Title: McHugh v. Protective Life Insurance Co.
Citation: N/A
Docket Number: S259215
State: California
Issuer: California Supreme Court
Date: August 30, 2021

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, long-
standing, 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 quasi-
legislative 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. 
 
14 
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 unaccounted-
for 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 rate-
setting 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 grace-
period 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, long-
standing, 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 prospective-
only 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