. Alford (2007) 42 Cal.4th 749, 754.) “We may 

infer such an intent from the express provisions of the statute 

as well as from extrinsic sources, including the legislative 

history.” (Preston v. State Bd. Of Equalization (2001) 25 Cal.4th 

197, 222 (Preston); see Alford, at p. 754 [relying on “legislative 

history” in giving statute retroactive effect].)

In my view, the statutory language and relevant 

legislative history are “sufficiently clear to compel the inference 

that the [Legislature] did intend” sections 10113.71 and 

10113.72 to apply retroactively. (Mervyn’s, supra, 39 Cal.4th at 

p. 229.) Section 10113.71, subdivision (a), states that “[e]ach life 

insurance policy issued or delivered in this state shall contain a 

provision for a grace period of not less than 60 days from the 

premium due date.” (Italics added.) As the majority explains, 

this language “reasonably” may be understood as “a mandatory 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

4

directive for all policies (i.e., each policy must be read to contain 

a grace period),” without any “temporal limitation.” (Maj. opn., 

ante, at p. 31.) Next, section 10113.72, subdivision (c), states 

that “no individual life insurance policy shall lapse or be 

terminated for nonpayment of premium unless the insurer, at 

least 30 days prior to the effective date of the lapse or 

termination, gives notice to the policy owner and to the person 

or persons designated pursuant to subdivision (a), at the address 

provided by the policy owner for purposes of receiving notice of 

lapse or termination.” (Italics added.) This language states a 

substantive rule of law — apparently applicable to all policies 

(“No individual policy” (ibid.)) — that precludes lapse or 

termination of any policy absent provision of the required notice. 

The breadth of this language, and the absence of any 

language limiting the statutes’ application to policies issued 

after the statutes’ effective date, are significant given that the 

Legislature, in the same 2012 measure that added sections 

10113.71 and 10113.72, amended section 10173.2. As to life 

insurance policies “assigned in writing as security for an 

indebtedness,” section 10173.2 requires “insurer[s]” to mail 

written notice to the assignees “each time the policy owner has 

failed or refused to transmit a premium payment to the insurer 

before the commencement of the policy’s grace period or before 

the notice is mailed.” As the majority explains, when the 

Legislature amended section 10173.2 in 2012, the statute 

contained — and still contains — language giving it prospectiveonly effect, by providing that the statute’s requirements apply 

only when a life insurance policy is assigned “ ‘after the effective 

date of this section.’ ” (Maj. opn., ante, at p. 37; see Stats. 2012, 

ch. 315, § 3; Stats. 1975, ch. 792, § 1, p. 1816.) Thus, as the 

majority also explains, “when the Legislature added sections 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

5

10113.71 and 10113.72 to the Insurance Code, it knew that 

another statute — indeed, a statute it amended in the very same 

bill — used expressly future-oriented language,” but the 

Legislature “did not add similar [prospective-only] language to 

sections 10113.71 and 10113.72.” (Maj. opn., ante, at p. 37.) 

This circumstance indicates the Legislature’s intent to make the 

grace period and notice provisions applicable to all policies, 

regardless of issue date. (See Calfarm Ins. Co. v. Deukmejian

(1989) 48 Cal.3d 805, 827 (Calfarm) [“necessary inference” from 

“omission” of language giving statute prospective-only effect is 

that statute’s application “was not so limited,” given language 

in simultaneously enacted provision “expressly” giving it 

prospective-only effect].)

The relevant legislative history reinforces this conclusion. 

According to one analysis of the proposed legislation, the 

“[p]urpose of the bill” was “[t]o provide consumer safeguards 

from which people who have purchased life insurance 

coverage . . . would benefit.” (Sen. Com. on Insurance, Analysis 

of Assem. Bill No. 1747 (2011–2012 Reg. Sess.) as amended June 

7, 2012, p. 2, italics added, underscoring omitted.) Several other 

analyses used identical language in describing what, 

“[a]ccording to the author” of the legislation, the proposed 

statutes would “provide[].” (Assem. Com. on Insurance, 

Analysis of Assem. Bill No. 1747 (2011–2012 Reg. Sess.) as 

amended Apr. 26, 2012, p. 1; see Assem. 3d reading analysis of 

Assem. Bill No. 1747 (2011–2012 Reg. Sess.) as amended May 9, 

2012, p. 2 [same].) In explaining the need for these safeguards, 

the same analyses explained that under existing law, 

policyholders — “especially seniors” — could “easily lose” 

coverage after “many years” of “paying premiums” if they 

“accidentally missed” making even “a single premium” payment. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

6

(Assem. Com. on Insurance, Analysis of Assem. Bill No. 1747 

(2011–2012 Reg. Sess.) as amended Apr. 26, 2012, pp. 1–2; 

Assem. 3d reading analysis of Assem. Bill No. 1747 (2011–2012 

Reg. Sess.) as amended May 9, 2012, p. 2; Sen. Com. on 

Insurance, Analysis of Assem. Bill No. 1747 (2011–2012 Reg. 

Sess.) as amended June 7, 2012, p. 2.) The Legislature sought 

to address this problem through the combined effect of the new 

notice and extended grace period provisions. As the majority 

observes, to conclude that the Legislature did not intend to 

extend these new safeguards to existing at-risk policyholders 

who, according to the legislative history, were the motivation for 

the legislation, “would produce results seemingly incongruous 

with” the Legislature’s intent. (Maj. opn., ante, at p. 36.) Given 

“[t]he evident purpose of” the statutes, “the conclusion is 

inescapable that” they were “intended to apply to policies in 

force on the . . . date” they took effect. (Calfarm, supra, 48 

Cal.3d at p. 827.) To decline to give the statutes’ retroactive 

effect would, contrary to our precedent, turn the presumption 

into a “ ‘straitjacket.’ ”

2

 (Maj. opn., ante, at p. 25.) 

III.

In light of my conclusion that the statutory language and 

legislative history are “sufficiently clear to compel the inference 

that the [Legislature] did intend the provisions” to apply 

retroactively (Mervyn’s, supra, 39 Cal.4th at p. 229), it is 

unnecessary for me to decide whether, as Protective Life asserts, 

2 The majority asserts that “our cases do not definitively 

indicate that the presumption has been rebutted” in this case. 

(Maj. opn., ante, at p. 26). But my analysis and conclusion are 

fully in line with, and supported by, our analysis and conclusion 

in Preston, Calfarm, and Alford, and the majority does not 

assert otherwise. 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

7

applying the requirements of sections 10113.71 and 10113.72 in 

this case constitutes a retroactive application of the statutes 

that triggers the presumption. Contrary to what the majority 

might seem to suggest, this approach is fully “consistent with” 

precedent (maj. opn., ante, at p. 26) in which we first 

“assum[ed],” without deciding, that applying a statute would be 

giving it retroactive effect, and then held, based on “the 

pertinent legislative materials,” that the Legislature intended 

the statute to have such effect. (Preston, supra, 25 Cal.4th at 

pp. 221, 222.) I therefore do not join the majority’s conclusion 

that the presumption is inapplicable or applies with less than 

its ordinary force, or with its discussion of those questions.

Although I acknowledge that the majority’s choice to 

address the question of whether the presumption even applies 

is “consistent with previous cases,” it is not evident to me that 

the majority’s approach is “the most thorough” one. (Maj. opn., 

ante, at p. 26.) I say this because the majority leaves more 

questions unanswered than it resolves. It does not definitively 

decide whether applying the statutes here would result in 

“retroactive changes for purposes of the presumption.” (Ibid.) It 

also declines to decide whether the presumption is 

inapplicable — such that it carries no weight — or whether it 

applies but carries less than “its ordinary weight.” (Ibid.; see id. 

at p. 38 [the presumption “carries little if any weight” in this 

case]).3 Nor does the majority explain, with respect to its 

3 Given the majority’s alternative holding that the 

presumption applies and carries some weight, its choice to 

address the question of whether applying the statutes here 

involves retroactivity ultimately does not, as the majority 

asserts, “avoid having to apply” the presumption “in a 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

8

alternative holding that the presumption applies but carries less 

than “its ordinary weight” (maj. opn., ante, at p. 26), what 

weight the presumption does carry or what is required to 

overcome it. Indeed, notwithstanding the majority’s alternative 

holding, its analysis proceeds as if the presumption is 

completely inapplicable. For example, the majority never 

mentions the presumption or appears to give it any weight, as 

evidenced by the majority’s express refusal even “to entertain” 

Protective Life’s argument “that the Legislature’s failure to 

enact the sections as part of urgency legislation cuts against 

rebutting the presumption.” (Id. at p. 38, fn. 9.) In short, by 

declining to offer answers to what it calls the “threshold 

question” (id. at p. 26) of retroactivity, the majority’s “approach” 

ultimately fails to yield an analysis that provides lower courts 

with clear and adequate guidance for applying the presumption, 

as the majority puts it, in a way we have not previously 

“understood it” (id. at p. 25) and with less than “its ordinary 

weight” (id. at p. 26).

Nor is it clear to me that our precedents “support[]” (maj. 

opn., ante, at p. 24), much less “strongly favor[]” (id. at p. 17), 

the majority’s conclusion that the presumption either does not 

apply at all or applies but carries less than “its ordinary weight” 

(id. at p. 26). I have found no case — and the majority cites 

none — in which this court (or a Court of Appeal) has declined

to apply the presumption because the impact on contractual 

rights and obligations of applying a new statute to an existing 

contract was insufficiently “substantial” to trigger the 

presumption. (Maj. opn., ante, at p. 18.) Nor have I found a 

circumstance where it’s not necessary.” (Maj. opn., ante, at p. 

26.) 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

9

case — and again, the majority cites none — in which this court 

(or a Court of Appeal) has applied the presumption with less 

than “its ordinary weight” (id. at p. 26), either for the reason the 

majority offers here — applying the statutes gives them 

retroactive effect, but only in a “technical[],” “nominal,” or 

“trivial” way (id. at p. 24) — or for any other reason. 

In support of its view, the majority states that (1) “we have 

generally explained that a new law operates ‘retroactively’ when 

it changes ‘ “ ‘the legal consequences of past conduct by imposing 

new or different liabilities based upon such conduct,’ ” ’ ” and (2) 

“[w]e have asked whether the new law ‘ “ ‘substantially affect[s] 

existing rights and obligations.’ ” ’ ” (Maj. opn., ante, at p. 16.) 

But our precedents also have long declared that a law is 

“ ‘retroactive’ ” for purposes of the presumption if it “ ‘takes 

away or impairs vested rights acquired under existing laws . . . 

or give[s] a right [that] never before existed.’ ” (Davis & 

McMillan v. Industrial Acc. Com. (1926) 198 Cal. 631, 637–638.) 

Our precedents also indicate that where a law “ ‘destroy[s] or 

impair[s] an existing right, or give[s] a right which never before 

existed,’ ” the law necessarily “ ‘relate[s] to substantial rights’ ” 

and is therefore retroactive for purposes of the presumption. 

(Id. at p. 638 [“ ‘Retrospective statutes are usually considered to 

embrace only those which relate to substantial rights, as those 

which destroy or impair an existing right, or give a right which 

never before existed’ ”].) Consistent with this understanding, 

our modern decisions broadly declare that “ ‘ “ ‘[e]very

statute . . . which takes away or impairs vested rights acquired 

under existing laws . . . , in respect to transactions or 

considerations already past, must be deemed retrospective.’ ” ’ ” 

(Strauss v. Horton (2009) 46 Cal.4th 364, 471–472, italics 

added.) Indeed, the majority acknowledges that at least “some 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

10

of our cases” articulate a “broad[] definition” of retroactivity that 

“seems to embrace any conceivable statutory impact on the 

terms of an existing contract — including an insurance 

contract.” (Maj. opn., ante, at p. 16.) The majority’s analysis 

does not convince me that “[o]ur precedent . . . establishes [the] 

different,” far narrower “proposition” that retroactivity does not 

exist where application of “a new law” would, in fact, “impact” 

vested contractual rights by “chang[ing] . . . the contracting 

parties’ rights or obligations,” but a court decides that the 

“impact” on those contractual rights is not sufficiently 

“substantial.” (Maj. opn., ante, at p. 21.) Thus, contrary to the 

majority’s assertion, my reservations about its analysis and 

conclusion go far beyond its failure to “identify a sufficiently 

analogous case.” (Id. at p. 20.) Having failed to find a decision 

from any court applying our decisions in the way the majority 

does, and having thoroughly “grapple[d] with this established 

body of law” (id. at p. 19), it simply is not evident to me that our 

precedents “support[]” (id. at p. 24) the majority’s novel analysis.

It also is not evident to me that the statutes, as applied to 

existing policies, merely “make relatively cabined, procedural 

changes to how insurers administer policies,” by “requir[ing] 

insurers to provide policy owners with limited but critical 

safeguards to avoid defaulting.” (Maj. opn., ante, at p. 18.) As 

the majority acknowledges, “ ‘promptness of payment is 

essential in the business of life insurance,’ ” and “insurers 

depend on the regular, timely payment of premiums in order to 

pay death benefits and cover the cost of administering policies.” 

(Maj. opn., ante, at p. 9.) As noted above, the policy in this case 

expressly states that “coverage will cease” if the premium is not 

paid at the end of “[a] grace period of 31 days.” Under section 

10113.71, subdivision (a), coverage must remain in force, 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

11

notwithstanding the contractual provision and the nonpayment 

of premium, for at least 60 days. In my view, this mandatory 

coverage extension arguably constitutes more than a mere 

“procedural change[].”4 (Maj. opn., ante, at p. 18.) 

In all events, in terms of the presumption’s applicability 

and operation, our prior decisions eschew reliance on whether a 

change may be characterized as procedural rather than 

substantive. (Aetna Cas. & Sur. Co. v. Industrial Acc. 

Commission (1947) 30 Cal.2d 388, 394.) As we have explained, 

“ ‘In deciding whether the application of a law is prospective or 

retroactive, we look to function, not form. [Citations.] We 

consider the effect of a law on a party’s rights and liabilities, not 

whether a procedural or substantive label best applies.’ ” (In re 

Friend (2021) 11 Cal.5th 720, 743.) “In this area of the law, . . . 

substance and procedure are so interwoven that their attempted 

segregation into clean-cut categories becomes meaningless; 

here, as elsewhere, the hoary dichotomy between the 

substantive and the procedural cannot serve as a talismanic 

solution to the retroactivity problem.” (People v. Charles (1967) 

4 Curiously, despite the majority’s acknowledgement that 

prompt and timely payment “ ‘is essential’ ” to insurers (maj. 

opn., ante, at p. 9), the majority later rests its conclusion in part 

on Protective Life’s failure to “clearly” show how extending the 

grace period “constituted a disruptive contract change” (maj. 

opn., ante, at p. 24), its failure to “specifically identify any way 

in which the bargain memorialized in the insurance contract 

would be substantially upset by applying the [extended] grace 

period” (id. at p. 22), and its reliance instead on a “generalized, 

amorphous allusion to financial impact” (ibid). According to the 

majority, Protective Life can show a sufficient “financial impact” 

only by providing “evidence that [it] or other insurers 

anticipated and accounted for a projected rate of inadvertent 

defaults when setting their premiums.” (Id. at p. 39.)
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

12

66 Cal.2d 330, 336.) The majority fails to even acknowledge, let 

alone “grapple with this established body of law.” (Maj. opn., 

ante, at p. 19.)

I also am not convinced that under our precedents, “the 

‘highly regulated’ nature of the insurance industry” (maj. opn., 

ante, at p. 21) is a factor that weighs against fully applying the 

presumption. Indeed, our decision in Interinsurance Exchange 

of the Auto. Club of Southern Calif. v. Ohio Cas. Ins. Co. (1962) 

58 Cal.2d 142, seems to indicate precisely the contrary. That 

case did not, as the majority indicates, present the question of 

whether to apply a statutory “change [that] would have upended 

the bargain struck” in “previously negotiated contracts.” (Maj. 

opn., ante, at p. 18.) Instead, the issue in the case was whether 

to apply a statutory change that would have negated a 

contractual provision that was not expressly contained in the 

contract — an insurance policy — but that was “written into the 

policy as a matter of law” and “public policy.” (Interinsurance 

Exchange, at p. 146.) In answering this question, after stating 

the “rule” that provisions required by “the statutory and 

decisional law in force at the time the policy is issued . . . ‘are 

read into each policy . . . and become a part of the contract with 

full binding effect upon each party’ ” (id. at p. 148), we explained 

that “[b]ased upon” the presumption against retroactivity, “this 

rule is followed even though there has been a subsequent 

amendment or repeal of the statute incorporated into the policy” 

(id. at p. 149). Applying the presumption, we then declined to 

apply the new statute to existing policies, finding “nothing to 

indicate that the Legislature wished the [statutory] 

amendment . . . to have such a retroactive effect.” (Ibid.) This 

analysis and holding seem inconsistent with the majority’s 

reliance on “the ‘highly regulated’ nature of the insurance 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

13

industry” (maj. opn., ante, at p. 21) as a factor weighing against 

application of the presumption. In my view, the “expectations” 

at issue under the policy here — which arose from an express

contractual provision that was mandated by then-applicable 

administrative regulations and which would be “disrupt[ed]” by 

applying the statutes to the policy — are at least as “settled” 

as — and arguably more settled than — the “expectations” at 

issue in Interinsurance Exchange, which arose from a provision 

read into the policy by law and which we found sufficient to 

trigger application of the presumption. (Maj. opn., ante, p. 19.)

Last, I note that the majority’s analysis of whether and 

how the presumption applies appears to overlap the inquiry that 

governs our analysis of whether a retroactive application of a 

law unconstitutionally impairs contractual rights. As we 

recently explained, the “threshold question” of the constitutional 

inquiry is whether the state law “ ‘ “operate[s] as a substantial 

impairment of a contractual relationship.” ’ ” (Alameda County 

Deputy Sheriff's Assn. v. Alameda County Employees' 

Retirement Assn. (2020) 9 Cal.5th 1032, 1075.) “In making this 

determination, we “ ‘consider[] the extent to which the law 

undermines the contractual bargain, interferes with a party’s 

reasonable expectations, and prevents the party from 

safeguarding or reinstating his rights.’ ” (Ibid.) Under the 

majority’s analysis, whether the presumption against 

retroactivity fully applies likewise turns on whether the impact 

of applying the new law to existing contracts is sufficiently 

“substantial” (maj. opn., ante, at p. 18), and the same factors 

likewise are considered in deciding these questions (id. at p. 17 

[“focus[]” of “ ‘retroactivity’ ” inquiry is “whether the statutory 

change in question significantly alters settled expectations”], 18 

[statutory changes here “do not disrupt clearly settled 
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

14

expectations” in “fashion” that makes application of statutes 

retroactive and applying them would not “impinge on a 

contracting party’s substantial rights or unfairly upset the 

bargain memorialized in the insurance policy”], 22 [Protective 

Life fails to “specifically identify any way in which the bargain 

memorialized in the insurance contract would be substantially 

upset by applying” the new statutory requirements]). Our 

previous decisions state that the question of whether the 

presumption applies is separate and different from the question 

of whether retroactive application of a law unconstitutionally 

impairs contractual rights. (Hogan v. Ingold (1952) 38 Cal.2d 

802, 821 [“the question of the constitutionality of retroactive 

legislation and the question of the applicability of a rule” against 

retroactivity “are distinct”]; People ex rel. Thorne v. Hays (1854) 

4 Cal. 127, 139, 131, 132 [“there is a broad difference” between 

the question of whether a statute “not expressly made 

retrospective in terms, should not be so construed as to affect 

past transactions” and whether retroactive application of the 

law unconstitutionally “divest[s] the rights of individuals vested 

previous to its passage”].) I am not convinced that it is 

appropriate to make the two inquiries similar in this way or that 

doing so will not have unforeseen consequences.
MCHUGH v. PROTECTIVE LIFE INSURANCE COMPANY

Jenkins, J., concurring

15

In summary, because it is not clear to me the majority’s 

analysis squares with our jurisprudence, I do not join its 

conclusion that the presumption against retroactivity is 

inapplicable or applies with less than its ordinary weight. 

However, I concur in the judgment because I conclude that the 

statutory language and relevant legislative history are 

sufficiently clear to overcome the presumption, assuming it 

applies.

JENKINS, J.

I Concur:

CORRIGAN, J.
See next page for addresses and telephone numbers for counsel who 

argued in Supreme Court.

Name of Opinion McHugh v. Protective Life Insurance Co. 

__________________________________________________________ 

Procedural Posture (see XX below)

Original Appeal

Original Proceeding

Review Granted (published) XX 40 Cal.App.5th 1166

Review Granted (unpublished) 

Rehearing Granted

__________________________________________________________ 

Opinion No. S259215

Date Filed: August 30, 2021

__________________________________________________________ 

Court: Superior

County: San Diego

Judge: Judith F. Hayes

__________________________________________________________ 

Counsel:

Winters & Associates, Jack B. Winters, Jr., Georg M. Capielo, Sarah D. 

Ball; Williams Iagmin and Jon R. Williams for Plaintiffs and 

Appellants.

Law Offices of Daniel D. Murphy and Daniel D. Murphy for California 

Advocates for Nursing Home Reform, Inc., as Amicus Curiae on behalf 

of Plaintiffs and Appellants.

Glick Law Group and Noam Glick for California Retired County 

Employees Association as Amicus Curiae on behalf of Plaintiffs and 

Appellants.

Neil Granger, in pro. per., as Amicus Curiae on behalf of Plaintiffs and 

Appellants. 
Grignon Law Firm, Margaret M. Grignon; Maynard Cooper & Gale, C. 

Andrew Kitchen, Alexandra V. Drury, John C. Neiman, Jr.; Noonan 

Lance Boyer & Banach and David J. Noonan for Defendant and 

Respondent.

Alston & Bird and Thomas A. Evans for American Council of Life 

Insurers as Amicus Curiae on behalf of Defendant and Respondent.

Quinn Emanuel Urquhart & Sullivan and Kathleen M. Sullivan for 

Chamber of Commerce of the United States of America as Amicus 

Curiae on behalf of Defendant and Respondent.

Matthew Rodriguez, Acting Attorney General, and Lucy F. Wang, 

Deputy Attorney General, for Ricardo Lara, Insurance Commissioner, 

as Amicus Curiae, upon the request of the Supreme Court.
Counsel who argued in Supreme Court (not intended for 

publication with opinion):

Jon R. Williams

Williams Iagmin LLP

2475 Kettner Boulevard

San Diego, CA 92101

(619) 238-0370

John C. Neiman, Jr.

Maynard Cooper & Gale P.C.

1901 Sixth Avenue North, Suite 1700

Birmingham, AL 35203

(205) 254-1228